How to Start a Business in Missouri
How do you start a business in Missouri? The short answer: sell something. Do that and you're automatically a sole proprietor. But to make money, limit your personal risk, and stay aboveboard legally, you'll need to do much more. Missouri has no annual filing requirement for LLCs and a low corporate tax rate (4%!), making it an excellent place to start a business. Ready to go? Read on and we'll take you through the steps needed to launch your Missouri business.
Ready to Start a Business in Missouri?Let's Get You Started
Pick a Business Type
Name Your Business
File Formation Paperwork
Draft Internal Records
Get Missouri Business Licenses
Organize Your Money
Get Business Insurance
Understand Your Tax Burden
Build Your Business Website
File Missouri Annual Report
Apply for Trademarks
1. Pick a Business Type
While sole proprietorships and general partnerships are simple business types, they aren’t the only ones available to you. Neither gives you a distinction between your personal life and your business, leaving you open to taking on your business’s debts. Limited liability companies and corporations provide liability protection, flexible tax options, and more.
Missouri Limited Liability Company (LLC)
A limited liability company or LLC is great for people who want the simplicity of a sole proprietorship but want more tax filing options and protection. Your LLC can have one or more managers or choose to be member-managed, which simply means the members manage the LLC. To start a Missouri LLC, you’ll need to file paperwork with the Secretary of State.
Corporations are owned by shareholders and managed by a board of directors—though close corporations can choose to operate without directors. The board of directors hires officers to manage the corporation in the interest of the shareholders. To form a Missouri corporation, you’ll need to file paperwork with the Missouri Secretary of State.
Can an LLC be just one person?
Yes! A one-person LLC is called a single-member LLC. Single-member LLCs are one of the most common kinds of businesses in the country. For the most part, single-member LLCs are just like multi-member LLCs, but there are some slight differences in how they file taxes and protect personal assets.
Read all about Single-Member LLCs.
What about a Missouri nonprofit?
You can start a Missouri nonprofit as either a mutual benefit or public benefit nonprofit. Generally, a mutual benefit nonprofit is aimed at helping its members like homeowners associations and religious businesses. And public benefit nonprofits serve the greater public, like food banks. Nonprofits in Missouri are formed by filing Articles of Incorporation of a Nonprofit Corporation ($25) with the Missouri Secretary of State.
Want to learn more? Check out our Nonprofit Guide.
What is a Missouri close corporation?
Missouri recognizes small corporations with few shareholders as close corporations. As a close corporation, you do not need to have a board of directors or hold annual meetings.
2. Name Your Business
Your business name needs to follow certain requirements. Naming a business in Missouri isn’t totally straightforward, at least not for corporations and LLCs. Sole proprietors and general partnerships, however, simply use their owners’ legal names as their business name.
But for LLCs and corporations, you’ll need a business name that meets Missouri’s requirements. Your business name must:
- Use an appropriate identifier, like “LLC,” or “L.L.C” for a limited liability company or “Inc.,” “Corporation,” or “Incorporated” for a corporation.
- Not use words that describe government agencies, like “police” or “department of state.”
- Not use words that suggest a false business purpose, like “charity” or “nonprofit” (unless your business is a nonprofit).
- Not use words that describe a service that requires a professional license, like “architect” or “doctor.”
- Be unique in the state of Missouri.
Find out if your desired name is available in Missouri by searching the Missouri Business Entity database.
Can I reserve a business name in Missouri?
Absolutely! In Missouri, you can reserve a business name for 60 days by filing an Application for Reservation of Name. The filing fee is $25 except for limited liability partnerships (LLPs). LLPs pay $30. You may file an additional name reservation application if you need more time forming your business, but you can only reserve your name for up to 180 days.
What is a DBA?
A DBA (doing business as) is a name your business uses other than its legal name. If you’re a sole proprietor or general partner, your company’s legal name will be your legal name. Filing a DBA gives you the right to use another business name to do business under. In Missouri, DBAs are called fictitious names, so you’ll need to file a Registration of Fictitious Name ($7) to register a DBA for your business. Your DBA registration is good for five years from the filing date.
What about trademarked names?
It’s a good idea to check with the US Patent and Trademark Office (USPTO) to make sure your business name hasn’t been trademarked by someone else. If it has, and you use it anyway, there’s a chance that the business could come after you for infringement.
3. File Formation Paperwork
To form a Missouri LLC or corporation, you’ll need to file the correct paperwork with the Missouri Secretary of State Corporations Division and pay the applicable fees.
- To form a Missouri LLC, file Missouri Articles of Organization ($105)
- To start a Missouri corporation, file Missouri Articles of Incorporation ($50 for the first $30,000 authorized shares)
Shares represent ownership in a corporation. It’s good to remember you’ll need to list a Missouri registered agent on these forms who will handle your legal mail.
Note: Some of the personal information you list on these forms is available on the Missouri Business Entity database. So, anyone who knows your business’s name can look up your home address.
How can I keep my information off the public record?
To keep your personal information off the public record in Missouri, hire a registered agent. Your registered agent will list their name and address instead of yours (We do that!). However, if your business’s principal location is your home address, you’ll need to list that.
What is a registered agent?
A registered agent is a person or entity responsible for accepting legal mail for your business. Your Missouri registered agent is required to have a physical address in the state, where they are available during regular business hours to accept your legal mail. Without a registered agent in Missouri, your business formation paperwork will be rejected or your business will be administratively dissolved by the state. Your Missouri registered agent is required to have a physical address in the state, where they are available during regular business hours to accept your legal mail.
4. Draft Internal Records
So far in this guide, we’ve dealt with public forms that you’ve had to file with the Missouri Division of Corporations. Now, it’s time to organize your internal records. These are the documents your business will keep on record within your company.
Though these documents are internal, you’ll likely need to show them to third parties like the bank or—if you start a nonprofit—the IRS.
Here are the major internal documents you need to organize for LLCs and corporations:
Missouri LLC Operating Agreement
This is your LLC’s rule book. It defines how your LLC will do things like make decisions, distribute money, manage operations, and appoint officers. Your operating agreement plans for every big picture scenario your LLC is likely (or unlikely) to face, including dissolution.
Drafting an operating agreement is hard, and the internet is full of shabby templates that have been copy and pasted from who knows where. So we had our attorneys draft a Missouri LLC Operating Agreement template that you can use as a solid foundation.
Missouri Corporate Bylaws
Bylaws are the rules your corporation will adopt and follow internally. Bylaws detail how your corporation will appoint directors and officers, hold shareholder and board meetings, and handle emergencies, among other things. Like operating agreements, corporate bylaws are not required by law in Missouri (see Missouri Revised Statute § 351.290).
As with operating agreements, you can find plenty of bylaw templates online. But bylaws are pretty serious, so you don’t want to just use the first template you come across. Our attorneys drafted a Missouri Corporate Bylaws template you can use to get started.
Starting a nonprofit? We also have Missouri nonprofit bylaws.
5. Get Missouri Business Licenses
After you draft your internal records and before you start offering services, you’ll need to get a license, maybe even more than one. In Missouri, the Department of Revenue requires any business that sells tangible personal property or taxable services to obtain a sales tax license. On top of your state-mandated license, you may also need a professional license, depending on your industry. To help you sort out what you’ll need, we go over a few common licenses required in Missouri below.
Missouri Sales Tax License
The Missouri Department of Revenue requires all businesses making sales of tangible personal property and taxable services to get a sales tax license. Sole proprietors do not need this sales tax license. The sales tax license gives the Missouri Secretary of State the ability to charge appropriate sales taxes on your business.
Professional Business Licenses
Professional services are those provided by doctors, lawyers, therapists, and other types of professions that require specialized schooling and training. Missouri has a Division of Professional Registration that regulates all professional licenses within the state. Through the Missouri Division of Professional Registration website, you can find a list of all the professions they regulate, like martial arts professionals, private investigators, architects, and more.
Local Business Licenses
Many cities and local counties in Missouri require businesses to file for a general business license. In St. Louis, all businesses require a Graduated Business License, which is the city’s version of a general license. You’ll want to contact your local city or county’s licensing agency to see what licenses are required at the local level.
Learn more about How to Get a Business License.
How do I get a Missouri sales tax license?
To get a Missouri sales tax license, you’ll fill out and submit the Missouri Tax Registration Application. You can submit this form online or in person.
How much does it cost to get a Missouri state tax license?
There is currently no filing fee associated with the Missouri sales tax license.
How do I get a professional license in Missouri?
To get a professional license in Missouri, head over to the Missouri Division of Professional Registration. There is a listing of qualified professions the division regulates, and each profession has different licenses, fees, and applications. For example, martial arts professionals are supposed to file an Application for Professional Licensing. Depending on their sport and needs, the fees vary from $200 for matchmakers and $50 for judges.
How do I get a local business license?
Missouri’s local business licensing procedures are governed by the local jurisdiction where your business is located. For example, in St. Louis, you’ll need to contact the local government office and file your application online or in person.
6. Organize Your Money
The liability protection you get from forming an LLC or corporation is only as strong as the separation between you and your business. At a minimum, you’ll need to open a bank account for your business. And if you’re going to hire employees, you’ll need to tackle payroll, too.
Open a Business Bank Account
To keep your business spending separate from your personal spending, you’ll need to open a business bank account. If you don’t, a court could find that your business is not actually separate from you, the owner, under the Alter Ego Doctrine. Also known as piercing the corporate veil, this is the outcome when a judge finds that a company is not a separate entity but rather an alter ego of the owner. If this ever happens, you could lose your limited liability status.
Opening a business bank account as a sole proprietor is important, too. Though sole proprietors and general partnerships have no limited liability status to protect, both will benefit from organizing their business finances come tax season.
How do I set up a business bank account?
Do I need a business bank account to accept credit card payments?
Probably. Payment processors require you to provide them with a bank account. This is where they’ll deposit funds from transactions. Most of the time, this needs to be a business bank account.
Some payment processors may let you get away with listing a personal bank account, but it’s not a great idea. Mixing your business finances with your personal finances erodes the separation between you and your business, weakening your liability protection. It also turns tax season into a nightmare.
Learn more about Payment Processing.
Set up Payroll
In the life of a business, you might consider hiring employees, bringing independent contractors on, and having to come up with a payroll system. It can all make your head spin if you’re not careful. We don’t want that. So, simply put, to set up payroll in Missouri, you’ll need to:
- get an EIN
- register your business with the Missouri Secretary of State
- register with the Department of Revenue for a Withholding Account Number
- register with the Department of Labor and Industrial Relations for an Employer Account Number
- determine whether you’re hiring employees or independent contractors
- prepare the forms your employees will fill out
- choose a payroll service or software
- decide on a payroll schedule
To help you pay your employees on time, you’ll also need to select a reliable and secure payroll service or software that will automatically withhold payroll taxes, file state and federal returns, and pay your employees either by check or direct deposit.
What forms do my employees need to fill out?
Your new employees will need to fill out a W-4 to determine how much you’ll withhold and an I-9 to verify that the employee is eligible to work in the US.
What’s the difference between an independent contractor and an employee?
An independent contractor is self-employed—how they complete their work is not directly controlled by an employer. An independent contractor may perform the same kind of work for other businesses, and can do the work when and how they choose.
It’s important to understand the difference between an independent contractor and an employee. That’s because for employees, you’ll need to withhold and pay income, social security, and Medicare taxes. Independent contractors pay these taxes on their own.
An employee, on the other hand, performs their work how and when their employer chooses.
If you’re unsure, you can file Form SS-8 with the IRS and let them decide.
Learn everything you need to know about hiring independent contractors.
How do I get a Missouri Withholding Account and Employer Account Number?
To get a Missouri Withholding Account Number and your Missouri Employer Account Number, you’ll register online through the Missouri Department of Revenue Business Registration Portal.
7. Get Business Insurance
Forming an LLC or corporation protects your personal assets. But if anything disastrous befalls your business—like a lawsuit, burglary, flood, or fire—your business is on the hook to pay. Business insurance can help cover the costs.
While business insurance is not required in Missouri, workers’ compensation insurance is required for all businesses. Here’s what you need to know:
Workers’ Compensation Insurance
Workers’ compensation insurance is meant to offer medical and wage benefits to employees who get injured or sick on the job. Missouri’s workers’ compensation insurance laws require all employers with five or more employees to have insurance to cover workers. Construction employers with just one employee are required to have workers’ compensation insurance. In Missouri, members of an LLC and officers of a corporation count as employees and must be covered.
This covers the costs of claims against your business for injuries or damages to the property of others, like clients or customers. This includes medical expenses, legal fees, settlements, and judgments. Whether or not you need it depends on whether your business is likely to be sued and how many assets your business needs to protect. If it’s just you and your computer in your basement, you might feel comfortable skipping liability insurance. Or maybe you won’t. Beyond general liability insurance, you can purchase or add on more specific types, like professional, cyber, commercial, home-based business, or product liability insurance.
Do business owners need workers’ compensation insurance in Missouri?
In some cases, yes. Owners of LLCs must be covered by workers’ compensation insurance, but owners of corporations do not.
Do I need business insurance for my home-based business?
Probably. That’s because you can’t count on your homeowners’ or renters’ insurance policy to cover damages related to your business. Most insurance companies offer a home-based business insurance plan.
8. Understand Your Tax Burden
Missouri has a 4% corporate income tax rate and a 4.225% state sales tax rate, but your business taxes don’t stop there. You’ll also have federal and local taxes to consider. And in Missouri, there is a pretty complex break down of how the state does individual income taxes.
Here’s what you need to know:
- LLCs. Single-member LLC? By default, you’re taxed similar to a sole proprietor. More than one LLC owner? You’re taxed as a general partnership. Either way, your default tax status is “pass-through,” which means you don’t pay corporate taxes. Instead, your LLC’s owners report profits and losses on their personal tax returns. Missouri has a graduated individual income tax rate you’ll have to pay along with the 15.3% federal self-employment tax rate. An LLC can file paperwork with the IRS to be taxed as an S-Corp or C-corp instead.
- Corporations. Corporations are taxed as C-corps by default. This means that corporations pay the 21% federal corporate tax rate and 4% corporate tax in Missouri.
To pay your federal taxes (and take a good deal of other steps required to start a business), you’ll need to get an Employer Identification Number (EIN). You can apply for one with the IRS or hire us to get one for you.
Do I need an EIN if I’m self-employed?
If you’re operating a sole proprietorship or single-member LLC that doesn’t employ anyone else and you don’t need to file excise or pension plan returns, you don’t legally need an EIN.
However, you can still get one—and you probably should. Otherwise, you’ll have to use your own social security number to do business. Plus, you’ll likely need an EIN to open a business bank account.
How do I get an EIN?
To get an EIN, you can either apply online or file form SS-4 by mail with the IRS. Getting an EIN is free.
Check out our guide to applying for an EIN.
What is an S-Corp?
An S-Corporation is a federal tax election. Registered business entities like LLCs and corporations start out with a default tax status, but can file paperwork with the IRS to be taxed as an S-Corp. Like LLCs, S-Corps are taxed as pass-through entities. Like corporations, S-Corps can make distributions that aren’t subject to the 15.3% self-employment tax.
Learn more about the S-Corp tax election.
What is a C-corp?
A C-corporation is the default federal tax election assigned to corporations. Most corporations are taxed as C-corps, but LLCs can also apply for C-corp tax designation by filing paperwork with the IRS. C-corps file federal corporate income taxes and state corporate income taxes (in Missouri, the corporate tax rate is 4%). C-corps can pay their shareholders in distributions, and the shareholders report those profits on their personal tax returns.
Learn more about the C-corp tax election.
Local Missouri Business Taxes
On top of state and federal taxes in Missouri, you’ll also have to wrestle with local taxes. You’ll need to check your local county or city’s tax rate to be sure. For example, in St. Louis, the local sales tax rate is 5.45%, but in Hermann, you’ll be paying 2.87% along with a 0.5% special tax the city charges.
9. Build Your Business Website
If you want Missourian to find your business, they have to be able to find you online. This means you’ll need a website, a business email account, and social media accounts. Don’t worry if you’re not especially tech-savvy—you don’t have to be a web developer or an influencer to establish a robust online presence. You’ll just need the following:
- Domain name. Your domain is the address where your website will live. You’ll want a domain name that is short, unique, local, and—most importantly—available. If your domain is trademarked, you could face legal trouble.
- Domain registrar. Once you’ve decided on a domain name, you’ll want to register it with a domain registrar. Some domains are more expensive than others. Some domain registrars also offer hosting and most will provide you with a business email that includes your domain name (“[email protected]”).
- SSL certificate. An SSL certificate signals to your users that your website is secure. If your website will use forms—like a sign-up form or a “contact us” form—an SSL certificate is critical. But even if you don’t you use forms, you’ll still probably want one—it allows an encrypted connection, which means your users’ data is transported securely. There are several types of SSL certificates, and you can often get one through your domain registrar.
- Site design. The easiest option is to use a free website creation tool—there are a number of free options available. Most are easy even for a newcomer to use, with styles and built-in templates. For a more custom design, you can hire a web designer to work on your website, but this will be much more expensive.
10. File a Missouri Annual Report
In Missouri, corporations file annual reports at the end of their incorporation anniversary month. Corporations pay a filing fee of $45 for paper filing or $21.25 for online filing. You may elect for biennial filing with the Secretary of State to allow you the option of filing every other year. Missouri does not have a requirement for LLCs to file annual reports.
Read more about How to File a Missouri Annual Report.
What if I don’t file an annual report in Missouri?
If you don’t file your annual report in Missouri, the state charges you $15 for every 30 days you are late. After 90 days, your business may be revoked or administratively dissolve.
11. Apply for Trademarks
A trademark is a design, symbol, word, phrase—or any combination thereof—that represents a brand’s goods or services exclusively. Only some businesses register trademarks.
You can apply to register your trademark with the State of Missouri or federally with the U.S. Patent and Trademark Office (USPTO). Registering your trademark in Missouri is cheaper and easier than registering with the USPTO, but doing so only protects your trademark in Missouri.
You can only register a trademark once you’ve started using it (so slap it on that website you just made), and not all applications are approved. Trademark law is complex, and the strength of a trademark application (and the trademark itself) depends on many factors.
Our attorneys can review your application, offer advice, and prepare and submit the application for you—Check out our Trademark Service.
How do I register for a trademark in Missouri?
To register a trademark in Missouri, you’ll need to file a Trademark and Service Mark Application ($55). You’ll need to describe how your mark is being used in your business along with dates of when the trademark was used in Missouri. You can’t register a trademark before you use it. Registering your trademark with the Missouri Corporations Section only protects your trademark in Missouri.
Can I register a trademark before I use it?
No. But you can file an application with the USPTO under Intent-to-Use status. This gets your application in line before you’ve actually used the mark, which could be helpful if you’re worried someone else might register your mark before you’ve had a chance to use it.
For your trademark to become official, you’ll eventually need to show proof that you’re using it. An Intent-to-Use application buys you some time to do that.
Learn more about filing an Intent-to-Use Trademark.