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Missouri LLC
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Should I form a Missouri LLC?
An Missouri LLC satisfies a necessary condition of your business planning developement in that it meets the requirement that you establish a legal form of organization in order to gain the statutory benefits and protection available in Missouri to your LLC. Your Missouri LLC establishes a legal presence within the state, which you can use either as a platform for in-state operations or by registering your Missouri LLC via your agent's physical address in order to meet the purely statutory requirement for tax and filing purposes absent an in state operation.Advantages and Disadvantages Missouri LLC
Advantages of Limited Liability Company
- Limited Liability: Owners of a LLC have the limited liability protection of a corporation.
- Flexible Profit Distribution: Limited liability companies can select varying forms of distribution of profits. Unlike a common partnership where the split is 50-50, LLC have much more flexibility.
- No Minutes: Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate.
- Flow Through Taxation: All your business losses, profits, and expenses flow through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax. Usually, this will be a tax advantage, but circumstances can favor a corporate tax structure.
Disadvantages of Limited Liability Company
- Limited Life: Corporations can live forever, whereas a LLC is dissolved when a member dies or undergoes bankruptcy.
- Going Public: Business owners with plans to take their company public, or issuing employee shares in the future, may be best served by choosing a corporate business structure.
- Added Complexity: Running a sole-proprietorship or partnership will have less paperwork and complexity. A LLC may federally be classified as a sole-proprietorship, partnership, or corporation for tax purposes. Classification can be selected or a default may apply.
By Missouri and other state law in order to proceed with forming a llc, you need to prepare a written abstract detailing your llc purpose, the names of your initial Missouri LLC members, the name and address of your Missouri registered agent, the details of which will be introduced into the body of your LLC operating agreement and related Missouri LLC formation documents assembled for application to the state of Missouri.
Missouri’s Business Tax Climate Ranks 15th
Missouri ranks 15th in the State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Iowa (43rd), Nebraska (44th), Kansas (31st), Oklahoma (21st), Arkansas (35th), Tennessee (18th), Kentucky (39th) and Illinois (25th).Missouri’s State/Local Tax Burden among Nation’s Lowest
During the last three decades Missouri's state and local tax burden has consistently been well below the national average. Estimated at 10.1% of income, Missouri's state/local tax burden percentage ranks 34th highest nationally, well below the national average of 11.0%. Taxpayers in Missouri pay $3,678 per capita in state and local taxes, and per capita state income is $36,341.
Missouri’s Individual Income Tax Systems
Missouri’s personal income tax system features ten separate income brackets (no other state has more) with a top rate of 6% kicking in at a relatively low income level of $9,000. Missouri’s top rate of 6.0% is 23rd highest among states levying personal income taxes. Missouri's 2002 individual income tax collections were $638 per person (ranked 25th highest nationally).
Missouri’s Corporate Income Tax Rate Among Lowest Nationally
Missouri’s corporate tax structure consists of a flat tax of 6.25% on all corporate income. This tax rate ranks the state 31st highest among states levying corporate income taxes. In 2000, state and local corporate tax collections reached $93 per capita, ranking the state 24th nationally.
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