Limited Liability Companies in Mississippi

Limited liability companies (“LLCs”) are governed by the Mississippi Limited Liability Company Act, codified at Miss. Code Ann. §§ 79-29-101 et seq.  LLCs have the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, including the power to sue and be sued, own property, and do business, all in its own name. An LLC provides the beneficial combination of the corporate form which allows limited liability and the partnership form which allows a single-level of taxation.  An LLC interest is personal property. A member has no interest in specific LLC property.

To form an LLC, a certificate of formation must be signed and delivered to the office of the Secretary of State. An LLC is formed when the certificate is filed. The certificate must set forth the name of the LLC which includes the words “limited liability company” or the appropriate abbreviation, contact information for the registered office and agent, latest date of dissolution if one is specified, and a statement to the effect of whether full or partial management of the LLC is vested in a manager or managers.

The members of an LLC may enter into a limited liability company agreement to regulate or establish the affairs of the LLC, the conduct of its business, and the relations of its members, allowing the avoidance of statutory default rules.

An LLC may be managed by either members or managers. If management is vested in a manager or managers, those individuals have a duty to act in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner he reasonably believes to be in the best interests of the LLC. Unless the certificate of formation provides for management of the LLC by a manager or managers, however, management will be vested in its members.  Only the persons acting in the management capacity are agents of the LLC whose acts will bind it.

A member of an LLC is not liable solely by reason of being a member for a debt, obligation, or liability of the LLC whether arising in contract, tort or otherwise or for the acts or omissions of any other member, manager, agent or employee of the LLC.  The certificate of formation or limited liability company agreement may contain a provision eliminating or limiting the liability of a manager or a member to the LLC or its members for money damages for any action taken, or any failure to take any action, as a manager or member, except liability for the amount of a financial benefit received by a member or manager to which he is not entitled, an intentional infliction of harm on the LLC or the members, an intentional violation of criminal law, or a wrongful distribution of LLC funds.

Professional Limited Liability Companies

One or more persons may form a professional limited liability company (“PLLC”) by delivering to the Secretary of State for filing a certificate of formation which includes a statement that it is a PLLC and its purpose is to render the specified professional services.

PLLC status may be elected solely for the purpose of rendering professional services and solely within a single profession.  A PLLC may also elect this status for the purpose of rendering professional services within 2 or more professions so long as the combination is lawful in Mississippi.  Professional service means a service that may be lawfully rendered only by a person licensed or otherwise authorized by a licensing authority in Mississippi to render the service.

Each individual who renders professional services as an employee of a PLLC is liable for a personal negligent or wrongful act or omission to the same extent as if he rendered the services as a sole practitioner. A member or employee is not liable, however, for the conduct of other members or employees except a person under his direct supervision and control while rendering professional services on behalf of the PLLC.