Mississippi LLC Operating Agreement: Complete 2026 Guide + Requirements

Mississippi Recognises an Oral Agreement and Then Refuses to Act on One

Mississippi replaced its old limited liability company statute in 2010 with the Revised Mississippi Limited Liability Company Act, codified at §§ 79-29-101 to 79-29-1317 of the Mississippi Code. The Act is generous about form. Section 79-29-105 defines an operating agreement as any agreement, "written, oral or implied", of the member or members as to the affairs of the company and the conduct of its business, and it makes members, managers and assignees bound by that agreement whether or not they executed it.

Then the Act turns around and conditions the most important rights on writing. Section 79-29-303 provides that a member may withdraw from a limited liability company only at the time or on the events specified in a written operating agreement and in accordance with that written agreement, or on the written consent of all the members. A Mississippi member with an oral understanding is locked in until every other member agrees to let them out. That single sentence is the strongest practical argument for a signed document in this state.

What the Act supplies when nothing is written

Management follows money. Section 79-29-305 vests the management of the company in its members in proportion to the then current percentage or other interest of members in the profits, so a member holding 15 per cent of the profit interest holds 15 per cent of the say. Withdrawal is effectively barred by § 79-29-303. And several rules the members might want to change are not changeable at all: § 79-29-123 prevents an agreement from varying the company's capacity to sue and be sued in its own name, eliminating the implied contractual covenant of good faith and fair dealing, waiving the requirement that contribution obligations be in writing, or varying the winding up procedure and the way assets are distributed in it.

The single owner position in Mississippi

Mississippi closed the obvious argument. Section 79-29-105 states that the operating agreement of a limited liability company with a single member remains enforceable, so a sole owner cannot be told there was nobody to contract with. What the document does for that owner is evidentiary: it records the capital account, names the authorised signer, states that company money is not owner money and sets the compensation arrangement. Section 79-29-311 keeps company liabilities off the members, and the paper record is what keeps that section working. Our single-member LLC guide covers the rest of the file.

Does Mississippi Require One, and What Can It Not Change

No requirement. Nothing in the Revised Act tells members they must adopt an agreement, and Mississippi is not among the states, headed by California, Delaware, Missouri, Maine and New York, whose statutes do. What the Act does is set out, in § 79-29-123, both the scope of the agreement and the boundaries around it.

Three of those boundaries matter to ordinary companies. The agreement must initially be agreed to by all of the members. It cannot eliminate the implied contractual covenant of good faith and fair dealing. And it cannot waive the Act's requirement that an obligation to contribute be in writing, which means an oral promise to fund the next expansion is not something the agreement can rescue.

Section 79-29-123 also opens a door. Subsection (4) permits the agreement to limit the liability of managers, members and officers, but not for an unauthorised financial benefit, intentional harm to the company or its members, a criminal violation, a wrongful distribution, or a bad faith breach of the implied covenant. Subsection (6) sets a conduct standard of good faith, fair dealing and ordinary prudence. Mississippi therefore sits between Nevada, which allows duties to be eliminated outright, and the uniform act states, which forbid it.

Nothing is filed. The Secretary of State records the certificate of formation, the annual report and later charter documents. There is no operating agreement form, no submission channel and no fee, because there is no filing. The Mississippi filings that do carry a fee are formation, articles of amendment, the annual report, dissolution and reinstatement.

What Belongs in a Mississippi Operating Agreement

Mississippi operating agreement at a glance

Ten clauses do the work. In Mississippi the ones that have to be in writing are the ones that decide whether anybody can get out.

1. Members and the percentage interest in profits

Name each member and state the percentage interest in profits, because § 79-29-305 converts that figure directly into management power. If a member should have more or less say than their profit share, write it in and say so plainly.

2. Contributions, and the writing the Act insists on

Record cash, property and services with agreed values. Then treat every future funding obligation as a written commitment, because § 79-29-123 says the agreement cannot waive the requirement that contribution obligations be in writing. Section 79-29-503 governs liability for contributions and § 79-29-501 the form they may take.

3. Member managed or a manager, and who has agency power

Section 79-29-401 provides for management by a manager or managers where the members choose it, and § 79-29-307 deals with the agency power of members, managers and officers. Say which structure applies, what the manager may decide alone, how the manager is removed and how a successor is appointed.

4. Voting, classes and the decisions that need more

Section 79-29-309 covers voting, classes and meetings, and the agreement is where the thresholds are set. Name the decisions that require a supermajority or unanimity: admitting a member, borrowing, encumbering property, related party contracts, changing the tax election, selling the business.

5. Profits, losses and when cash actually moves

Section 79-29-505 addresses the sharing of profits and losses and § 79-29-507 the sharing of distributions, both of which the agreement should set expressly rather than leave to the fallback. Add a tax distribution, a reserve that must be funded first, and note that § 79-29-609 limits distributions and § 79-29-611 imposes liability for a wrongful one.

6. Financial interests, assignment and who may join

Article 7 of the Act separates the financial interest from membership. Section 79-29-701 allows a financial interest to be owned by someone who is not a member, § 79-29-703 governs assignment, § 79-29-707 governs when an assignee may become a member, and § 79-29-711 confirms that limitations on assignment written into the agreement are enforceable. Use all four: consent, a right of first refusal and a mandatory offer on death, divorce or bankruptcy.

7. Withdrawal, which only a written agreement can permit

This is the clause Mississippi companies most often lack. Section 79-29-303 allows withdrawal only at the time or on the events specified in a written operating agreement and in accordance with it, or on the written consent of all members. Decide whether members may leave, on what notice, at what price, and pair it with § 79-29-603, which deals with the distribution due on withdrawal.

8. Dissolution, and the parts you cannot rewrite

Set the events that dissolve the company under § 79-29-801 and how winding up proceeds. Remember that § 79-29-123 stops the agreement from varying the winding up procedure or the way assets are distributed in it, and from varying the court's power to decree dissolution under § 79-29-803. Draft inside those limits.

9. Federal tax election and the person who signs it

Record whether the company is taxed as a partnership, an S corporation on Form 2553 or a corporation on Form 8832, name the signer and appoint the partnership representative. Section 79-29-127 addresses the state's treatment. The federal classification rules are in the IRS guidance for limited liability companies.

10. Forum, arbitration and amendment

Mississippi gives this clause statutory backing that most states do not. Section 79-29-1211 makes written agreements to choose a forum, to authorise arbitration and to choose a prescribed manner of service of process enforceable. Use it: name the county, name the arbitration rules, and set an amendment threshold you can reach.

Creditors, Financial Interests and Article 7

Mississippi puts creditor rights in Article 7 of the Act, titled Assignment of Financial Interests. The sections are § 79-29-701 on the nature of a financial interest, § 79-29-703 on assignment, § 79-29-705 titled Rights of creditor, § 79-29-707 on an assignee becoming a member, § 79-29-709 on the powers of a personal representative of a deceased, incompetent or dissolved member, and § 79-29-711 on the enforceability of limitations on assignments.

The structural point is the split the Act makes between the financial interest and membership itself. Section 79-29-701 recognises that a financial interest may be owned by a person who is not a member, and § 79-29-707 makes becoming a member depend on compliance with the certificate of formation or the operating agreement. A creditor or an assignee therefore ends up on the economic side of the line unless the agreement lets them cross it, which is why § 79-29-711 matters: limitations on assignment that the agreement contains are enforceable.

Three drafting moves follow. Close the § 79-29-707 route so admission needs member consent. Restrict assignment expressly under § 79-29-711 rather than relying on silence. And write a distribution policy that funds a reserve first and pays on a determination rather than a calendar, because whatever a Mississippi court charges, it can only reach what would otherwise have been paid out. Note as well that § 79-29-709 gives a personal representative powers over a deceased member's interest, so death planning belongs in the same clause set.

Duties, Liability Limits and Section 79-29-123

Mississippi handles conduct standards and duty modification in a single section, which makes it easier to read than most. Section 79-29-123(6) sets the standard: managers, officers and members are to act in good faith, with fair dealing and with ordinary prudence. Section 79-29-123(3) then lists what the agreement cannot do, and the entry that catches drafters is the ban on eliminating the implied contractual covenant of good faith and fair dealing.

Section 79-29-123(4) is the permission. An operating agreement may limit or eliminate the liability of a manager, member or officer, except for a financial benefit received to which the person is not entitled, an intentional infliction of harm on the company or its members, a criminal violation, a wrongful distribution, or a bad faith violation of the implied covenant. Those five exceptions are the outer wall.

Two other sections belong in the same conversation. Section 79-29-121 deals with business transactions between a member or manager and the company, which is the provision to build a disclosure and approval procedure around. Section 79-29-315 covers access to and confidentiality of information and records, and it is worth setting the inspection procedure in the agreement so a demand for the books arrives as a process rather than a dispute.

Authority, the Registered Agent and What Banks Ask For

Mississippi does not offer a public statement of authority filing of the kind Minnesota and Nebraska maintain. Agency power sits in § 79-29-307, which addresses the authority of members, managers and officers, and the operating agreement is where the detail lives. Separately, § 79-29-113 requires a registered office and registered agent, and the mechanics of agent appointment and change are handled by the state's registered agents chapter at Miss. Code chapter 79-35, which runs from § 79-35-1 through § 79-35-19. If a source cites you a section number outside that range for a Mississippi registered agent rule, it does not exist.

A Mississippi bank opening a business account will ask for the filed certificate of formation, the EIN letter, identification for each beneficial owner and either the operating agreement or a members resolution naming the authorised signers. Federal customer due diligence rules require the bank to identify and certify the beneficial owners of a legal entity customer, and the membership schedule is what makes the percentages checkable. Timber buyers, poultry integrators and Gulf Coast contractors ask for the same package before they sign, as do the states where the company later registers as a foreign entity.

Keep the signed agreement with the file a lender or a buyer will ask for: the certificate of formation, the current registered agent designation, a recent certificate of existence and any fictitious business name registration.

Mississippi Has No Series Statute, and What to Do Instead

Several neighbouring and competing states let one company hold segregated pools of assets. Nevada does it under NRS 86.296, Missouri under RSMo § 347.186, Montana under Mont. Code § 35-8-304. The Revised Mississippi Limited Liability Company Act contains no equivalent. Read the Act's own table of contents, from Article 1 at § 79-29-101 through Article 13 at § 79-29-1317, and there is no section authorising a series of members, managers or interests.

That has a practical consequence for anyone holding several properties or fleets. In Mississippi the separation has to come from separate entities, each with its own certificate of formation, its own registered agent, its own bank account and its own operating agreement. It costs more in annual filings, and it is the only structure the statute supports. An agreement that recites series language in Mississippi is describing something the Act does not recognise.

A holding company arrangement, where one Mississippi company owns the membership interests of several subsidiaries, is the usual answer. That structure lives or dies on the agreements: the parent agreement has to say who may sign for the subsidiaries, and each subsidiary agreement has to keep its own capital account and its own distribution policy.

The Consequences of Going Without One in Mississippi

There is no penalty from the State. The exposure comes from the sections that only work in writing.

Start with the exit. Section 79-29-303 permits withdrawal only under a written operating agreement or with the written consent of all members. A member of a Jackson services company worth $1.5 million who wants out, and who holds 30 per cent, has no statutory route. If the other members refuse consent, the only path is a judicial dissolution petition under § 79-29-803 aimed at the whole company. A negotiated buyout of that interest would have been about $450,000; a court supervised wind up of a going concern typically realises 30 to 50 per cent less than the business is worth to a buyer, so the difference is in the region of $450,000 to $750,000 of enterprise value destroyed for want of an exit clause.

Then the funding gap. Section 79-29-123 will not let the agreement waive the requirement that contribution obligations be in writing. Four members who verbally agreed to put in $80,000 each toward a $320,000 expansion, of which two paid, leave the company $160,000 short with no enforceable claim against the other two. The build out is already under contract.

Finally the dispute itself. A contested Mississippi business divorce with competing valuations, a claim for breach of the implied covenant and a § 79-29-803 dissolution petition runs each side $60,000 to $200,000 through discovery and trial. Section 79-29-1211 would have let the members choose arbitration and a forum in advance, which is a cheaper and faster forum by a wide margin. That clause is one paragraph long.

Five Mistakes Mississippi Filers Keep Making

Mistake 1: Relying on the oral agreement the Act appears to bless

Section 79-29-105 does recognise an oral or implied agreement, which reads like permission. Section 79-29-303 then denies withdrawal rights to anyone without a written one. Reading the definition without the operative sections is how Mississippi members end up trapped in companies they wanted to leave.

Mistake 2: The sole owner with nothing signed

Section 79-29-105 makes a single-member agreement enforceable, so the usual excuse does not work. The document is the record a bank, a lender and eventually a court reads to see that the company was kept separate from its owner under § 79-29-311.

Mistake 3: Adding a member without amending anything

Section 79-29-301 governs admission and § 79-29-707 controls when an assignee becomes a member. Paying someone a share of profit is not admission. If the membership schedule is not updated and signed, the new participant may hold a financial interest under § 79-29-701 and nothing more.

Mistake 4: Trying to file it with the Secretary of State

There is no channel and no fee, because there is no filing. Attaching it to a state submission publishes member names, capital accounts and buyout terms for no benefit. Keep it internal, signed and dated by every member, as § 79-29-123 requires for the initial agreement.

Mistake 5: Copying series language into a Mississippi agreement

The Revised Act has no series provision anywhere in §§ 79-29-101 to 79-29-1317. A clause creating segregated series in a Mississippi company describes a structure the statute does not recognise, and a creditor of one supposed series will look at the whole company. Use separate entities.

Three Mississippi Companies in Practice

Example: a poultry hauling company in Laurel

Tallahala Transport LLC had three members and an oral understanding. When one wanted out after a health scare, § 79-29-303 gave him no route, because there was no written agreement and the other two would not consent. His 34 per cent of a company worth $1.1 million, roughly $374,000, was frozen. The successor agreement added a withdrawal right on 180 days notice at three times trailing earnings, payable over 48 months.

Example: a coastal marine services firm in Gulfport

Mississippi Sound Marine Services LLC agreed verbally that four members would each fund $80,000 for a new work barge. Two paid. Because § 79-29-123 does not let the agreement waive the writing requirement for contribution obligations, the $160,000 shortfall was unrecoverable and the barge purchase collapsed. The redrafted agreement added a signed capital call schedule with a 30 day window and a dilution formula.

Example: a timber tract holding group in Hattiesburg

Pine Belt Land Holdings LLC held four tracts worth $2.6 million in one company and called them series in its agreement. A $215,000 logging equipment claim against one tract reached all four, because Mississippi's Act contains no series provision to separate them. The restructure split the tracts into four companies under a parent, each with its own agreement, registered agent and bank account.

How File.Business Drafts Mississippi Operating Agreements

We draft Mississippi agreements around the writing points first: a withdrawal clause that engages § 79-29-303, a signed capital call procedure that respects the writing requirement in § 79-29-123, assignment limitations that § 79-29-711 will enforce, and a forum and arbitration clause backed by § 79-29-1211. Where a client wants segregated assets we structure separate entities rather than a series that the Act does not recognise. The document arrives with a signature page for every member, as § 79-29-123 requires for the initial agreement, plus a contributions schedule and vault storage. Included with Mississippi LLC formation or available on its own.

Free templates against drafted agreements

A free template is a reasonable starting point for a dormant single owner Mississippi company. It is a bad trade for anything with two or more members, because the clauses templates omit are exactly the ones § 79-29-303 and § 79-29-123 make conditional on writing. At $99 the drafted version costs less than an hour of Mississippi counsel and far less than a dissolution petition. Read operating agreement essentials and LLC against S corporation next.

Mississippi operating agreement questions

Doing this in Mississippi specifically: Mississippi operating agreement drafting covers the clause set, the Revised Act sections each clause engages and the written provisions section 79-29-303 depends on. None of it is filed with the State.

Disclosure. File.Business is a private filing service, not a government agency and not a law firm. We prepare and submit filings at your direction, and nothing on this page is legal or tax advice. Filing fees, deadlines, and statutory references are current as of the last-updated date shown above and can change. Confirm current requirements with the relevant state agency before you file.