Mississippi LLC Operating Agreement: Complete 2026 Guide + Requirements

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

Mississippi replaced its old limited liability company statute in 2010. The Revised Mississippi Limited Liability Company Act took over. It is 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. The definition reaches the affairs of the company and the conduct of its business. And it binds members, managers and assignees, whether or not they executed the agreement.

Then the Act turns around. It conditions the most important rights on writing. Section 79-29-303 lets a member withdraw in only two ways. One is at the time or on the events specified in a written operating agreement, and in accordance with that written agreement. The other is on the written consent of all the members.

So a Mississippi member with an oral understanding is locked in. They stay 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. It does so in proportion to the then current percentage or other interest of members in the profits. So a member holding 15 percent of the profit interest holds 15 percent 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. Under § 79-29-123 an agreement cannot vary the company's capacity to sue and be sued in its own name. It cannot eliminate the implied contractual covenant of good faith and fair dealing. It cannot waive the requirement that contribution obligations be in writing. And it cannot vary the winding up procedure or 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. It names the authorized signer. It states that company money is not owner money. And it 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. Mississippi is not among the states whose statutes do. That group is headed by California, Delaware, Missouri, Maine and New York. The Act instead uses § 79-29-123 to set 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. So 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. Five things are carved out. An unauthorized 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 two camps. Nevada allows duties to be eliminated outright. The uniform act states 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. There is no filing at all. 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 clauses 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. Under § 79-29-305 that figure converts directly into management power. Does a member need 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. Under § 79-29-123 the agreement cannot waive the requirement that contribution obligations be in writing. Section 79-29-503 governs liability for contributions, and § 79-29-501 covers 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. Say what the manager may decide alone. Then say 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. The agreement is where you set the thresholds. 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 covers the sharing of distributions. Set both expressly in the agreement rather than leaving them to the fallback. Add a tax distribution and a reserve that must be funded first. Note also 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. Assignment is governed by § 79-29-703, and § 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. The other route is the written consent of all members. Decide whether members may leave. Set the notice and the price. Then 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, then set 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. It also stops the agreement 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 three things enforceable. Written agreements to choose a forum. Agreements to authorize arbitration. And agreements to choose a prescribed manner of service of process. 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. Six sections do the work. Start with § 79-29-701 on the nature of a financial interest. Then § 79-29-703 on assignment. Next, § 79-29-705, titled Rights of creditor. Then § 79-29-707 on an assignee becoming a member. Then § 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 recognizes 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. They stay there unless the agreement lets them cross it. That 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. 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. That 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. One entry catches drafters. It 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. Five exceptions apply. 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. That is the provision to build a disclosure and approval procedure around. Section 79-29-315 covers access to and confidentiality of information and records. Set the inspection procedure in the agreement. Then 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. The operating agreement is where the detail lives.

Separately, § 79-29-113 requires a registered office and registered agent. The mechanics of agent appointment and change are handled by the state's registered agents chapter at Miss. Code chapter 79-35. That chapter 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 four things. The filed certificate of formation. The EIN letter. Identification for each beneficial owner. And either the operating agreement or a members resolution naming the authorized signers.

Federal customer due diligence rules require the bank to identify and certify the beneficial owners of a legal entity customer. 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. So 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. That file holds the certificate of formation and the current registered agent designation. It also holds a recent certificate of existence and any fictitious business name registration.

Mississippi Has No Series Statute, and What to Do Instead

Several neighboring and competing states let one company hold segregated pools of assets. Nevada does it under NRS 86.296. Missouri does it 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. It runs from Article 1 at § 79-29-101 through Article 13 at § 79-29-1317, and no section there authorizes 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 needs 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 recognize.

A holding company arrangement is the usual answer. There one Mississippi company owns the membership interests of several subsidiaries. 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. Take a member of a Jackson services company worth $1.5 million. Say that member holds 30 percent and wants out. There is 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 realizes less than that. Typically 30 to 50 percent less than the business is worth to a buyer. So the difference is in the region of $450,000 to $750,000. That is 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. Take four members who verbally agreed to put in $80,000 each toward a $320,000 expansion. Two paid. The company is left $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 runs each side $60,000 to $200,000 through discovery and trial. That means competing valuations, a claim for breach of the implied covenant and a § 79-29-803 dissolution petition. Section 79-29-1211 would have let the members choose arbitration and a forum in advance. That forum is cheaper and faster 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 recognize an oral or implied agreement. That reads like permission. Section 79-29-303 then denies withdrawal rights to anyone without a written one. Read the definition without the operative sections and you end up trapped. That is how Mississippi members stay 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. They read it 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. There is no filing. Attach it to a state submission and you publish member names, capital accounts and buyout terms. You get no benefit for that. 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 recognize. 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. One wanted out after a health scare. Under § 79-29-303 he had no route. There was no written agreement, and the other two would not consent. His 34 percent 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. Under § 79-29-123 the agreement cannot waive the writing requirement for contribution obligations. So 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. Its agreement called them series. A $215,000 logging equipment claim against one tract reached all four. Mississippi's Act contains no series provision to separate them. The restructure split the tracts into four companies under a parent. Each got its own agreement, registered agent and bank account.

How File.Business Drafts Mississippi Operating Agreements

We draft Mississippi agreements around the writing points first. There is a withdrawal clause that engages § 79-29-303 directly. There is a signed capital call procedure that respects the § 79-29-123 writing requirement. There are assignment limitations that § 79-29-711 will enforce. And there is 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 recognize. The document arrives with a signature page for every member, as § 79-29-123 requires for the initial agreement. It also arrives with 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. The clauses templates omit are exactly the ones § 79-29-303 and § 79-29-123 make conditional on writing. At $97 the drafted version costs less than an hour of Mississippi counsel. It costs 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.