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Limited Liability Company – General – Mississippi

Subject to the provisions of its certificate of formation and subject to any other laws of Mississippi which govern or limit the conduct of a particular business or activity, a limited liability company may carry on any lawful business, purpose or activity. There are specific statutory provisions applicable to and restriction on a limited liability company organized to engage in a profession.

Statutory definitions applicable to professional limited liability companies include:

A “qualified person” is an individual, general partnership, professional limited liability company or other entity that is eligible to be a member of a professional limited liability company.

A “disqualified person” is an individual, general partnership, professional limited liability company or other entity that for any reason is or becomes ineligible under this article to be a member of a professional limited liability company.

The “licensing authority” is the office, board, agency, court or other authority in Mississippi empowered to license or otherwise authorize the rendition of a professional service.

A “professional limited liability company” means a limited liability company, other than a foreign professional limited liability company, subject to the provisions of the Mississippi Limited Liability Company Act.

A “professional service” is 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, including, without limitation, certified public accountants, dentists, architects, veterinarians, osteopaths, physicians, surgeons and attorneys-at-law.

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

A limited liability company may elect professional limited liability company status solely for the purpose of rendering professional services (including ancillary services) and solely within a single profession.

A limited liability company may elect professional limited liability company status for the purpose of rendering professional services within two or more professions, and for the purpose of engaging in any lawful business authorized by §79-29-108 (1) to the extent the combination of professional purposes or of professional and business purposes is not prohibited by the licensing law of Mississippi applicable to each profession in the combination.

A domestic or foreign limited liability company may render professional services in Mississippi only through individuals licensed or otherwise authorized in Mississippi to render the services. This provision does not:

(a) Require an individual employed by a professional limited liability company to be licensed to perform services for the limited liability company if a license is not otherwise required;
(b) Prohibit a licensed individual from rendering professional services in his individual capacity although he is a member, manager, employee or agent of a domestic or foreign professional limited liability company;
Prohibit an individual licensed in another state from rendering professional services for a domestic or foreign professional limited liability company in Mississippi if not prohibited by the licensing authority.

A professional limited liability company may not render any professional service other than the professional service authorized by its certificate of formation. However, a professional limited liability company from investing its funds in real estate, mortgages, securities, or any other type of investment or from owning real or personal property appropriate for carrying on its business.

Generally, the name of a limited liability company:

(a) Must contain the words “limited liability company” or the abbreviation “L.L.C.” or “LLC”;
(b) May contain the name of a member or manager;
(c) Must be distinguishable upon the records of the Secretary of State from (i) the name of any domestic or foreign corporation, nonprofit corporation, limited partnership or limited liability company organized or registered under the laws of Mississippi; and (ii) a name reserved or registered in the office of the Secretary of State for any of the entities named above.; and
(d) May not contain the following words: “bank,” “banker,” “bankers,” “banking,” “trust company,” “insurance,” “trust,” “corporation,” “incorporated,” “partnership,” “limited partnership,” or any combination or abbreviation thereof, or any words or abbreviations of similar import.

The name of a domestic professional limited liability company and of a foreign professional limited liability company authorized to transact business in Mississippi must also comply with the following:

(a) Must contain the words “professional limited liability company” or the abbreviations “P.L.L.C.” or “PLLC”;
(b) May not contain language stating or implying that it is formed for a purpose other than that authorized by statute
(c) Must conform with any rule promulgated by the licensing authority having jurisdiction over a professional service described in the limited liability company’s certificate of formation.

No professional limited liability company organized under the provisions of this article may have as a member any person other than:

(a) Individuals who are authorized by law in this or another state to render a professional service described in the limited liability company’s certificate of formation;
(b) A professional limited liability company, domestic or foreign, authorized by law in Mississippi to render a professional service described in the limited liability company’s certificate of formation;
(c) General partnerships in which all the partners are individuals or entities otherwise authorized to be members of a professional limited liability company;
(d) Any other individual or entity not included in paragraph (a), (b) or (c) of this subsection (1) if expressly authorized by the licensing authority having jurisdiction over the professional services described in the certificate of formation of the professional limited liability company.

The licensing authority with jurisdiction over a profession may restrict or condition, or revoke in part, the authority of a professional limited liability company subject to its jurisdiction to issue membership interests. A rule promulgated under this provision does not, of itself, make a member of a professional limited liability company at the time the rule becomes effective a disqualified person.

A membership interest issued in violation of these restrictions or a rule promulgated by the licensing authority is void.

A member of a professional limited liability company may transfer his membership interests only to qualified persons. A member of a professional limited liability company may pledge his membership interest to a qualified person or to a disqualified person. A transfer of a membership interest made in violation of this restriction, except one made by operation of law or court judgment, is void.

A professional limited liability company must acquire (or cause to be acquired by a qualified person) a member’s membership interest if:

(a) The member dies and the successor in interest to the deceased member is not a qualified person;
(b) The member becomes a disqualified person; or
(c) The membership interest is transferred by operation of law or court judgment to a disqualified person.

If a price for the membership interest is established in accordance with the certificate of formation or limited liability company agreement or by private agreement, that price controls. If the price is not so established, the limited liability company must acquire the membership interest in accordance with §79-29-912. If the disqualified person rejects the limited liability company’s purchase offer, either the person or the limited liability company may commence a proceeding under §79-29-913 to determine the price of the membership interest.

The above provisions do not require the acquisition of membership interests in the event of disqualification if the disqualification lasts no more than five (5) months from the date the disqualification or transfer occurs. A member who becomes a disqualified person must notify the limited liability company promptly.

A provision for the acquisition of membership interests contained in a professional limited liability company’s certificate of formation or limited liability agreement, or in a private agreement, is specifically enforceable.

If the membership interest of a disqualified person is not acquired within ten months after the death of the member or within five months after the disqualification or transfer, the professional limited liability company must immediately cancel the membership interest on its books and the disqualified person has no further interest as a member in the limited liability company other than his right to payment of the fair value of the membership interest.

Only a qualified person may be appointed a proxy to vote the membership interest of a professional limited liability company.

A voting trust with respect to membership interests of a professional limited liability company is not valid unless all of its trustees and beneficiaries are qualified persons. If a beneficiary who is a qualified person dies or becomes disqualified, a valid voting trust continues to be valid for ten months after the date of death or for five months after the disqualification occurred.

The relationship between an individual rendering professional services as an employee of a domestic or foreign professional limited liability company and his client or patient is the same as if the individual were rendering the services as a sole practitioner.

The relationship between a domestic or foreign professional limited liability company and the client or patient for whom its employee is rendering professional services is the same as that between the client or patient and the employee.

A privilege applicable to communications between an individual rendering professional services and the person receiving the services recognized under the statute or common law of Mississippi is not affected by this article. The privilege applies to a domestic or foreign professional limited liability company and to its employees in all situations in which it applies to communications between an individual rendering professional services on behalf of the limited liability company and the person receiving the services.

Every individual who renders professional services as an employee of a domestic or foreign professional limited liability company is liable for a negligent or wrongful act or omission in which he personally participates to the same extent as if he rendered the services as a sole practitioner. A member or an employee of a domestic or foreign professional limited liability company is not liable, however, for the conduct of other members or employees of the limited liability company, except a person under his direct supervision and control, while rendering professional services on behalf of the professional limited liability company to the person for whom such professional services were being rendered.

A domestic or foreign professional limited liability company whose employees perform professional services within the scope of their employment or of their apparent authority to act for the limited liability company is liable to the same extent as its employees.

Each licensing authority is empowered to promulgate rules expressly authorized by this article if the rules are consistent with the public interest or required by the public health or welfare or by generally recognized standards of professional conduct.

The jurisdiction of a licensing authority over individuals rendering a professional service within the jurisdiction of the licensing authority is not restricted by these statutory provisions and these provisions do not affect the interpretation or application of any law pertaining to standards of professional conduct.

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