How to Start a Contracting Business in Mississippi: Commercial, Residential and Remodeling Paths

If you searched for how to become a general contractor in Mississippi, you have probably noticed that the state does not hand out one all-purpose credential. The Mississippi State Board of Contractors (MSBOC) licenses contractors by type of work and size of job. The first decision you make determines your application, your insurance requirements, your exams and your costs. This guide walks through each path and the steps that apply to all of them.

This article is informational content, not legal or tax advice. Licensing rules, fees and tax treatment change, so confirm every figure with the agency named before you spend money. If you have partners, employees, large contracts or unusual ownership, talk with a Mississippi attorney and a CPA before you file anything.

Materials and Documents You Will Need

Gather these items before you start the application process. Some apply only to commercial work, and the notes say so.

• A business name that is not already in use or reserved on the Secretary of State's records
• A registered agent with a physical Mississippi street address
• General liability insurance of $300,000 per occurrence and $600,000 aggregate (commercial applicants). Residential applicants provide proof of coverage.
• A statement reviewed by a CPA showing net worth of $50,000 for a major classification or $20,000 for a specialty classification (commercial applicants)
• A Secretary of State good standing certificate (commercial applicants)
• Application fees: $400 for a commercial license or $50 for a residential license, both non-refundable, plus $100 for each additional classification
• Time to sit for two open-book PSI exams: Law and Business, plus the exam for your trade
• Workers' compensation proof, once you have 5 or more employees
• Money set aside for city privilege licenses and any local bond, since both vary by location

Step 1: Choose Your Path Before You Do Anything Else

The MSBOC's FAQ for 2026 sets the thresholds that decide which license you need. Read the table as a starting point, not a final answer.

Type of work	License needed	Threshold
Commercial jobs	Commercial license	Over $50,000
New residential construction	Residential builder license	Over $50,000
Residential remodeling	Residential remodeler license	Over $10,000
Residential roofing	Residential roofer license	Over $10,000

A residential builder may also do commercial work up to 7,500 square feet. That makes the residential builder license a useful middle path for owners who build houses, small retail spaces or light commercial projects. Ask the board how it measures the threshold on contracts with change orders or phased work, because a project that starts small can cross a line partway through.

The trade-off is simple. A remodeler or roofer license costs less and needs less net worth, but it limits the jobs you can bid. A commercial license opens the largest jobs, but it requires the most insurance and the CPA-reviewed financial statement.

Step 2: Form the Business and Register It With the Secretary of State

The Mississippi Secretary of State's Business Services Division handles entity formation, and it is the agency that records your name. Registering with the Secretary of State is a registration, not a license. You still need the MSBOC license, the local license and the tax registrations described below.

If you form an LLC: File the Certificate of Formation (Form F0100). The filing fee is $50. The name must include the words limited liability company or the abbreviation LLC or L.L.C., and it must be distinguishable from other names on the state's records. You can reserve a name for 180 days for $25. Online filings are usually approved immediately, and filings that need staff review are normally returned within 24 hours.

If you form a corporation: File Articles of Incorporation (Form F0001). The filing fee is $50.

Every LLC must keep a registered agent with a physical Mississippi address. The agent can be an individual Mississippi resident or a business authorized to act in the state. Commercial registered agents file a listing statement with the Secretary of State for $100 and appear on the state website. Noncommercial agents need no state registration, but you must have their permission before you list them.

Annual reporting is the step people forget. An LLC files its annual report (Form F0108) online each year, with no fee, on or after January 1 and before April 15. Corporations file Form F0008 for $25, also by April 15 for profit corporations. Missing the report can lead to administrative dissolution, which can stop your contracts cold.

If you will operate under a name other than your legal name, register a fictitious business name (Form F0070) for $25. File it with the Secretary of State, not the county. Use the Secretary of State's business search at corp.sos.ms.gov business search to check name availability before you file. Start at sos.ms.gov business services for forms and fee information, and file online through the Secretary of State online filing portal.

Tax treatment depends on the entity. An LLC taxed as a partnership reports its income on the members' Mississippi returns and does not owe the corporate franchise tax. An LLC taxed as a corporation pays Mississippi corporate income tax, plus the franchise tax. For tax year 2026, the franchise tax is $0.50 per $1,000 of capital above $100,000, with a $25 minimum, and it is scheduled for repeal effective January 1, 2028. Your CPA should decide which tax election fits your business.

Step 3: Assemble the MSBOC Application Packet

Commercial applicants need the full packet. Residential applicants need a shorter one, but the same care applies. The board's FAQ and application forms define the current requirements, so check them before you submit anything.

1. Pick your classifications. Your base license covers one major classification. Each additional classification adds $100 to the application fee.
2. Buy the insurance first. Commercial applicants need general liability coverage at $300,000 per occurrence and $600,000 aggregate. Ask your agent to issue the certificate in your exact legal name, because a mismatch can delay your file.
3. Get the CPA statement. A CPA reviews a statement showing at least $50,000 net worth for a major classification or $20,000 for a specialty classification. Start this early, because it requires current financial records.
4. Order the good standing certificate. Commercial applicants need proof from the Secretary of State that the entity is in good standing. Order it after your annual report is current, not before.
5. Prepare workers' compensation proof. You need it once you have 5 or more employees. If you are a sole proprietor with no employees, confirm with the board what it requires from you.
6. Pay the fee. The commercial application fee is $400, and the residential fee is $50. Both are non-refundable, so do not submit until the packet is complete.

Step 4: Pass the Open-Book PSI Exams

The board uses open-book PSI exams. Every applicant takes the Law and Business exam, and you also take the exam for your trade. Open book does not mean easy. Candidates who skim the reference material often run short of time on questions about contract terms, lien rights and business finance.

Study the reference material before exam day. Mark the tabs or build a quick index for the sections you expect to need most. Practice finding answers under time pressure, not just reading the material once. Confirm your scheduling steps, any testing charges and the retake rules directly with the board, because this article does not list them.

Once licensed, the license is valid for one year. Put the expiration date on your calendar the day you receive it, and confirm the renewal requirements with the board well before that date.

Step 5: Get Your Local Licenses

Mississippi has no single statewide general business license. Instead, every city, town and village issues its own privilege license under Miss. Code 27-17. Counties license only businesses located outside municipal limits. If you work in several cities, you may need a license in each one.

Local requirements vary widely. Brandon, for example, registers contractors at $25 per trade with a $5,000 bond, as of 2026. Other cities set their own fees and rules, and this article does not list them. Call the city clerk or the building department in every city where you plan to bid, and get the current fee and any bond requirement in writing. Do not assume that a state license or an LLC filing covers local work.

Step 6: Register for Taxes With the Department of Revenue

If you make retail sales, you need a sales tax permit from the Mississippi Department of Revenue (DOR). The DOR describes the permit as the privilege of operating a business in Mississippi, and there is no fee for it. The DOR may require a bond from applicants with no permanent Mississippi location. Apply through the DOR sales and use tax registration page, and see the main site at dor.ms.gov.

Several tax rules matter most for contractors:

• Sales tax: The state rate is 7%. There is no county add-on. Cities levy additional sales tax only in Jackson and Tupelo.
• Contractor's tax: Non-residential prime contracts over $10,000 owe the DOR's 3.5% contractor's tax. Use a Material Purchase Certificate when you buy materials for those jobs. Ask the DOR how the rule applies to your specific contract structure before you bid.
• Personal income tax: For tax year 2026, the rate is 0% on the first $10,000 of taxable income and 4% above that. The top rate steps down to 3.75% for tax year 2027.

Keep separate records for materials, labor and taxable receipts from the first job. Contractors who mix personal and business purchases often discover the problem during an audit, when it is expensive to fix.

Step 7: Plan Your Hiring and Payroll

Mississippi has no state minimum wage law, so federal wage rules and any local ordinances set your floor. Workers' compensation coverage becomes a requirement once you reach 5 or more employees, and you need it for your MSBOC application at that point. Set up payroll tax accounts and workers' compensation before your first hire, not after. Confirm your federal and state payroll registration steps with your CPA.

Common Mistakes to Avoid

• Bidding above your license. A residential remodeler who bids new residential construction over $50,000 is working outside that license. Check the threshold before you sign a contract, and ask the board when a project is borderline.
• Splitting a project to stay under a threshold. Dividing one job into smaller contracts to avoid a license requirement invites trouble. Ask the board how it views the arrangement.
• Treating the LLC filing as a license. The Certificate of Formation makes the entity exist. It does not authorize you to contract for construction.
• Filing a fictitious name with the county. Assumed names go to the Secretary of State, at $25.
• Missing the April 15 annual report. A late report can lead to administrative dissolution, which breaks the good standing you need for commercial licensing.
• Underestimating the net worth statement. The CPA review takes time, and a shortfall can delay your commercial application.
• Buying a certificate of insurance with the wrong limits or name. Commercial applicants need $300,000 per occurrence and $600,000 aggregate, in the exact legal name of the applicant.
• Skipping the city license. A state license does not authorize work inside a city that requires its own privilege license.

What Results to Expect

A complete packet, filed once with the right fees, is the most reliable way to avoid delays. Many applicants find that the exams and the CPA statement take longer than the paperwork itself, so start those early. The board sets its own review timeline, so ask for it directly rather than planning around a guess.

Your results after licensing depend on your experience, your exam performance, your insurance and the work you choose to bid. A license makes you eligible to contract within its limits. It does not guarantee contracts, and it does not replace the local permits, bonds and tax registrations your projects require.

Next Steps

Start with the path decision. Once you know whether you need a commercial, residential builder, remodeler or roofer license, price your insurance, schedule your CPA review, form your entity and order your local license list. Keep a calendar with the April 15 annual report, the one-year license expiration and every city renewal date.

Check every fee, threshold and deadline in this article against the agency that administers it before you act. The Secretary of State, the Department of Revenue and the MSBOC each publish current forms, and the small business development centers listed through the Mississippi Small Business Development Center Network can help you review your plan at no charge. For complex situations, including mixed commercial and residential work, multiple owners or large bonded projects, consult a qualified Mississippi attorney and CPA.

Informational content only. This article is not legal, tax or licensing advice. Confirm current requirements with the Mississippi State Board of Contractors, the Mississippi Secretary of State, the Mississippi Department of Revenue and the city or county where you plan to work.