There are many benefits to forming a limited liability company (LLC) in Louisiana, but it can also be challenging if you're new to the field.
As someone with extensive knowledge of forming an LLC, I recognize the significance of providing a concise and unambiguous guide.
Consequently, following extensive research and thoughtful consultation, I have created a 7-step guide that will enable you to navigate the process effortlessly.
This article includes all the steps of getting an LLC in Louisiana and explains everything you need to know about how they work and how they can help your business grow.
Quick Summary
- To start an LLC, you must follow specific steps, such as choosing a unique business name, appointing a registered agent, filing Articles of Organization, and obtaining necessary licenses and permits
- You will also need to create an operating agreement outlining the company's structure, management, and ownership
- Understanding the legal and tax requirements of starting an LLC is important to ensure compliance with state regulations
LLC in Louisiana Formation Steps
Setting up a limited liability company in Louisiana entails filing LLC formation documents with different authorities, including the Secretary of State, the Louisiana Department of Revenue and Taxation, etc.
However, while forming an LLC is not complicated, it takes patience to go through all the responsibilities of LLC formation.
1. Choose a Business Name
Applying for a business name is very easy to do. Choose a name that reflects your brand and customers can easily remember.
After finding a name, look up a Louisiana LLC name on the Secretary of State’s website to check if the name is available [1].
Here's a short list of guidelines for naming your LLC properly:
- The name must end with "Limited Liability Company" or "limited liability company" combined. It applies to either domestic or foreign corporations.
- It cannot be deceptively misdescriptive of the nature of your business. Names suggestive of other types of businesses you won't be conducting are not allowed under Louisiana law.
- Names for LLCs should always avoid using certain words deemed to have a specific legal meaning by state/federal statutes, such as bank, insurance, trust, trustee, etc.
- Make sure you license terms in your LLC name to avoid penalties.
- Your LLC name has to be unique, and no other entity can be registered under it.
You can reserve your LLC name for up to 60 days and make no more than two 30-day extensions at no additional cost. You’ll require a $25 filing fee as a reservation cost.
2. Appoint a Louisiana Registered Agent
When registering a business in Louisiana, appoint a registered agent based in Louisiana state to receive your legal and tax documents on behalf of the company.
You can act as your own registered agent for your company, even as a sole proprietorship.
But you must meet all the Louisiana state registered agent requirements as below:
- Be available during all business hours
- Be ready to receive the legal documents on behalf of your company
- Must have a physical address in Lousiana
A Louisiana registered agent service provides additional services to make sure that everything runs smoothly, such as:
- Acting as a compliance monitor (i.e., checking up on whether state rules and regulations are followed)
- Payment processing (for tax payments, etc.)
- Recordkeeping (meeting minutes, annual reports), and more.
3. File Louisiana LLC Articles of Organization
Your Louisiana LLC can only become officially recognized by the state once it receives the LLC Articles of Organization. This file needs to be filled out and filed with the Secretary of State before you can start operating as a business entity.
Articles of Organization include:
- Name of LLC (this should exactly match what was used when filing for other legal documents)
- Principal office address (can also use P.O Box if that's where you'll receive mail)
- Registered agentLLC and LLC's mailing address (must match their physical street address)
- Information about all individuals acting on behalf of your company, like names and titles - here, LLC must nominate at least one individual who will act as its representative during this process
The online state filing fees for Louisiana Articles of Organization are $100, payable to Louisiana's Secretary of State office. You can either file online or on paper.
Learn more about the cost to incorporate an LLC in Louisiana.
4. Make a Louisiana LLC Operating Agreement
An LLC operating agreement is a written contract between the members of the company. The document specifies the management structure, business operations and all pertinent procedures necessary to run the limited liability company.
The internal document specifies membership rights and duties, ownership percentage, division of profits and losses, as well as outlines the protocols for daily operations, financial management and company amendments.
This makes it easier for businesses to make decisions because they're already laid out by law.
An LLCs Operating agreement can also help avoid legal disputes if one partner wants to sell their share or another partner isn't pulling their weight with the company workload.
Operating agreements for LLCs do not require filing with any agency. Although, you should keep them with other important documents as they are crucial in the business's formation and later stages.
If you don't feel confident writing the operating agreement, contact an attorney or a legal document preparation expert in Louisiana to write operating agreements for you.
5. Obtain Employer Identification Number
Employer Identification Number (EIN) is an identification number that the Internal Revenue Service (IRS) provides to businesses and organizations.
The EIN serves as a way for your business to be identified by the government, other companies, banks, and financial institutions.
LLCs require an EIN in Louisiana if your LLC business makes a profit or plans to hire employees. You will also need an EIN for non-profit organizations in Louisiana and corporations that foreign persons do not own.
A tax identification number is necessary to:
- Secure bank accounts within the state,
- Apply for loans from any financial institution,
- Create payroll checks on behalf of employees, and
- File Louisiana business taxes with both federal and state governments each year, along with other forms that require this information
You can obtain your EIN through the IRS by filling out a short form for your LLC online [2]. You can request an EIN for free at the IRS website, and it should take just about 15 minutes to complete.
6. Open a Business Bank Account
Once you form an LLC in Louisiana, you should open a business bank account for your company.
Any money that comes in or goes out of the LLC must flow through this account, and all expenses should also be paid from it.
This is important because you don't want personal funds in contact with LLC assets. The main aim is to protect your personal asset from being at risk.
If you’ve several LLCs under the same LLC umbrella, ensure each has its own EIN rather than using a single number for all your businesses.
Make sure to open an LLC bank account with the same name you used when your LLC.
7. Obtain Business Licenses And Permits
If you set up an LLC, but your services include business transactions, you must obtain a business license for LLCs. The same goes for LLCs that operate retail stores or professional services like law firms and medical practices.
Local licenses are available through your parish clerk or court office, where the LLC files its articles of organization.
An application form contains information about the members (LLC owners) and the required fees. You can also look up this information online by visiting Louisiana's Secretary of State website.
Another set of permits includes local business permits, which may be needed if your service requires it, but there is no specific list since every city has different requirements. So, check yours first before setting up your LLC.
Federal and state business licenses are also required for certain businesses. But it all depends on what the business is and if any federal or state laws apply.
What Is a Louisiana LLC?
An LLC is a business structure created under the laws of Louisiana state. The LLC offers many advantages for entrepreneurs, such as limited liability protection, tax implications, etc.
The LLC owners enjoy pass-through taxation, meaning they don't have to pay corporate income tax.
Compared to partnerships and sole proprietorships, LLCs in Louisiana have more stringent regulations, but they provide some protection against personal liability.
What Are the Benefits Of Louisiana LLCs?
The benefits of registering an LLC include the following:
- Pass-through taxation means the LLC is treated like a disregarded entity for tax purposes. This can be beneficial in saving money since an LLC does not have to file separate federal income taxes, payroll taxes, or state franchise taxes.
- No restrictions exist on who may own an interest in an LLC, and its assets don't become the creditors' property if a lawsuit is filed against the business owner(s).
- Personal asset protection entitles any shareholder to limited liability status, provided they do not actively manage your company's operations. If someone sues you personally because their business deal fell through, they cannot go after personal assets held by you within your business structure.
Louisiana LLC Taxes
Louisiana LLCs can be taxed as a corporation, partnership, or sole proprietorship.
Your LLC will be taxed as a corporation if you have filed with the state for this status.
Suppose your business is taxed in any other manner (i.e., it operates without filing to be considered an S-Corp). In that case, Louisiana taxes all LLCs at the same rates applied to traditional sole proprietorships.
This will be based on net income and the number of members/owners operating within the company structure.
Among taxation structures are:
- Franchise tax
- Withholding tax
- Depreciation recapture
- Capital gains tax
- Sales tax
If your business operates a limited liability company in Louisiana, you may be required to file one or more state tax forms.
Louisiana imposes a few different types of taxes for limited liability companies in Louisiana, but they're all very straightforward and easy to understand.
Federal and state taxes follow similar guidelines as other businesses operating under S-Corp status (i.e., pay at rates established by your annual earnings).
This includes withholding tax on employees' salaries within the company structure.
The state taxation laws surrounding LLC filings can vary significantly between states, so you must contact an accounting professional when establishing your business if this is something new to you or not clearly defined in the case of law yet.
Contact the Louisiana Department of Revenue (LDR) with tax questions [3].
FAQs
How Do I Get a Copy of My Articles of Organization in Louisiana?
You can get a copy of your Articles of Organization maintained in the Secretary of State's office through a formal letter to P.O. Box 94125, Baton Rouge, LA 70804. You may also obtain it online through the Louisiana Secretary of State Commercial Database.
Do I Need Business Insurance if I Have an LLC?
You need business insurance if you have an LLC. Unfortunately, the LLC structure is often only effective when it comes to personal liability protection, and sometimes, even that protection is questionable, so you will still need insurance coverage.
How Do I Register as a Foreign LLC in Louisiana?
You can register as a foreign LLC in Louisiana. Complete the Application for Authority to Transact Business in Louisiana and send it to The Louisiana Secretary of State. The filing fee is $150, payable by mail, fax, or in person.
How Do I File an LLC Annual Report?
You can file an LLC annual report by visiting the Louisiana Secretary of State website. You’ll need to log in to your account and locate the annual report filing section. Then complete the report by following the guide and submitting the required fee.
How Do I Remove a Member from an LLC?
You can remove a member from an LLC by amending your LLC's Articles of Organization and, potentially, your Louisiana LLC operating agreement too. This is possible through the Louisiana Secretary of State's website. You may also contact your lawyer to help ensure that the process is correct.
Is LLC a Great Option in Louisiana?
The LLC is a great option in Louisiana for small businesses that want to shield their personal assets from liability.
It's important, however, not to rush the decision and do your research before taking this step.
We had a small budget when we first started, so we had to independently perform all the labor-intensive tasks.
You can hire ZenBusiness if you don't have prior experience starting an LLC business in Louisiana.
Our #1 Recommendation
ZenBusiness
References:
- https://www.sos.la.gov/BusinessServices/SearchForLouisianaBusinessFilings/Pages/default.aspx
- https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
- https://revenue.louisiana.gov/
