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Are you interested in starting a business in Louisiana? Registering an LLC in Louisiana offers multiple advantages, including tax benefits and low costs to file and maintain your business.
Before starting the process of filing a business in Louisiana, it’s important to understand the process, including the steps necessary and what your obligations are.
An LLC is just one of several business structures you can choose for your Louisiana business. One of the advantages of filing as an LLC is that such a filing could protect you against legal liability if a lawsuit is filed against the business.
Members are generally not liable personally for any debts that the business takes on. That business structure, known also as a financial pass-through business, means you may not be liable individually if there is a court judgement issued. In such cases, your personal assets would likely be protected as would those of other members of the LLC.
There are many types of LLCs available in Louisiana and elsewhere. Each type has its own advantages and opportunities. Understanding these differences can help you choose the right structure for your business.
The most common LLC types are:
Taxes are an important consideration for most corporations. In Louisiana, as in most states, most LLCs do not pay federal income taxes. That’s because most LLCs file as single-member LLCs. Because the single-member LLC structure requires taxes to be on the members’ tax returns, most LLCs in Louisiana do not pay federal taxes.
The Louisiana Economic Development office provides a searchable database of financial business incentives to operate within the state. The tax advantages include:
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This includes all of the documentation you need to get your LLC formalized.
We’ll check federal trademark records in relation to your business name.
Our dedicated business formation team is here to help with your LLC application!
Is an essential contact between an LLC and the state it's registered in, and helps take care of all the formal processes.
It helps you file tax returns for your business and reduces your personal liability. It's necessary to open a business bank account.
We've got your back with all the official annual compliance for your state so that you can operate legally.
You'll receive this key document, which outlines your business's structure and other information.
We’ll walk you through the six steps required to form your Louisiana LLC. To have a quick overview, here are the steps you’ll need to take to establish an LLC:
Below, you’ll find a detailed explanation to walk you through each step.
One of the first important decisions you’ll have to make is choosing a name for your Louisiana LLC. You’ll need to make sure that name is not already in use and that it abides by state guidelines, including:
The state of Louisiana has a searchable database that allows you to check whether the name you want is unique and available. You can search by name or other criteria. The returns show business names, service marks, trade names, non-profit corporations and trademarks. For example, a search for the name “Jambalaya” returns five pages of results that can help you narrow down the name that works for you.
If you’re unsure about the name for your LLC and are concerned it might end up being taken, you can reserve the name for up to 60 days by paying a small fee.
If you intend to conduct business under any name except the LLC’s name, you should file an Assumed Business Name form. The filing fee for this form is $25 and there is an additional $20 processing fee. The form must be typewritten, filled in accurately and mailed to 450 N 4th Street, PO Box 83720, Boise, ID 83720-0080 with the required fees. The form may also be filed electronically.
Keep in mind, an Assumed Business Name is not a requirement of operating an LLC in the state of Idaho. Some LLCs operate using the name of the LLC vs. using an assumed name.
Oftentimes, businesses use several names. One is their incorporation name and the other is their trade name or doing-business-as (DBA) name. To establish a DBA name, a business needs to go through the same process of making sure the name isn’t already in use in Louisiana. Next, the business will need to file paperwork with the state to register the trade name (also sometimes called the assumed name).
The reason businesses are required to file a trade name is the act allows the public to know with whom it’s doing business. Registering the business allows the public to track and verify that the entity it’s doing business with is an official business and what its name is.
However, filing a DBA name is not the same as filing the official paperwork to form your business as an LLC. It’s merely an additional step that companies in Louisiana may choose to take.
To file your DBA name, you’ll need to complete a form available on the state website. The three-page form includes a transmittal form (used for many state business filings) that requires the following:
The form also includes an Application for Reservation of Trade Name, Trademark or Service Mark. The application requires the following:
Similar to the business name process, the trade name may be reserved for 120 days.
State regulations prohibit the use of trade names that deceptively or falsely suggest that the organization is a charitable or nonprofit organization when it is actually a profit-making entity.
The filing fee is $25. The completed application can be sent to:
Secretary of State
Commercial Division
P.O. Box 94125
Baton Rouge, LA 70804-9125
After you decide on a name and have it registered in Louisiana, you want to be sure it’s protected. Registering a trademark is one way to do so.
Trademark protection prevents another business from using your name. It’s a powerful tool, though it does not provide blanket protection.
To begin, you can access the Trademark Electronic Search System, a component of the U.S. Patent and Trademark Office. There you can research existing trademarks. In some cases, businesses choose to hire a trademark attorney or a business that specializes in researching trademarks and providing registration services.
Businesses can trademark other items beyond their name, including symbols, words, phrases or designs that identify or distinguish the business from others.
Louisiana law allows businesses to file trademarks with the Louisiana Secretary of State. However, registering a trademark does not confer substantive rights or a “claim” to the use of the trademarked entity. Trademark rights come from active use, not registration.
Filing a trademark is another important way to distinguish your business, its name and its words and symbols, from others. It can help prevent consumer confusion and unfair competition issues.
The form to file a trademark is the same one used to file a DBA. The only addition is that when filing an application for a trademark or service mark, you are asked to file the class number (category) in which you are seeking the trademark. The form includes a list of 43 goods and services categories to choose from.
Louisiana, like most states, requires LLC businesses to file articles of organization. These foundational business documents include a general description of the business and when it becomes active.
Businesses in Louisiana must file their Articles of Organization with the Louisiana Secretary of State office. There is a $100 filing fee.
The Articles of Organization form includes the following fields:
The state notes that the articles filed are intended to cover only the minimum provisions required by law. The state encourages companies to seek legal counsel to determine if additional provisions should be included related to legal and tax matters.
In addition to the Articles of Organization, companies are also required to submit an Initial Report that includes:
Articles of Organization must be filed by mail at:
Secretary of State
Commercial Division
P.O. Box 94125
Baton Rouge, LA 70804-9125
Or online at www.sos.la.gov
Selecting a registered agent is a smart move if you are forming an LLC in Louisiana. All businesses registered with the Louisiana Secretary of State are required by law to have an agent with a physical address in the state.
Any owner or employee of a Louisiana business may act as its registered agent, as long as they are 18 and have a street address in the state.
The registered agent is the entity that receives the formal correspondence from the state. The registered agent is also the entity that is served with process if a business is involved in a lawsuit.
Why would a business choose to hire a registered agent rather than do it themselves? Here are some of the main reasons.
The registered agent’s personal information is on file with the state. Therefore, if you are your LLC’s registered agent, that means your name and home address are a part of the public record. When you use an independent registered agent, you can ensure that your personal information is better protected.
When you hire a registered agent, you are hiring a business that will maintain and coordinate a calendar on your behalf. The registered agent can coordinate the management of the annual reports, filings and paperwork necessary to ensure that your business remains compliant with state laws.
If you fail to file the right paperwork on time, your LLC may find itself facing complex legal issues, penalties, late fees and other messy complications. By hiring a registered agent, you can be sure that the required filings are done accurately and on time.
The registered agent will also maintain an electronic record of those filings and paperwork on your behalf. Preserving digital copies of your records means you can be sure your important business paperwork is protected.
It can be quite embarrassing if you are served with legal documents at your place of business. Such a situation can happen in front of employees and customers.
To preserve your business reputation and prevent legal documents from being served at your workplace, hire a registered agent to receive such materials.
Does your business have operations in multiple states? If so, having an external registered agent service is a smart move. Your registered agent can manage your filings in multiple states.
If you’re focused on running your business, you do not want to be bound to an office. A registered agent has to be available during normal business hours every day.
By hiring a registered agent, you can work from home, take business outside the office and go on vacation.
As noted, your business has the option to serve as its own registered agent. However, the coordination, management and risk of being served in person are all strong reasons to look for an external registered agent service. Our registered agent services provide the peace of mind and experience to keep your filings on time and accurate.
LLCs in Louisiana are encouraged to create an operating agreement and file it with the state. The operating agreement puts to paper the specifics of how the business will be run and organized from its founding to dissolution. The operating agreement also spells out details that can help resolve disputes later if members are in disagreement about a direction for the business.
Operating agreements are particularly important if your business is organized as a multi-member LLC. Working out issues and processes when you start your business is important, and the operating agreement details all of the core decisions.
At its base, an operating agreement details the following:
Louisiana does not require a business to file an operating agreement. However, it is a smart idea to create one and keep it on file with other company documents.
Here is a closer look at the common components of an operating agreement.
Any business that operates as an LLC, has employees or files tax returns must have an Employee Identification Number (EIN). It’s an IRS requirement and is often also necessary for completing other basic business functions, such as hiring employees, opening a bank account or filing state taxes.
An EIN acts in much the same way as a Social Security number as it is a unique identifier used on tax forms. Your business can apply for an EIN on the IRS website or via fax or mail based on where you file your taxes. Applicants must have a valid taxpayer ID, such as a Social Security number.
As your registered agent, we provide EIN number services as a third-party administrator, ensuring your IRS forms are filled out correctly and that your EIN is available for use.
Louisiana, like all states, has its own tax regulations and rules. Here is a closer look at Louisiana tax guidance for LLCs.
LLCs in Louisiana are taxed the same way they are at the federal level. If an LLC is taxed as a corporation for federal tax purposes, it will be taxed the same way in Louisiana.
At the state level, Louisiana has a variable business income tax rate. LLCs will pay between 2 percent and 6 percent for state income taxes, depending on the total earnings, minus standard allowances and deductions.
Louisiana LLC businesses have to collect state sales and use tax if they sell physical products or provide certain services. These taxes are owed to the state’s Department of Revenue. The sales taxes need to be collected at the point of purchase.
State sales taxes vary based on the region, city and county in which your business is based. While the state establishes a base of 4.45 percent, it also allows local jurisdictions to collect a local-option sales tax up to 7 percent. As of 2022, there are 262 local tax authorities across the state collecting local taxes that total 5.08 percent on average.
Beginning in 2016, Louisiana became a single sales factor state. That approach means that income earned is taxed based on a calculation of the ratio of in-state sales to the total sales.
Louisiana also has a throw-out provision, which means that if the business is not taxed in the state of the receipt, or the location cannot be determined, then the sales are excluded from the formula used to calculate tax.
Businesses need to register with the state Department of Revenue to collect and pay sales taxes, either online or by mail.
The self-employment tax is 15.3 percent for each LLC member or manager who obtains profits from the company.
If your LLC has employees, you will need to pay employer taxes. This step requires submission of the state form R-16019 to register. Your business will need to withhold and pay employee income taxes and pay state unemployment insurance taxes to the Louisiana Workforce Commission on a quarterly basis.
In addition to income and sales taxes, your business will be required to file corporate state business tax returns. Louisiana applies corporate taxes to taxable income via a series of incremental marginal rates.
When you’ve completed the processes to open an LLC business in Louisiana, it’s important to consider the other major financial decisions and business processes to start.
When you start an LLC, it’s a smart idea to open a separate bank account exclusively for the business. It can be a risky proposition to mingle your professional and personal bank accounts. Here are three of the main reasons why:
1. Liability. One of the main reasons to form an LLC is the liability protection the business structure affords. If you commingle your personal and professional assets, courts may perceive the LLC as a shell entity and allow your creditors to attempt to seize assets in your personal bank account
2. Taxes. Filing taxes will be much simpler with your financial statements in separate bank accounts, especially if you or the business is ever audited
3. Reputation. Writing checks from a business bank account gives your business a professional look with customers, creditors, employees and vendors
Louisiana LLC businesses must file an annual report with the Secretary of State. This report is a simple form that must be filed annually by the renewal date. You will be asked to update basic business information and complete an online form.
Having the right financial systems in place is a critical need for any new business. A finance system helps to track core accounting functions such as accounts payable and accounts receivable, manage your payroll and coordinate HR functions.
The finance system can also ensure that payroll deductions, sales taxes and other state requirements, such as annual fees, renewals and registrations, are followed.
Consider hiring three important advisors to help with your business.
1. A tax consultant can make sure your returns are accurate, filed on time and leverage every possible tax advantage to reduce your tax burden
2. An accountant can ensure your books are in order and reports are created that show you your balance sheet, available cash and other financial indicators
3. An attorney helps you navigate legal issues, such as agreements, partnerships, and other contractual matters
When your business is ready to launch, you still may need to navigate local permitting and licenses for things like property and health requirements. Be sure to check with your local community to know what is needed to launch. Finally, certain professions – from tradespeople to doctors and lawyers – may need to be licensed by the state to operate as a business.
Tailor Brands helps Louisiana LLC businesses launch successfully. We offer hassle-free services to quickly check name availability, file necessary paperwork and ensure compliance. To learn more, contact us today.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.
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