Create an LLC

How to start an LLC in Louisiana

Are you thinking of launching a new business in the State of Louisiana? Learn all there is to know about legally applying for an LLC in Louisiana in our article.

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Starting a small business of your own is an exciting venture that not all individuals get to experience. At the same time, business formation is a time-consuming journey that requires a lot of responsibility. Nonetheless, regardless of the type of business you choose, one of the most important decisions you can make before launching your new business is determining what business structure you want to adopt. 

From sole proprietorship, corporations to partnerships, and limited liability companies, there are numerous business structures entrepreneurs can choose from. Therefore, if you are leaning towards the LLC route, you've come to the right place because today, we are going to provide you with step-by-step instructions on how to start an LLC in Louisiana to simplify your LLC formation process. 

Louisiana LLC fee breakdown

Before breaking down the fees for an LLC in Louisiana, let’s take a quick look at what an LLC business structure is.  

What is an LLC?

LLC is an abbreviation for limited liability company, which is a standard business structure used for new business owners in the United States. Unlike sole proprietorships, also referred to as "doing business as (DBA)," where your company name and legal name are the same and are thus identified as one business entity for federal tax purposes, an LLC views business owners and their business as two separate legal entities. As such, a limited liability company owner gets the benefit of: 

  • Personal liability protection, meaning their personal assets are protected if they are ever sued or go bankrupt. 
  • Flexible income tax filings with the Internal Revenue Service (IRS). 
  • Management and ownership flexibility to decide what profit shares each member receives if they have a business partner or partners. 
  • Perfect for individuals who want to protect their personal assets.

In addition, there are numerous types of LLCs that you can form in Louisiana, including: 

  • Single-member LLC (similar to a sole proprietorship) 
  • Member LLC (managed by individual members) 
  • Manager LLC (overseen by an appointed manager) 
  • Foreign LLC 

Fee breakdown

Furthermore, before you start an LLC in the United States, remember that while the formation process may be similar in many aspects, entrepreneurs need to ensure they are following the state law and state tax requirements they intend to operate in as it may change from State to State. In addition, the filing fee for launching a limited liability company may also vary. Therefore, if you are not planning on starting a Louisiana business, keep in mind that the state fees may differ from the ones we have listed below. 

Filing fee

The standard LLC filing fee in the State of Louisiana is $100, which will ensure your application documents and legal information is processed within seven business days. However, if you are in a time crunch, you also have the ability to expedite this process by paying $130 for single-day processing and $150 to have your request processed within a four-hour period if filed during regular business hours. In addition, business owners also have the option of filing their application in person or by mailing it directly to the Louisiana Secretary of State Office, the Louisiana Department of Revenue, or the Louisiana Workforce Commission. 

Name Reservation 

In addition, you are also able to reserve your business name for $25 with the Louisiana State Corporations Commission to ensure no other business operating within the State has the same name as your Louisiana LLC. 

And that’s it. Starting an LLC in Louisiana is very affordable compared to other states in the United States.

A step-by-step process on how to start an LLC in Louisiana 

Moreover, now that you understand the required fees in order to start an LLC in Louisiana let's take a closer look at the steps you will need to take before you can officially and legally begin making money with your business. 

1. Name your Louisiana LLC

The first course of action business owners will need to take is to choose their LLC name. The State requires you to include "limited liability company" or "LLC" in their name. Therefore, once you have determined which name you would like to conduct business under, do a name search online with the Louisiana Secretary of State to ensure the name you want for your company is available. You can then reserve your name by registering and paying the $25 fee. Just remember, whatever Louisiana LLC name you choose, it must have "limited liability company" after it or the abbreviation. 

Trade Name 

Further, you won't be required to use the official LLC name you chose when operating your business. Instead, you can opt for "doing business as" similar to how you would if you were operating as a sole proprietor. Nonetheless, you will still be required to register your trade name with the Louisiana State Secretary's Office online. 

2. Choose a registered agent in Louisiana

Next, you will need to seek a Louisiana registered agent. Registered agents are a business entity that agrees to accept legal documents on your behalf should your LLC be sued. Here is a list of those who are able to provide you with registered agent service: 

  1. Some who is a residents of Louisiana 
  2. An attorney practicing in Louisiana or a partnership 
  3. A domestic or foreign corporation authorized to serve as an agent on behalf of another organization 

If you are stuck on where to find a suitable agent, websites such as ZenBusiness (1) offer these types of services for a small yearly fee should you require it. 

3. File Louisiana articles of organization

Moreover, once you have found a registered agent, the next thing you need to do is draft your Louisiana articles of organization. Articles of organization is a legal document you will need to file at the Secretary of State's Office. You can use either file by fax, email, or in person. Furthermore, standard information required to file articles of organization include: 

  • The form of income tax you will fall under, whether sole proprietorship, partnership, or corporation
  • The name of your LLC
  • The purpose of your LLC (why you are doing business) 
  • Your federal employer identification number 
  • Name and street address of your agents 
  • The type of LLC (single, partner, member, or manager-managed) 
  • Name and street address of all owners of the LLC, including their signature 

4. Receive a certificate of formation from Louisiana

Further, the next step entrepreneurs should take, is to wait for their certificate or formation (3) from the State of Louisiana. This certificate of formation is a form of confirmation that states your LLC has been confirmed and that your formation documents have been properly filed and processed. Therefore, once you have received this certification, you will then be allowed to file for an employer identification number (EIN), open a business bank account, and apply for a business license. 

5. Create a Louisiana operating agreement

You're almost through the entire formation process at this point. Once you have patiently waited to receive your certificate of formation, business owners should then create an LLC operating agreement. It should be noted that while an operating agreement is not mandatory, if you are considering having multiple owners to your LLC, then it is highly recommended that you do so. Essentially, an operating agreement is a form of legal document that lays out how your LLC business will run. 

In addition, it also legally documents the responsibilities of each member of your LLC as well as the rights that each of you has, including how you wish your business to be managed. Further, by drafting an agreement, you as an owner make yourself in charge of how your LLC should govern, rather than Louisiana state law. Most importantly, this document is essential as it can help you prevent conflicts from arising in the future amongst all of the owners. 

6. Get an EIN number

An EIN is also known as an employer identification number. An employer identification number is a nine-digit code that is assigned to you by the Internal Revenue Service (IRS). This identification number is similar to a social security number as it allows the government to identify your business for federal tax purposes. Beyond this, an employer identification number for your business will also allow you to open a business bank account, hire employees, and of course, correctly file your taxes each tax season. 

In addition to filing federal taxes each you, your LLC business will also be required to file a Louisiana LLC annual report. You can either file the report online or by mail, and it will cost you a $30 filing fee. This annual report will essentially be a comprehensive outline that will detail information such as: 

  • The name and address of your service agent 
  • A detailed explanation of your business activities throughout the year, such as whether you charged a sales tax on your products and services, and other important revenue information
  • The purpose of your business
  • Signatures of all owners of the business 
  • The street address where you operate from 

This annual report can then be given to shareholders who have stock with your company and other interested individuals who may wish to invest in your company in the future, as well as know your financial performance for the year. On the other hand, this annual report is also given to the State as it is believed that this form of information provided by LLCs is something that should be readily available and free to the public. 

7. Get Louisiana business licenses and permits

Moreover, you will also need to apply for a business license and any other permits in your local area in order to operate. The requirements will vary depending on the city you choose to operate out of. Therefore, to ensure you are complying with your local state government, reach out to the city clerk. To apply for a business license in Louisiana, you will need to provide specific information, which you can find by visiting geauxBIZ and creating an account. This website is offered by the Secretary of State in Louisiana in order to help guide new business owners through the process to ensure they do not make any mistakes. 

On the other hand, you may wish to file for the following permits in your area, depending on what type of business you plan on starting:

  • Alarm permits 
  • Zoning permits
  • Health permits 
  • Building permits 
  • Signage permits 

Again, this will depend on the type of business you plan on operating and may not be required for you. Nonetheless, it is always essential to reach out to your local city clerk just to be safe and avoid violating any bylaws. 

8. Open a business bank account for your Louisiana LLC

The final step of how to start an LLC in Louisiana Is to open a business bank account. This will allow you to keep your personal and business assets separate, which will be easier for tax purposes, and ensure that your individual assets are not at risk in the event that you are sued in the future. In addition, you should also apply for a business credit card which will allow you to track business expenses and build your business credit. As a result, if you ever decide to take out a business loan in the future to expand your business, you will have a positive credit history to show financial institutions who will be more likely to approve your loan request.  

With the help of Nearside and our business bank account can help you save money responsibly for your LLC. With no monthly fees, overdraft fees, or minimums, Nearside business bank account holders will also receive an automatic 2.2% unlimited debit cashback in 2022, so you can collect cash every time you make a purchase for your business using your card. 

Sign up for a Nearside business bank account today and enjoy our benefits from virtually anywhere in the world, with over 55,000 ATMS located conveniently across the globe. 

Frequently asked questions

How much does it cost to start an LLC in Louisiana?

The total cost to start an LLC in Louisiana is $100. This fee is required when you file your application. It will take up to seven business days to be processed. If you are short on time, you have the option to pay $130 for single-day processing or $150 for four-hour processing. In addition, to reserve your LLC business name in the State, business owners may also wish to secure their name online with the Secretary of State for $25. 

How long does it take to form an LLC in Louisiana?

There are numerous steps to starting an LLC in Louisiana. Therefore, from start to finish, new business owners can expect the process to take anywhere from 7 to 20 business days to complete the procedures. With that being said, you are able to expedite the process for a fee if you are in a time crunch. To ensure the process is smooth, make sure you have all the required documents and information ready with your application to avoid making mistakes and delaying the process further. 

What are the benefits of an LLC in Louisiana?

There are several benefits to starting an LLC in Louisiana. These benefits include: 

  • Personal liability protection, meaning their personal assets are protected if they are ever sued or go bankrupt. 
  • Flexible income tax filings with the Internal Revenue Service (IRS). 
  • Management and ownership flexibility to decide what profit shares each member receives if they have a business partner or partners. 
  • Perfect for individuals who want to protect their personal assets.

How is a Louisiana LLC taxed?

The Louisiana Department of Revenue collects two types of tax –state income tax and state sales tax. Unlike c corporations, LLCs are not required to pay tax at the same business level. Instead, business owners will need to pay (4):

  • Self-employment tax on all business profits
  • State tax on profits, fewer deductions or state allowances 
  • Federal tax on gains less deductions or federal allowances 

References 

  1. Zen Business
  2. Legal Zoom
  3. GeauxBiz 
  4. LLC Formation 
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