Starting LLC in Louisiana: Peculiarities & Detailed Manual
Want to start an LLC in Louisiana? It is a profitable decision for a business, as the state has waived corporate tax in favor of gross corporate income tax. So you’ve decided to start an LLC? Not sure how to initiate the process? To start an LLC in Louisiana, you need to get ready for several stages.
We’ve prepared a guide for you with just six steps to form your LLC and to get success! You can also refer to the virtual LLC formation service.
Note: ZenBusiness is the best service to file the LLC. You’ll surely appreciate reasonable prices, company values, and other peculiarities.
An Louisiana LLC: The Notion & Essence
Many Louisiana business owners choose to start an LLC. So, unlike a corporation, they can take advantage of flexible management. We’re talking about the protection of personal assets that sole proprietorships and general partnerships lack.
The state of Louisiana puts forward simplified requirements for registration and maintenance of LLC and invites business owners to choose the type of taxation. Do you still have doubts about the LLC?
6 Stages to Form an LLC Correctly
Stage №1: Choose Your LLC Name
The LLC name is a significant aspect, as it is the name of your company that makes the first and strongest impression on the audience of your potential customers! The name must be different from existing company names and must meet Louisiana’s regulatory requirements. Now get started with the following aspects.
LLC name in terms of jurisdiction
The State of Louisiana obliges business owners to include the abbreviation DDS or the phrase – limited liability company in the name. Please note that the terms corporation or registered are prohibited. In addition, you cannot use the designations of other forms of business: banks or law firms.
Take care of the explanations
You must include in the title an explanation of the nature of your business. For example, if you are engaged in the computers’ repairing, write in the LLC title – computer wizard. If you have any values or principles, also indicate this. For example, if you are farming, use the term natural, nitrate-free, etc.
So, you need to get a little creative and fully comply with Louisiana’s legal requirements.
Stage №2: Hire a Registered Agent
A registered agent is called a statutory agent in Louisiana and will help you to start an LLC. The agent can be an Louisiana resident, natural or legal attorney responsible for sending and receiving legal documentation on behalf of the future company. A company representative can also be an employee of the company or its owner. The State of Louisiana notifies:
According to the laws of Louisiana, every business registration confirmed by the Secretary of State requires an agent with an actual physical address in the state. As it is sometimes called, an agent (or a registered agent) can be almost every person of legal age and who’s a legal resident of Louisiana.
The primary responsibility is to receive legal documents served on the company in the case of legal or administrative processes. Therefore, an agent must inform the business manager about the processes and forward the legal documents to the company.
A registered agent guarantees an excellent reputation for your Louisiana LLC. Also, if your business gets worse, Louisiana can take legal action against it without notifying you. The registered agent will always receive appropriate notification and will be able to take timely measures to protect your interests as an attorney.
You should apply to the online service to get started a business in compliance with all regulations and requirements. So, you will have the opportunity to filter spam and protect your personal and contact information. If you use the ZenBusiness and Northwest Registered Agent to form an LLC, you will receive the free services of a registered agent.
Stage №3: Applying for Registration
To register a business in Louisiana, you must file the Articles of Association with the Louisiana State Secretariat. If you are anxious about your LLC formation, you can submit your documents for pre-processing, which will allow the Secretary of State’s office to advise you of the eligibility. It can be a good option if you get started for the first time in an LLC without consulting an attorney. Be sure to provide:
- The desired name of your business.
- Personal and contact details of the registered agent.
- Business management form.
- Personal and contact details of the manager of your company.
- Signature of the applicant and registered agent.
- Date of application submission.
You can either print out a PDF form and send it by mail or file it online at geauxBiz.
Cost to form an LLC: In the state of Louisiana, business owners should pay a fee of $100 to open an LLC.
Processing time: The state will need up to 7 working days to process your mailed paperwork for Louisiana LLC formation, complete the documents and send it back to you. Nevertheless, most papers are filed online and processed within 2 days. Please consider that the counting of working days starts once all the needed documents are filed appropriately and put in order.
Stage №4: The Operating Agreement Background
While an operating agreement is not binding in Louisiana, creating one could significantly improve the company’s climate. An operating agreement is a document that describes the structure of a project, the way it works, the rights and obligations of each partner.
This document reflects the consistency of partners and thereby reduces the chance of controversy and disputes. Therefore, it is significant that all members of the future LLC carefully read this document before joining the company.
An attorney can help draw up an operating agreement and determine the way income and liabilities will be distributed among the owners of your LLC. You will find more information about the operating agreement here. Prepare to enter the following information:
- Names of all participants.
- The rights and obligations of each of the listed participants.
- Description of procedures for voting or resolving differences between members.
- Regulations on the financial share of participation of LLC members.
- Description of the way you’re going to manage the LLC.
So, do not neglect this stage of LLC formation. It largely guarantees your safety and the observance of your rights by all members of the business project.
Stage №5: Tax Compliance
To conduct a business that you want to register as an LLC successfully, you need to comply with several tax requirements at various levels.
Requirements of Federal Significance
Does your LLC involve multiple owners? Then you need to take care of the EIN! The EIN, or Employer Identification Number, is a unique nine-digit number assigned by the IRS to US corporations. This number must be obtained by all business owners under whose leadership the hired employees work. A business owner can obtain an EIN from the IRS in person or by mail.
Your state’s cess requirements
The state of Louisiana levies LLC taxes depending on the field of your business. And income taxes are considered the most important. If your company is recognized as an individual proprietorship or a partnership – a so-called pass-through entity – you will have to pay income taxes on your tax statements.
Nevertheless, if your LLC is chosen to be taxed as a corporation, it will be eligible for the corporate income states of Louisiana. You can know more about the state’s corporate income taxes by clicking on this link.
Another general requirement for LLCs is sales taxes. If your company is specialized in selling certain retail products, rental properties, or temporary accommodation, you will be obliged to pay sales taxes. For this, you will have to acquire a sales tax certificate. At the moment, the sales tax in Louisiana is equal to 4,5%. You can get to know more about the state’s sales taxes following this link.
LLC that have employees are required to pay some additional taxes. The most prevalent of them is the withholding tax: it requires you to retain a small percentage of the employee’s salary and forward it to the state’s government.
To understand more about this type of tax, you can check this FAQ about withholdings. Keep in mind that employers are also obliged to pay the taxes for unemployment insurance – despite the fact it’s named “insurance,” this program is financed by the taxes applied on business owners. To get some more detailed information about an employer’s duties for unemployment insurance, check this summary.
Moreover, you will possibly have to pay some industry taxes according to the specialization of your business. Louisiana has a wide range of unique taxes applied to companies, such as taxes for fuel, hazardous wastes, or wine production. In this guide, you can find the complete listing of taxes that can be applied to the state’s businesses.
It can be a little distressing to deal with all these taxes, and especially to file a bunch of different forms. To ease this process, you can take advantage of LaTap – Louisiana’s online portal that can help to optimize your taxes.
Local Tax Business Demands
You could also need to pay some local type of taxes depending on the exact location of your business. The most prevalent one is the tax for your property; to determine its precise amount for you, consult your local property tax evaluator.
Moreover, the laws of Louisiana permit every county (or parish, as it’s often called) to raise sales taxes by up to 7% additionally. You can know more about your county’s taxation for sales in Louisiana’s sales tax home book.
Stage №6: Getting Business Licenses & Permits
In Louisiana, there’s no common business license that every LLC should acquire to function.
Nevertheless, the federal government requires the licensure of specific fields (like aviation, agriculture, etc.). You can know about more industries that require licensure after consulting the listings of the Small Business Association.
The state also has a dozen licenses required for some specific industries (florists, attorneys, surveyors, etc.). To see which charges might apply to your business, consult the geauxBiz portal of Louisiana. This source can help you to systematize all the licenses you should obtain.
Other Stages for Business Owners After LLC Registration
After completing the six mandatory steps towards starting an LLC, you need to take care of the following.
Opening a business bank account
Separate your personal and LLC accounts. Thus, you will be sure of the safety of your personal and financial data. Besides, you won’t have any hassle when filing your charge returns. Your EIN will help you open a business account quickly, no matter what you choose a bank or credit union.
Business Insurance
All owners of companies/corporations, regardless of their form of management that attracts employees, must go through the compensation insurance procedure. All basic and detailed information is available with the Louisiana Bureau of Workers’ Compensation.
This policy aims to protect the rights of workers who are injured at work and unable to work. It will not be superfluous to get a civil liability insurance policy, as well as pay attention to some other types of insurance.
Income reporting
Income reporting is the reporting of all the income you made from your business. It should be filed no matter how is your yearly income: positive or negative. The form you have to file for this report depends on your business type; here, you can see more of these forms.
Referring to the services of a qualified accountant
All the LLCs of Louisiana should essentially file an annual report to update the state about the processes that happen during the year. It’s possible to file this report form online using geauxBiz.