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Louisiana, the Pelican State, at the mouth of the Mississippi River, remains a North American business hub. Tax incentives, loan programs, and low taxes have kept Louisiana among the top states in the country forstarting a business, making it an ideal place to launch your limited liability company (LLC). Here’s how to form your Louisiana LLC.
How to start an LLC in Louisiana
- Name your Louisiana LLC
- Create a business plan
- Get an federal employer identification number (EIN)
- Choose a registered agent in Louisiana
- File your Louisiana Articles of Organization
- Obtain business licenses and permits
- Understand Louisiana state tax requirements
- Prepare a Louisiana LLC operating agreement
- Examine business insurance options in Louisiana
- Understand financial considerations
- Market your Louisiana LLC
What is an LLC?
An LLC, or limited liability company, is atype of business entitythat offers liability protection to its owners, while allowing more flexibility than a corporation. LLCs can be founded by one person or multiple people, and its owners are members.
Unlike asole proprietorshipor partnership—which makes no legal distinction between abusiness and its owners—LLC members won’t be held financially responsible for the company’s debt or lawsuits.
There are also tax advantages. LLCs are pass-through entities by default. This means you won’t need to file federal taxes for the LLC itself. Instead, any profits pass through to LLC members, who record them on their personal tax returns.
Is an LLC right for you?
Whether you form an LLC or anothertype of business structuredepends on your needs as asmall businessowner. An LLC might be the right choice if:
- You want to limit your personal liability.LLC owners are usually not held personally liable for legal damages and debts incurred by the company. As an owner, your personal assets couldn’t become collateral.
- You want to limit your tax obligations.LLCs are taxed only at the owners’ personal-income levels. On the other hand, corporations pay taxes twice: once on corporate income and again on personal income earned by owners or shareholders.
- You don’t need to fundraise through the issuance of stock.LLCs don’t issue stock or have shareholders likeC corporations. Although this limits your business’s ability to raise money from investors, it simplifies the business’s ownership and profitability structure.
1. Name your Louisiana LLC
A business needs a catchy, memorable name. It’s essential for building brand recognition. Your LLC’s name also needs to follow three rules:
- Your name must be unique.The LLC’s name must be different from any existing business in Louisiana. You can run a search on theSecretary of State’s websiteto see if your preferred name is available.
- Your name must mention the entity type.A Louisiana LLC’s name must contain the words “limited liability company,” or an abbreviation thereof (“LLC” or “L.L.C.”).
- Your name can’t contain certain words.你的商业名称不能包含单词用于南e a government agency, like the FBI or Treasury Department. Certain words are restricted based on proper licensing (i.e., for attorneys at law or credit unions).
2. Create a business plan
Every viable business is based on a thoroughbusiness plan. Your Louisiana LLC is no exception. A strong business plan includes your LLC’s name, a brief description of its function, a detailed market analysis, an outline of its organizational structure, a description of products or services, a profile of target customers, and layout plans for marketing, logistics, and finance.
3. Get an federal employer identification number (EIN)
Your Louisiana LLC must be assigned a nine-digit federal employer identification number (EIN) for tax purposes. State and federal tax authorities use this to identify your organization. Apply for this number for free通过美国国税局(IRS).
4. Choose a registered agent in Louisiana
As in every other state, a Louisiana LLC must appoint a registered agent to receive legal documents and service of process on the business’s behalf. A registered agent can be an individual (either you, another member, or an employee), or an agency that offers aregistered agent service. Regardless, your registered agent must:
- Reside in Louisiana.The agent or agency must have an address in the state.
- Be regularly available.The agent or agency must be on-site and available to accept documents during regular business hours.
5. File your Louisiana Articles of Organization
With a name and a registered agent, it’s time to register your Louisiana LLC with the Secretary of State’s office by filing yourArticles of Organization. You canfile these online or by mailfor a filing fee of $100. The articles must include the following information:
- Your LLC’s name
- The purpose of your LLC
- A description of the LLC’s business according to theNorth American Industry Classification System (NAICS)
- Your LLC’s street address, as well as its mailing address, if it differs
- The name and address of each manager
- The name and address of your registered agent
- Names and addresses of anyone authorized to execute documents for the LLC
- The LLC’s EIN
- Whether your LLC is member-managed (managed by ownership) or manager-managed (managed by someone hired by the LLC)
- How your LLC elects to be taxed (either as a pass-through entity or an S corporation)
- An electronic signature of a member, a manager, or someone internally authorized to file the documents
6. Obtain business licenses and permits
Louisiana's primary state-level business permit is the sales tax certificate, also known as a seller’s permit. To be eligible, you must be engaged in business in Louisiana with the intent to sell or lease goods or services that would ordinarily be taxed if sold in a retail context. You can obtain asales tax certificate onlinethrough the Louisiana Department of Revenue.
Counties and municipalities may have their own licensing requirements. For example, New Orleans requires all businesses to have anoccupational or general business license. The state offers an onlinelicensing checklistto help you determine which federal, state, and local permits apply to your business.
7. Understand Louisiana state tax requirements
Owners of Louisiana LLCs are required to pay state income and sales tax, as well as self-employment, payroll, and federal taxes. Profits aren’t taxed at the business level, likeC corporations. Instead, members pay self-employment tax on business profits and state and federal income tax on any gains (minus allowances and deductions). The LLC also owes payroll tax on employees' wages, and employees, in turn, paystate and federal taxeson those earnings.
If your Louisiana LLC sells products or services, you may need to collect sales tax to forward to the state Department of Revenue. (Some services are exempt, but for the most part, if your business sells “tangible property” or provides services that store or distribute such property, a sales tax applies.) Louisiana sales tax is 4.45% as of 2022. Louisiana also levies a franchise tax on LLCs, which begins at 4% on the first $25,000 of net income, 5% on the next $25,000, 6% on the next $50,000, 7% on the next $100,000, and 8% on excess of $200,000. However, franchise taxes only apply to Louisiana LLCs that elect to be taxed asS corporations.
8. Prepare a Louisiana LLC operating agreement
Anoperating agreementis a legal document that outlines your LLC's ownership, organizational structure, and operating procedures. Louisiana LLCs are not required to prepare or file operating agreements with any government agency—but having one can be handy for administrative and goal-setting purposes. A solid operating agreement includes:
- How ownership rights are distributed between members
- Members’ roles and responsibilities
- Procedures for when a member wants to leave the LLC or when the LLC winds down
- How you elect to be taxed as an LLC (either as a pass-through entity or S corporation)
- Information on the distribution of shares if your LLC opts to form as an S corporation
9. Examine business insurance options in Louisiana
Purchasing insurance for your Louisiana LLC is essential to managing risk. It can free up your mind to focus on growing the business. Standard insurance plans for businesses in Louisiana include:
- Workers’ compensation insurance.工伤保险可以帮助员工工资for medical expenses associated with injuries or illnesses sustained on the job and help supplement their income if they need time off work to recover. All employers in Louisiana are required to purchase this insurance. Still,business owners, such as LLC members, can exempt themselves from buying workers’ compensation insurance if they own at least 10% of the company. A single-member LLC is therefore not required to purchase workers’ compensation insurance.
- Business owners insurance.A Louisiana business owners policy covers property, income, and general liability in one plan. It’s not required by state law, though some commercial leases require it.
- Commercial flood insurance.Parts of Louisiana are prone to hurricanes and flooding. Commercial flood insurance helps protect your LLC from costs associated with flood water damage.
10. Understand financial considerations
Aside from buying insurance, you may need additional investments to get your Louisiana LLC off the ground. These might include renting a brick-and-mortar retail space, paying for a professionally designed website or social media management, or purchasing equipment and software. On top of hiring employees, you may want to pay contractors and other professionals to support the business, like lawyers and accountants.Resourcesare available to help you raise the startup funding you need.
11. Market your Louisiana LLC
With all your administrative boxes checked, it’s time to get the word out about your new venture—and make it stand out from the competition. A solidmarketing planfor your small business includes:
- Market research.Understand your target customer beforemarketing your productsor services.Market researchmight includesurveying potential customersor conducting a competitive landscape analysis.
- Advertising.Promote your LLC by looking forfree or paying for advertisingor hiring an agency to do this for you. Depending on your target audience, these ads can be print, television, radio, or digital.
- Social media.A solidsocial media presenceis a must. Create profiles and content on platforms like Facebook, Instagram, and YouTube, to reach as many customers as possible.
- Public relations.To increase brand visibility, try todevelop relationships with mediaoutlets across Louisiana and the country. A little publicity can go a long way.
Starting an LLC in Louisiana FAQ
How much does starting and maintaining an LLC in Louisiana cost?
It costs $100 to file your LLC formation documents in Louisiana, and reserving a name with the Secretary of State’s office costs $25.
Do you need a registered agent in Louisiana?
Your LLC must appoint a registered agent in Louisiana—either an individual or agency with a principal business address in the state, available during regular business hours.
Do you need a registered agent in Louisiana?
Your LLC must appoint a registered agent in Louisiana—either an individual or agency with a principal business address in the state, available during regular business hours.
How do state taxes work in Louisiana?
Owners of Louisiana LLCs pay state income and sales tax, and self-employment and payroll taxes.