How To Start an LLC in Louisiana in 11 Steps — Starting a Business (2022)

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Louisiana, the Pelican State, at the mouth of the Mississippi River, remains the business hub of North America. Tax incentives, loan programs and low taxes have kept Louisiana among the top states in the country to start a business, making it the perfect place to launch your limited liability company (LLC). Here’s how to form your Louisiana LLC.

How to start an LLC in Louisiana

1. Name your Louisiana LLC
2. Create a business plan
3. Get a federal employer identification number (EIN)
4. Choose a registered agent in Louisiana
5. File your Louisiana Articles of Organization
6. Get business licenses and permits
7. Understand Louisiana state tax requirements
8. Prepare a Louisiana LLC operating agreement
9. Check out business insurance options in Louisiana
10. Understand financial considerations
11. Market your Louisiana LLC

What is an LLC?

An LLC, or limited liability company, is a type of business entity that offers liability protection to its owners, while allowing more flexibility than a corporation. An LLC can be founded by one person or several people, and the owners are members.

Unlike a sole proprietorship or partnership—which does not make a legal distinction between the business and its owners—LLC members will not be financially responsible for the company’s debts or lawsuits.

There are also tax advantages. The LLC is a pass-through entity by default. This means you do not need to file federal taxes for the LLC itself. Instead, any profits are passed on to the LLC members, who record them on their personal tax returns.

Is an LLC right for you?

Whether you form an LLC or another type of business structure depends on your needs as a small business owner. An LLC may be the right choice if:

• You want to limit your personal liability. LLC owners are generally not personally liable for legal damages and debts incurred by the company. As an owner, your personal assets cannot be collateral.
• You want to limit your tax liability. LLCs are taxed only at the level of the owner’s personal income. Instead, companies pay taxes twice: once on corporate income and again on personal income earned by owners or shareholders.
• You do not need to raise funds through share issuance. An LLC does not issue shares or have shareholders like a C corporation. While this limits your business’s ability to raise money from investors, it simplifies the ownership and profit structure of the business.

1. Name your Louisiana LLC

A business needs a name that is attractive and easy to remember. It is important to build brand recognition. Your LLC name also needs to follow three rules:

• Your name must be unique. The LLC name must be different from any existing business in Louisiana. You can run a search on the Secretary of State’s website to see if your preferred name is available.
• Your name must mention the entity type. The Louisiana LLC name must contain the words “limited liability company,” or its abbreviation (“LLC” or “LLC”).
• Your name cannot contain certain words. Your business name cannot contain words used to name a government agency, such as the FBI or the Treasury Department. Certain words are restricted based on proper licensing (ie, for legal counsel or credit unions).

2. Make a business plan

Every viable business is based on a comprehensive business plan. Your Louisiana LLC is no exception. A solid business plan includes the name of your LLC, a brief description of its function, a detailed market analysis, an outline of its organizational structure, a description of the product or service, a profile of target customers and a layout plan for marketing, logistics and finance.

3. Get a 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 through the US Internal Revenue Service (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 serve process on behalf of the business. A registered agent can be an individual (whether you, another member, or an employee), or an agency that offers registered agent services. In any case, your registered agent must:

• Residency in Louisiana. The agent or agency must have an address in this state.
• Always available. The agent or agencies must be on site and available to receive documents during normal business hours.

5. File your Louisiana Articles of Organization

With a name and registered agent, it’s time to register your Louisiana LLC with the Secretary of State’s office by filing your Articles of Organization. You can file this online or by mail for a $100 filing fee. Articles must contain the following information:

• The name of your LLC
• Purpose of your LLC
• Description of the LLC’s business according to the North American Industry Classification System (NAICS)
• Your LLC’s street address, as well as its mailing address, if it is different
• Name and address of each manager
• Name and address of your registered agent
• The name and address of anyone authorized to execute documents for the LLC
• EIN LLC
• Whether your LLC is member-managed (managed by ownership) or manager-managed (managed by someone hired by the LLC)
• How your LLC chooses to be taxed (either as a pass-through entity or an S corporation)
• Electronic signature of the member, manager or someone internally authorized to file the document

6. Get business licenses and permits

Louisiana’s primary state-level business permit is a sales tax certificate, also known as a seller’s permit. To qualify, you must be engaged in business in Louisiana with the intent to sell or lease goods or services that would normally be taxable if sold in a retail context. You can obtain a sales tax certificate online through the Louisiana Department of Revenue.

Counties and municipalities may have their own licensing requirements. For example, New Orleans requires all businesses to have an occupational or general business license. The state offers an online licensing checklist to 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 taxes, as well as self-employment, payroll and federal taxes. Profits are not taxed at the business level, such as a C corporation. Instead, members pay self-employment taxes on business profits and state and federal income taxes on any profits (minus allowances and deductions). The LLC also owes payroll taxes on the employee’s wages, and the employee, in turn, pays state and federal taxes on that income.

If your Louisiana LLC sells products or services, you may need to collect sales tax to send 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 that property, sales tax applies.) Louisiana’s sales tax is 4.45% in 2022. Louisiana also imposes a franchise tax on LLCs, which starts 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 the excess $200,000. However, the franchise tax only applies to Louisiana LLCs that elect to be taxed as an S corporation.

8. Prepare a Louisiana LLC operating agreement

An operating agreement is a legal document that outlines your LLC’s ownership, organizational structure, and operating procedures. A Louisiana LLC does not need to prepare or file an operating agreement with any government agency—but having one can be useful for administrative and goal-setting purposes. A strong operating agreement includes:

• How ownership rights are distributed among members
• Roles and responsibilities of members
• Procedures when a member wants to leave the LLC or when the LLC is terminated
• How you elect to be taxed as an LLC (either as a pass-through entity or an S corporation)
• Information on distribution of shares if your LLC elects to form as an S corporation

9. Check out business insurance options in Louisiana

Purchasing insurance for your Louisiana LLC is essential to managing risk. It can free your mind to focus on growing the business. Standard insurance plans for businesses in Louisiana include:

• Workers compensation insurance. Workers’ compensation coverage helps workers pay for medical expenses related to injuries or illnesses sustained on the job and helps supplement their income if they need time off work to recover. All employers in Louisiana are required to purchase this insurance. However, business owners, such as LLC members, can exempt themselves from purchasing workers’ compensation insurance if they own at least 10% of the company. Therefore, single-member LLCs are not required to purchase workers’ compensation insurance.
• Business owner insurance. Louisiana business owner policies cover property, income and general liability in one plan. It is not required by state law, although some commercial leases require it.
• Commercial flood insurance. Parts of Louisiana are prone to hurricanes and floods. Commercial flood insurance helps protect your LLC from costs associated with flood water damage.

10. Understand financial considerations

Aside from purchasing insurance, you may need additional investments to get your Louisiana LLC off the ground. This may include renting retail space, paying for a professionally designed website or social media management, or purchasing equipment and software. In addition to hiring employees, you may want to pay contractors and other professionals to support the business, such as lawyers and accountants. Resources are available to help you raise the startup funding you need.

11. Market your Louisiana LLC

With all your administration boxes checked, it’s time to get the word out about your new venture—and make it stand out from the competition. A solid marketing plan for your small business includes:

Frequently Asked Questions Starting an LLC in Louisiana

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

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 an agency with a principal business address in the state, available during normal business hours.

Do you need a registered agent in Louisiana?

Your LLC must appoint a registered agent in Louisiana—either an individual or an agency with a principal business address in the state, available during normal business hours.

How do state taxes work in Louisiana?

Louisiana LLC owners pay state income and sales taxes, as well as self-employment and payroll taxes.

source: https://www.shopify.co.id/blog/how-to-start-an-llc-in-louisiana