Fact checked for accuracy by Billie Anne Grigg, a bookkeeper and Mastery Level Certified Profit First Professional.
Deciding to open a business or company is a big decision, and the steps required to open one might seem complicated at first. Sometimes the process might deter people from pursuing their business in the first place due to the confusion.
Once you understand the process thoroughly, opening your business will be less nerve-wracking. Breaking the process down step-by-step will help you comprehend everything and prepare you for what lies ahead. The following steps apply to Louisiana’s process of forming an LLC.
Step 1: Choose Your Company’s Name
Creating a unique name is the first step to a successful business. Brainstorm and make sure it is a name you are happy with, as rebranding is expensive and complicated. Naming requirements differ by each state.
LLC Naming Guidelines in Louisiana include the following:
- The name cannot include any words that imply that the business is for purposes not lawful for a limited liability company.
- It cannot include “doing business as” or the abbreviation “d/b/a.”
- The name needs to be distinguishable from other business and company names within the state or registered with the state.
- It cannot imply that the business is an administrative agency of Louisiana or the United States.
- The name cannot include words or phrases that comprise immoral, deceptive, or scandalous matters.
Once you pick your name, you need to make sure that no one has that business name already and reserve it. Use the Search for Louisiana Business Filings to see if the name is available. If the name is available, fill out a name reservation form to reserve it so nobody else in the state can use it. The filing fee is $25.
Step 2: Find a Registered Agent
Louisiana requires that you select a registered agent for your LLC. This agent will handle legal documents and accept service of process on your business’s behalf.
Your registered agent must be a residing citizen or company in Louisiana or an individual or company that has the authorization to operate and conduct business in the state of Louisiana. We recommend Northwest Registered Agent, ZenBusiness, and Incfile as some of our top choices. Prices range but can be as low as $50 a year. Head over to our best LLC services breakdown for more information on these companies and others.
Step 3: File Articles of Organization
Your next step is to file Articles of Organization for limited liability companies with Louisiana’s Secretary of State. These documents contain all of the essential details of your business. Once approved, the documents will certify that your business is registered in the state of Louisiana. The filing fee is $100.
You need to provide the following information on your Articles of Organization:
- The name of your LLC
- The LLC’s purpose
- The LLC’s address
- The duration of the LLC
Depending on the county or parish where your business resides, the Louisiana Secretary of State may require you to file these documents online. The parishes that are required to file online include:
- East Baton Rouge
- St. Tammany
Other parishes have the option to file through both mail or online. You need to include an Initial Report as well. The Initial Report includes information such as the address of the LLC, the name and address of your registered agent, the name and addresses of your members, and signatures. You will also need your registered agent to sign an affidavit on this document.
Step 4: Create an Operating Agreement
Louisiana does not require operating agreements, but it is helpful. An operating agreement is a document containing your business structure plan. It should include your members’ responsibilities and details on how your business will run. This is not something that you need to file with the government. It is something for you to keep on file for yourself.
Although an operating agreement is not mandatory in Louisiana, having one will help you:
- Open a business bank account (operating agreements are a requirement for this)
- Emphasize your limited liability status
- Prevent confusion and misunderstandings
- Override default laws, allowing you more control over your LLC
There is no fee to create an operating agreement.
Step 5: Get an Employer Identification Number (EIN) From the IRS
Employer Identification Numbers (EIN) are a requirement for LLCs that will hire employees. You can obtain an Employer Identification Number from the International Revenue Service (IRS). An EIN is similar to a social security number (SSN), except it is to identify your business rather than a person. You will need an EIN to pay taxes, file tax returns, open business bank accounts, hire employees, and complete other important business tasks.
If your LLC is a sole-proprietor business, you may not need an EIN and can use your SSN. Use this EIN checklist from the IRS if you are unsure if your LLC needs an EIN. You can still acquire an EIN even if your LLC does not need one. Some LLC owners do not like using their SSN on documents, so they choose to get an EIN.
Step 6: File With the Louisiana Workforce Commission
If you have employees or plan to have employees, you need to fill out an employer application for unemployment insurance tax. You can do this through the Louisiana Workforce Commission. The application will help determine if you are liable or not to pay unemployment insurance tax.
Step 7: Meet Any Other Legal Requirements
Register your LLC with the Louisiana Department of Revenue. You need to do this to make sure your business complies with tax requirements in the state of Louisiana.
Another thing you should do is check which licenses and permits you may need to open your LLC. The licenses and permits you need depend on the type of business you are forming. The U.S. Small Business Association offers a list of possible federal licenses and permits that you might need.
Use the Louisiana Secretary of State website for information on state licenses and permits. You should contact the county or parish where your business resides for information on local licenses and permits. They will help you determine which permits you need.
Make sure you file your annual reports for your LLC. Filing annual reports is a part of the maintenance of your LLC. You need to do this every year with the Secretary of State of Louisiana by the anniversary of your LLC’s organization. You can file your annual report online or in paper form. The fee is $30.
Cost to Start an LLC in Louisiana
The basic cost to start an LLC in Louisiana begins at $125. The Articles of Organization are $100, and the name reservation is $25. This is the minimum that you need to pay. Your registered agent ($50+) and annual reports ($30) will be recurring payments. If you need to pay for licenses and permits, your starting cost will be higher.
What to Do After Forming Your LLC in Louisiana
After forming your LLC, there are some things you should do to get ready before your business officially opens.
Open a Business Bank Account
The first thing you should do once all of your legal documents are taken care of is create a business bank account. Always keep your business finances separate from your personal finances. Try to find a bank that offers low or no fees, so you are not losing tons of money. Business savings accounts are also a good idea to have.
Open a Business Credit Card
Business credit cards are perfect for large expenses. If you choose the right one, you may also receive cashback or rewards. This will save you money over time.
Hire an Accountant or Set Up Accounting Software
Finances are overwhelming, especially when you first open your LLC. It is best to hire an accountant or use accounting software to help you. Either option will help keep track of your business accounts and make the tax process less daunting.
Think About Business Insurance
Business insurance protects you from accidents, natural disasters, lawsuits, and other potential business losses. Without business insurance, unexpected problems like these can cost you everything.
Trademark Your Company Name
Trademarking gives you exclusive rights to your business’s name, logo, or slogan and will prevent other businesses from using them. There are fees to pay for this, and they range in price. Expect to spend at least a couple hundred dollars. Trademarking is not required, but it is a good idea.
You need to start getting your LLC’s name out into the world. Designing or hiring someone to design a logo for you is the first step. Using the logo on all marketing and communication materials will help establish your brand. Create business cards with the logo and hand them out to people or put them on community bulletin boards. This will help you network.
Making a website will also help you connect with more people and find more potential customers. Include important information such as the address, business hours, social media, and products on your website. This will help people know what your LLC is and where to find it.
How to Keep Your LLC Compliant in Louisiana
Acquire all the essential licenses and permits needed to run your LLC in Louisiana, pay all filing fees, and file your business’s tax forms and annual reports. Another thing to do is to keep all of your legal documents updated. Doing these things will keep your LLC compliant in Louisiana.
If you would like, you can order a certificate of good standing. These certificates confirm that you have filed all the correct documents and paid all fees with the Secretary of State. The certificate proves that your LLC exists and is allowed to conduct business in Louisiana due to being compliant.
Tax Filing Requirements for LLCs in Louisiana
Filing taxes is one of the most important things to do to stay compliant with the state of Louisiana. Taxes for LLCs run a little differently compared to other business types. LLCs in Louisiana may be required to file the following taxes:
- Self-employment tax
- State income tax
- Federal income tax
- Payroll tax (if you have employees), including unemployment insurance tax (if applicable)
- Sales tax (if applicable)
- Franchise or privilege tax
- Employees need to pay state and federal income tax on their earnings
Frequently Asked Questions
Some questions you might have while going through the process of forming your LLC are answered below.
How long does it take to register an LLC in Louisiana?
It typically takes a few business days but can take up to a few weeks. It depends on how busy the inflow of LLC registrations is. If you want your approval sooner, you can pay extra for quicker processing fees. You can pay $30 for 24-hour processing or $50 for 2-4 hour processing. These processing options are typically at the top of all the documents.
What tax structure should I choose for an LLC in Louisiana?
The IRS treats LLCs as disregarded entities (LLCs with a single member), partnerships, or corporations. An LLC with at least two members will be within the partnership category unless otherwise stated on Form 8832. If you want a disregarded entity treated differently, use Form 8832 as well. This form tells the IRS that you are deciding to change your business structure. Most LLCs use the partnership tax structure.
Should you hire an LLC formation service in Louisiana?
Forming your LLC on your own is possible, but using an LLC formation service can make the process much easier. The beginning stages of forming your LLC may be overwhelming, but formation services can help by taking care of all the organizing and document filing for you. Most formation services also offer registered agents.
Using an LLC formation service will ensure that your documents are completed and filed correctly and that your LLC is set up correctly. These services speed up the process of LLC formation. You should hire an LLC formation service to help guide you and ensure that your LLC is on the right track in the formation stage.