How to Start an LLC in Louisiana – The Process, Paperwork, and Costs Involved
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An LLC, or limited liability company, is a business structure that can combine the best features of a corporation and a partnership. 3 min read
An LLC, or limited liability company, is a business structure that can combine the best features of a corporation and a partnership. Like corporations, LLCs offer limited liability protection to their owners. And like partnerships, they tend to have less formalities and regulations than corporations. For these reasons, many small businesses choose to form as LLCs.
If you’re thinking of starting an LLC in Louisiana, there are a few things you should know. Below, we’ve outlined the steps you need to take to get your business up and running.
The Basics of an LLC
LLCs are a type of business entity in the US. They are created when the Articles of Incorporation or Organization are filed with the state. An LLC can be formed by one or more persons. This section will cover the basics of starting an LLC in Louisiana.
What is an LLC?
A Louisiana limited liability company (LLC) is a business entity created by one or more persons for the purpose of operating a business in Louisiana. LLCs are formed pursuant to the Louisiana Limited Liability Company Act, which is codified in Title 6, Chapter 35 of the Louisiana Revised Statutes.
To form an LLC in Louisiana, you must file Articles of Organization with the Louisiana Secretary of State. The Articles of Organization must include:
-The LLC’s name and address
-The LLC’s purpose
-The name and address of the LLC’s registered agent
-The name and address of each member of the LLC
-The date on which the Articles of Organization were signed
Once your LLC is formed, you must file an Annual Report with the Secretary of State each year. The Annual Report is due on May 1st and must include:
-The name and address of the LLC
-The names and addresses of each member of the LLC
-The name and address of the registered agent
Why Form an LLC?
There are several reasons to form an LLC in Louisiana, including personal asset protection and tax benefits. An LLC is a business structure that offers personal liability protection and pass-through taxation. This means that the business itself is not taxed, but the owners are taxed on their share of the profits.
An LLC is not required to have as many formalities as a corporation, which makes it a less expensive and less time-consuming option for many small businesses. In Louisiana, LLCs are formed by filing articles of organization with the Secretary of State.
An LLC can have one or more members, who can be individuals, other businesses, or trusts. The multi-member LLC offers more flexibility in how the profits and losses are distributed among the members.
If you are thinking about starting an LLC in Louisiana, there are a few things you should keep in mind. First, you will need to choose a name for your LLC and register it with the Secretary of State. You will also need to create an operating agreement, which outlines the roles and responsibilities of each member as well as how the profits and losses will be distributed. Finally, you will need to obtain any necessary licenses and permits from the state.
The Advantages of an LLC
An LLC is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. An LLC is not a corporation, however, and it is not subject to corporate income tax.
LLCs offer several advantages over other business structures. They are less expensive and easier to form than a corporation, and they offer the same limited liability protection. In addition, LLCs can choose how they want to be taxed—either as an S corporation, a partnership, or a sole proprietorship.
One of the main advantages of an LLC is that it shields its owners from personal liability for business debts and claims. This means that if your LLC is sued or can’t pay its debts, your personal assets are protected. The only exception to this rule is if you have personally guaranteed a debt or have engaged in fraud or other illegal activities.
Another advantage of an LLC is that it offers flexibility in how the business is structured and operated. Unlike a corporation, which must have a board of directors and hold shareholder meetings, an LLC can be run more informally. And unlike partnerships, LLCs don’t require each member to take an active role in running the business.
If you’re thinking about starting an LLC, here are some things to keep in mind:
-An LLC can have one or more members. There is no limit on the number of members an LLC can have.
-An LLC can be formed by filing articles of organization with the secretary of state in the state where the LLC will do business. You will also need to file annual reports and pay annual fees in most states.
-An operating agreement—a document specifying the rights and duties of the members—is not required in all states but is generally considered a good idea for any multi-member LLC
The Disadvantages of an LLC
An LLC, or limited liability company, is a business structure that offers protection for its owners from certain types of legal liability. However, there are also some disadvantages to forming an LLC. These disadvantages include:
1. Owners of an LLC are still personally liable for their own actions. If you are sued in connection with your LLC business, your personal assets could be at risk.
2. An LLC can be more expensive to set up and maintain than other types of businesses, such as a sole proprietorship or partnership. You will need to file paperwork with your state and pay annual fees, and you may need to hire an attorney to help you set up your LLC properly.
3. An LLC is not recognized in all states. If you plan to do business in multiple states, you will need to set up an LLC in each state where you do business. This can be time-consuming and expensive.
4. Banks may be reluctant to lend money to an LLC because the owners’ personal assets are not at risk if the business fails.
5. Venture capitalists and other investors may be hesitant to invest in an LLC because of the limited liability protection offered to the owners.
How to Start an LLC in Louisiana
If you are looking to establish your business as a limited liability company (LLC) in the state of Louisiana, there are a few things you need to do. First, you will need to choose a name for your LLC and file it with the Louisiana Secretary of State. You will also need to file articles of organization, which you can do online. After your LLC is officially registered, you will need to obtain an Employer Identification Number (EIN) from the IRS. Lastly, you will need to create operating agreements and file them with the state.
Step One: Choose a Name for Your LLC
Your LLC’s name must include the phrase “Limited Liability Company” or one of its abbreviations (LLC or L.L.C.). It can not include words that would confuse it with a government agency (FBI, Treasury, State Department, etc.), nor can it imply a purpose that it does not have (“Banking”, “University”, “Hospital”).
Step Two: Register Your LLC’s Name
You will need to register your LLC’s name with the Louisiana Secretary of State.
Step Three: Appoint a Registered Agent
Every Louisiana LLC must have a registered agent. A registered agent is an individual or business entity who agrees to accept service of process on behalf of your LLC in the event that it is sued. The registered agent must have a physical street address in Louisiana and be available during normal business hours.
Step Four: File Articles of Organization
To form an LLC in Louisiana, you must file articles of organization with the Louisiana Secretary of State. The articles must include the following information:
-The LLC’s name and address
-The name and address of the LLC’s registered agent
-The date on which the LLC will dissolve, if applicable
-Whether the LLC will be managed by members or managers
-The names and addresses of the persons organizing the LLC
Step Two: File the Articles of Organization
The Articles of Organization, also known as the Certificate of Formation, is the document that formally creates your LLC.
You must file your Articles of Organization with the Louisiana Secretary of State. The state provides an online filing system that you can use to file your Articles of Organization.
The filing fee is $100. You can pay by credit card, check, or money order.
You will need to provide the following information when you file your Articles of Organization:
-The name of your LLC and the date it will begin operating
-The names and addresses of your LLC’s organizers
-The purpose of your LLC
-The address of your LLC’s principal office
-The name and address of your LLC’s registered agent
Step Three: Create an Operating Agreement
The next step in starting your Louisiana LLC is creating an Operating Agreement. This document outlines the ownership and management structure of your business, as well as the rules and regulations that will govern your company.
While an Operating Agreement is not required by Louisiana law, it is highly recommended—in fact, most banks will require one before they will open a business account for your LLC. Additionally, having this document in place will help you avoid disputes amongst members down the road.
If you do choose to create an Operating Agreement, there are a few key topics you will need to address:
-Who are the members of the LLC?
-How are decisions made?
-What are the roles and responsibilities of each member?
-How are profits and losses distributed?
-What happens if a member wants to leave the LLC?
Step Four: Get an Employer Identification Number (EIN)
You will need an Employer Identification Number (EIN) to open a business bank account and conduct business with the state of Louisiana.
The EIN is a nine-digit number that the IRS assigns to businesses. You can apply for an EIN online, by fax, or by mail.
To apply online, you will need to have a Social Security Number or Individual Taxpayer Identification Number. The online application takes about five minutes to complete.
To apply by fax, you will need to fill out Form SS-4 and fax it to the IRS at (855) 641-6935.
To apply by mail, you will need to fill out Form SS-4 and send it to the address listed on the form.
Once you have your EIN, you will need to open a business bank account. A business bank account is a separate account from your personal account and is used to track your business’s income and expenses.
Step Five: Comply with Other Tax and Regulatory Requirements
Your LLC must comply with all tax and regulatory requirements imposed by the state of Louisiana. These requirements include, but are not limited to, obtaining the following licenses and permits:
-Sales tax permit
-Employer identification number (EIN)
In addition, your LLC will be required to file an annual report with the Louisiana Secretary of State.
Step Six: Register Your LLC
You are now ready to register your LLC with the Louisiana Secretary of State. You can do this online, by mail, or in person.
To register online, go to the Louisiana Business Services Division website and fill out the requisite forms. You will need to provide your LLC’s name, registered agent information, and filing fee payment.
To register by mail, download the Articles of Organization form from the Louisiana Secretary of State website. Fill out the form and mail it, along with the filing fee, to:
Louisiana Secretary of State
P.O. Box 94125
Baton Rouge, LA 70804-9125
To register in person, take the completed Articles of Organization form and filing fee to:
Lousiana Secretary of State’s Office 820 North 3rd Street Baton Rouge, LA 70802 Monday-Friday 8:30am – 4:30pm
There you have it! You now know how to start an LLC in Louisiana. Be sure to follow all the steps we outlined in this article, and you’ll be well on your way to successfully starting your own LLC. Good luck!
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