How to Start an LLC in Louisiana: What You Actually Need to Know

Louisiana has become an increasingly attractive state for entrepreneurs: its robust energy, hospitality, and healthcare industries, and the fact that the cost of doing business is lower than in coastal states.

However, there are some peculiarities about forming an LLC here that can catch people off guard. This guide takes you through the process step-by-step and provides the practical detail that will help you get moving.

Why an LLC Makes Sense for Louisiana Business Owners

It's important to first learn what you're purchasing before you get into the specifics.

An LLC is a legal structure that protects your assets from your business. This means that if a client sues your business or a vendor brings a claim against you, you will most likely be covered, protecting your personal savings, home, and car. If you don't have that in place, it's your personal responsibility.

In addition to protection, an LLC provides you with:

• By default, an LLC is a pass-through entity, and profits are taxed on your personal tax return, not on the LLC level.

• This business structure doesn't require a board of directors or regular meetings, as corporations do.

• Your LLC name helps establish credibility with clients and banks; sign contracts and open business bank accounts in your LLC name.

For example, a contractor that creates their business under an LLC will likely have an easier time acquiring larger clients that need proof of a registered business entity before they sign contracts.

Step 1: Name Your Louisiana LLC

Your LLC name must be distinguishable from other businesses registered in the state of Louisiana and include "Limited Liability Company," "LLC," or "L.L.C.

Search the Louisiana Secretary of State's business name database to check availability before settling on a name. You should also try to do domain availability checks at the same time; even if it's not something you're interested in for your business website, you'll want to get your brand name on the internet before it becomes full!

Step 2: Appoint a Registered Agent

Louisiana mandates that all LLCs appoint a registered agent to receive legal correspondence, lawsuits, and state correspondence for the business.

Your registered agent is required to have a valid mailing address in Louisiana (not a P.O. box) and be able to be reached during business hours.

One option is to be your own agent, but your agent's address is on the public record. If you have a job from home, that is your home address becomes part of the public record. For that reason alone, many business owners hire a professional registered agent service; not to mention the peace of mind that important legal papers won't be lost while they're traveling or otherwise too busy running the business.

Step 3: File Your Articles of Organization

The document that actually forms your LLC in Louisiana. File it with the Louisiana Secretary of State online or by mail. 

The standard fee is **$100. Filing online is generally processed quicker and sometimes in a few business days.

You will need to give:

• Business name and principal address of LLC.

• Your registered agent's name and address

After being approved, keep a certified copy. It is necessary to open a business bank account and for other official reasons in the future.

Step 4: Draft an Operating Agreement

Unlike the state of Louisiana, there's no legal requirement for an operating agreement, yet it is one of those documents you'll need to be glad you have if things go awry.

This document explains how your LLC is run inside: how decisions are made, how profits are split, what happens if a member leaves, and the way disputes are resolved. If you don't, your company will be subject to the LLC laws that apply to all of Louisiana. If you don't, your company will be subject to the default LLC law in Louisiana, which might not be the law you and your co-founders agreed upon.

If you are only one partner, an operating agreement can help make the legal distinction between you and your business, which is important if you are ever audited or sued.

Step 5: Get Your EIN and Sort Out Payroll Taxes

Once your LLC is approved, apply for an Employer Identification Number (EIN) through the IRS website; it's free and usually takes about 10 minutes to complete online.

An EIN will be required for opening a business bank account, hiring employees, and federal taxes.

When you're hiring employees, payroll tax services are almost a necessity from the get-go. Louisiana employers withhold federal and state income taxes, Social Security, Medicare, and Louisiana unemployment taxes, and the filing deadlines are stringent. Penalties for missed payroll tax deposits rapidly mount.

This is a complexity small business owners do not understand. Hiring a payroll tax professional from the beginning will help you avoid costly errors and stay compliant as you expand.

Let Someone Handle the Heavy Lifting

Starting an LLC isn't difficult, but missing a filing, choosing the wrong registered agent, or overlooking payroll tax obligations can create expensive problems later. If you'd rather focus on running your business, Revive Business can handle the formation process from start to finish.

Frequently Asked Questions

How long does it take to get an LLC in Louisiana?

Processing of online filings is usually within 3-5 business days. For an extra cost, the state of Louisiana also provides expedited processing.

Do I need a physical Louisiana address to form an LLC there?

Must not be a resident of Louisiana, but must have an address in Louisiana in the agent's registration.

What is the difference between member-managed and manager-managed?

A member managed implies the owners conduct day-to-day activities. Manager-managed – you designate a manager, either or not he or she is a member, to run the operation. Member-managed is typically easier for businesses that are actively run by their members.

When do I need to start collecting Louisiana sales tax?

The Louisiana Department of Revenue requires LLCs to register before their first sale if they are selling taxable goods or services in Louisiana. This can vary according to the industry, so it is good to establish your own requirements as early as possible.