Louisiana’s small enterprises are its lifeblood. You may want to think about finding out how to become an LLC in Louisiana if you are launching a new company or operate a small business as a sole proprietorship in the state. By doing this, you may lessen your personal responsibility and help your small company become more credible.
It is essential that you adhere to all applicable legal processes while starting a company in the Pelican State. You’ll need to plan ahead, organize your files, and draft contracts for any partners you want to include. Use this step-by-step tutorial to learn how to form a Louisiana LLC.
The following actions must be taken in order to form an LLC in Louisiana:
1: Name Your Louisiana LLC
2: Get an EIN
3: Choose a Louisiana Registered Agent
4: Prepare and File Articles of Organization
5: Draft an Operating Agreement
Pros and Cons of Forming an LLC in Louisiana
Pros
- In Louisiana, creating an LLC offers limited liability protection, preventing personal assets from being used to pay off corporate obligations.
- LLCs in Louisiana benefit from pass-through taxes.
- LLCs are permitted to have a flexible management structure in Louisiana.
Cons
- Louisiana LLCs must submit an annual report and accompanying payment.
- LLCs are subject to a franchise tax in Louisiana, which is calculated by total assets.
Why Form a Louisiana LLC?
An LLC is a kind of adaptable corporate structure that lets its owner or owners reduce their financial, legal, and personal exposure without placing undue constraints on their business operations. Another excellent strategy for providing your small company with a solid platform for future development without requiring a significant time or financial commitment is to form an LLC.
You must familiarize yourself with Louisiana’s legal requirements if you want to create a new LLC or convert your sole proprietorship to an LLC. This tutorial will lead you through the procedure and point you in the direction of some other resources.
How to Get an LLC in Louisiana: The Basics
Although creating an LLC in Louisiana is not difficult, it is crucial to do it effectively. Errors, mistakes, and omissions might cause you to lose time and have your proposal rejected. These easy steps will assist to ensure that you do it correctly.
Step 1: Name Your Louisiana LLC
Every lawfully registered company operating in the state is included in a database kept up to date by the Secretary of State of Louisiana. A unique name for your LLC is required; it cannot be the same as the name of any other business organization that is registered with the state of Louisiana. Check the online business entity database maintained by the Secretary of State to ensure that the name you have selected is not already being used by another Louisianan company.
Every Louisiana LLC must have the words “limited liability company” or the letters “L.L.C.” or “L.C.” in its name. The terms “Low-Profit Limited Liability Company,” “L3C,” or “l3c” must appear in the titles of low-profit single member LLCs (a particular kind of nonprofit organization structured as an LLC in Louisiana).
After deciding on a name for your Louisiana LLC, submit a name reservation form (#398), which may be found in the form database maintained by the Secretary of State. For sixty days, this legal document protects your right to use that name, allowing you to finish the LLC registration process.
Numerous company creation services are available to aid in the process if you want assistance.
Inside Scoop: Plan ahead. Consider where else you may need to reserve your LLC name while you choose it and prepare to register it with the state. Select and protect your name on social media, get a domain name for your website, and decide whether you should additionally register a name that you want to use for “doing business as”—a term that is often less formal than the official LLC name.
Step 2. Get an EIN
Once you reserve a name for your LLC, it’s a good idea to register for a federal employment identification number (EIN). With an EIN, you may register your company with the Internal Revenue Service (IRS) as a distinct financial organization. This makes it possible for your LLC to pay workers, create credit lines, open bank accounts, pay employees, and handle other financial activities that aren’t related to the members’ personal money.
Inside Scoop: An EIN is required to utilize the Secretary of State’s geauxBIZ filing system, even though the State of Louisiana does not mandate it for all LLCs. Your options for establishing a Louisiana LLC will be limited if you do not have an EIN since many parishes in Louisiana require newly formed LLCs to submit their paperwork via this system.
Step 3: Select a Registered Agent in Louisiana
Choosing a registered agent is crucial while learning how to form an LLC in Louisiana. This entails designating a person or organization to conduct process service who has an actual street address inside the state. If the LLC is sued, its legal documents may be accepted on its behalf by your Louisiana registered agent.
Inside Scoop: For a fair price, a number of businesses provide expert registered agent services. For entrepreneurs that don’t maintain traditional 9 to 5 office hours, this may be of great assistance. These papers may be signed by a qualified registered agent, who can also notify you right away if there is an urgent need for action.
Step 4: Draft and submit the organization’s articles
Louisiana requires that you fill out and submit the articles of formation limited liability company form (#365), which you can get from the Secretary of State of Louisiana, in order to create an LLC.
The following parishes require you to register your articles of incorporation online if your company address is there:
- Elevation
- More assertive
- Caddo
- Calcasieu
- Baton Rouge’s East
- Jefferson
- Lafayette
- Livingston
- Orleans
- Ouachita
- Quickstrides
- Tammy
- Tangipahoa
- Terrebonne
You may choose to submit your articles of incorporation by mail, fax, or email if your LLC is not situated in one of these parishes. The articles of organization and the inaugural report signed by the registered agent must be notarized if you choose to submit physical copies instead of using the online filing method.
In any case, the following elements need to be included in your articles of organization:
- The LLC’s name
- The goal of the LLC (you may express a more particular aim, although a generic statement of “any lawful activity” is adequate)
- The length (perpetual or finite) of the LLC
- The signatory to the agreement
Additionally, your application must provide the following if you’re submitting your articles of organization online using the Secretary of State’s geauxBIZ system:
- Will the LLC file taxes as a corporation, partnership, or sole proprietorship?
- The LLC’s office’s street address (and postal address, if different)
- The registered agent(s) of the LLC’s name and address
- Whether manager-managed or member-managed, the LLC
- If the LLC is administered by managers, the names and street addresses of the managers (if managed by members)
- An electronic signature from the management, organizer, or member
- The major business activity of the LLC is described by the North American Industry Classification System (NAICS) together with the corresponding NAICS number.
- The federal EIN of the LLC
In case you submit a paper application, you need to submit an initial report form (#973) together with the articles of organization form. This form comprises the following:
- The street address of the LLC
- The registered agents of the LLC, together with their names and street locations
- The founding managers or members of the LLC, together with their names and street locations
- Each signer of the group’s articles of organization
- The registered agent of the LLC’s signature
After your articles of formation are approved by the Secretary of State, your Louisiana LLC is operational and prepared for business.
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Step 5. Draft an Operating Agreement
Even though it’s not required by law, creating an operating agreement is a crucial step in understanding how to form a Louisiana LLC, particularly if your company will have many members. Each manager’s and member’s rights, ownership interests, and obligations to the company are outlined in the operating agreement. It may cover the management and operation of the LLC. By doing this, disputes or legal actions amongst the members may be avoided.
An operating agreement functions much like a contract between you and the LLC’s other members. This legal document may be usefully compared to a commercial operating plan. You should include rules and procedures that regulate your LLC in the case of disputes or poor management in addition to outlining how day-to-day activities should be carried out.
An operating agreement may aid in establishing your LLC as a distinct legal company, even if you are the only member. This may increase its legitimacy as a company and lessen the possibility that you’ll be held personally liable for any of its debts.
How Much It Costs to Form an LLC in Louisiana
Compared to other states, the charges for entrepreneurs wishing to incorporate an LLC in Louisiana are low. To register an LLC with the Secretary of State’s office, there is a $100 initial filing cost. Additionally, a $25 yearly report fee has to be paid each year. Additionally, companies have to pay a fee—which varies according on the newspaper—to have their articles of organization published in their local newspaper.
Obtaining licenses and permissions, which vary depending on the business and area, and registered agent fees, which often range from $100 to $300 annually, are additional expenses for forming an LLC in Louisiana. In the Pelican State, small company entrepreneurs should budget between $500 and $1,000 for all fees and expenses associated with forming an LLC.
submitting license applications, yearly report filings, and tax payments
Establishing a company in Louisiana requires more than just learning how to form an LLC. Verify if state and local regulations in Louisiana need you to get a business license before starting any kind of company. Before you start conducting business in Louisiana, be sure you are aware of the licenses that could be needed for your LLC’s activities.
Your LLC will be in charge of submitting an annual report and paying an annual registration fee to the Secretary of State once it is operating. It must also pay the Louisiana Department of Revenue all relevant taxes, such as payroll taxes and sales and use taxes.
LLCs for Artists and Musicians
Artists, bands, and musicians in Louisiana should think about becoming an LLC. You may open a bank account and take payments in the name of the band after establishing an LLC and EIN. When you need money to record an album or buy equipment, you may also apply for credit, loans, and financing.
Every band member is shielded from personal responsibility by an LLC. This indicates that the members’ homes, cars, and other belongings are safe from legal action if it is brought against the band. The following circumstances might result in legal exposure:
- After suffering injuries during a performance, a patron sues the promoter, the artists, and the venue.
- A copyright infringement lawsuit is filed by a composer or other artist who believes the band has inappropriately used their creative work output.
- A musician performing in a studio or live setting files a lawsuit alleging unfair remuneration and requests payment for any owed royalties.
- Someone files a suit against one or more band members alleging violence, property damage, or bodily harm.
By forming an LLC, your band may agree to conditions that deviate considerably from the default regulations that would otherwise be enforced by Louisiana law. The assets that each member has contributed, the distribution of revenue and profits, and the assignment of collective debt among members may all be recorded in your operating agreement. Particularly when emotions are high, formalizing your working relationship and removing any doubt regarding the band’s money may greatly lessen arguments and animosity.
Learn how to form an LLC in Louisiana to safeguard your family and property if you work in the state’s booming music industry. Additionally, an LLC facilitates booking engagements, getting paid, and distributing revenues while also assisting with reputation building.
Inside Information: It isn’t sufficient to safeguard the name you operate under just because someone else can’t register in Louisiana with the same name as your LLC. You may apply for trademark protection to ensure that no one else can use your original band or group name. This government accreditation will safeguard your brand throughout the United States.
Find Out More About Establishing a Louisiana LLC
Do you have any further questions regarding why LLCs are a fantastic option for all types of small companies or how to form one in Louisiana? To assist you expedite the LLC process, find additional how-to guides, links, pricing schedules, and other useful information.
Legal Notice: Nothing in this article should be construed as establishing an attorney-client relationship. Although it offers basic legal information, it does not represent expert legal advice for your specific case. You should consult an attorney licensed in your area if you have any legal issues.
The Bottom Line: Forming an LLC in Louisiana
In Louisiana, forming an LLC just takes a few simple steps and is a reasonably simple procedure. Louisiana is a fantastic location to incorporate an LLC since the state offers a wealth of tools, including template forms and step-by-step guidelines, to make the legal process simpler. Examining top LLC formation services may also help to expedite the procedure.
Frequently Asked Questions: Louisiana LLC Formation
What does LLC stand for?
LLC stands for “limited liability company.” LLCs are relatively easy to form compared to corporations, but have the same legal protections afforded to corporation owners. Many sole proprietorship or partnership owners choose to convert to an LLC so their personal assets are protected.
Do I need to pay LLC taxes in Louisiana?
Yes, LLCs in Louisiana are subject to certain taxes and fees. Here are some of the key taxes and fees that may apply to an LLC in Louisiana:
- Annual Report Fee: Louisiana requires LLCs to file an annual report and pay a fee to maintain their good standing. The fee varies depending on the value of the company’s authorized capital.
- Franchise Tax: Louisiana imposes a franchise tax on LLCs, which is based on the total value of the LLC’s property, assets, and outstanding liabilities. The franchise tax rate can vary and is applied to the LLC’s net worth.
- State Income Tax: LLCs in Louisiana may also be subject to state income tax. While LLCs themselves are not taxed at the entity level for income tax purposes, the income and losses of the LLC are passed through to the individual members, who report them on their personal income tax returns.
How quickly can I get an LLC in Louisiana?
The speed at which you can get an LLC in Louisiana can vary depending on several factors, including the method you choose for filing and the current processing times of the Louisiana Secretary of State’s office.
