For individuals and entrepreneurs looking to establish a foothold in the business world, Louisiana offers a strategic and supportive environment for new Limited Liability Companies (LLCs). The state has embraced modern technology, enabling potential business owners to initiate the incorporation process online, eliminating lengthy paperwork, and expediting approvals. 

The state’s Small and Emerging Business Development (SEBD) program aids entrepreneurs in enhancing both their managerial and technical proficiencies. This often involves engaging consultants to assist businesses in navigating growth challenges. Small businesses are a cornerstone of the state’s economy, with 457,636 making up 99.5% of all business entities. These small establishments employ over 905,000 individuals, comprising 53.6% of the state’s workforce. Additionally, every new Louisiana LLC must appoint a registered agent accessible during standard business hours and has a physical presence in the state.

By incorporating your LLC in Louisiana, you’re not just selecting a state but choosing a partner dedicated to your business’s growth and success.

Louisiana LLC taxation

An LLC in Louisiana can be taxed either as a corporation or adopt the pass-through taxation typical of sole proprietorships, partnerships, and S Corporations. Furthermore, the allocation of profits and losses in an LLC doesn’t necessarily align with the members’ ownership percentages. Though there are similarities between a Louisiana LLC and a Louisiana S Corporation, the LLC offers greater flexibility and is simpler to manage than a corporation.

Why form a Louisiana LLC?

A Louisiana LLC presents a clear advantage due to its flexibility and straightforwardness for individuals seeking the limited liability a corporation provides without its formalities and ongoing intricate requirements. However, a Louisiana S Corporation does bring the benefit of enabling owners to reduce self-employment taxes.

To assist in forming your Louisiana LLC, reach out to MaxFilings. Begin your LLC setup process today.

Some points to consider when forming a Louisiana LLC

• To establish a Louisiana LLC, you must submit the necessary paperwork to the state and pay the associated filing fees.
• Legally, a Louisiana LLC is viewed as separate from its members and managers.
• A Louisiana LLC is typically permitted to engage in legal business activities.
• Compared to corporations, Louisiana LLCs have fewer mandatory reports and reduced paperwork requirements.

Limited liability

• Members and managers of a Louisiana LLC typically receive the same limited liability as shareholders, directors, and officers of corporations, risking only their investment in the LLC.
• One of the significant benefits of a Louisiana LLC is the protection of members’ personal assets.
• Similar to corporations, there are circumstances in which the limited liability of an LLC’s members and managers can be challenged.

Taxation

• An LLC in Louisiana can opt for taxation as a corporation or select the pass-through tax model typical of sole proprietorships, partnerships, and S Corporations.

Members & employees

• In a Louisiana LLC, members can be categorized into multiple classes, independent of their capital input, with each class having distinct voting rights, profit shares, loss allocations, and distribution entitlements.
• Employees often prefer associating with an LLC over a sole proprietorship or partnership.
• A Louisiana LLC’s management can either be member-driven or overseen by designated managers.
• There’s no cap on a Louisiana LLC’s number of members.
• Corporations, partnerships, and trusts are eligible to be members of a Louisiana LLC.

Public perception

• The general public perceives LLCs as more established and significant than sole proprietorships and partnerships.

How to form a Lousiana LLC

Select an LLC name

• The name should include “limited liability company,” “LLC,” “LC,” “Low-Profit Limited Liability Company,” “L3C”, or “l3c” as stipulated by Louisiana law.
• It should be unique from other businesses in the Louisiana Secretary of State’s database. You can check name availability online.
• Reserve your name for up to 60 days using Form #398 if desired.

Consider a trade name

• You aren’t restricted to using your official LLC name for business operations. Instead, you can use a trade name or DBA (doing business as).
• Register this name with the Louisiana Secretary of State using Form #309. Note: Online registration is mandatory for LLCs in certain parishes.

Appoint a registered agent

• All LLCs in Louisiana need a registered agent who accepts legal documents on behalf of the LLC.
• This agent can be a Louisiana resident, a local attorney, a partnership, or a corporation authorized for this role. The agent must have a physical address in the state.

Submit the articles of organization

• File the Articles of Organization Limited Liability Company (Form #365) with the Louisiana Secretary of State.
• Note the required elements if filing online or via paper, as they differ.
• Paper filings should complement the Initial Report (Form #973).

Draft an operating agreement

• Although not mandatory in Louisiana, it’s recommended to have an operating agreement that details how your LLC functions and the rights/responsibilities of its members.

Acquire an EIN

• LLCs with multiple members need an Employer Identification Number (EIN) from the IRS, even without employees. Single-member LLCs also need an EIN if they have employees or choose to be taxed differently.
• You can apply for an EIN online on the IRS website for free.

Stay compliant with annual reports

• Every LLC in Louisiana should submit an annual report online to the Secretary of State each year on or before their anniversary of establishment.