With its rich history and diverse communities, Louisiana is a place where dreams can take root and flourish. If you’re passionate about making a difference, there has never been a better time to get started. With the convenience and efficiency of online incorporation, turning your noble aspirations into a structured legal entity is just a click away. 

In Louisiana, nonprofits make about $25 billion every year. Healthcare groups are significant, but many earn less than $500,000 annually. Nonprofits also offer many jobs, making up 8% of the state’s employment. Most of these workers, about 73.4%, are in health care and social help. When discussing pay, many nonprofit workers earn the same or even more than regular businesses, especially in office support, waste management, education, and health care.

Benefits of incorporating a nonprofit in Louisiana

There are multiple compelling reasons to consider setting up a nonprofit corporation. Let’s delve into seven essential benefits that such a structure can offer.

Protection of personal assets

One of the core attractions of incorporating a nonprofit is the safeguard it offers to your personal assets, often referred to as the ‘corporate shield.’ In practical terms, if your nonprofit faces legal challenges or can’t meet its financial commitments, your personal property remains untouched. 

Many mistakenly believe mission-driven nonprofits don’t require this protection as much as commercial entities. However, nonprofits can accumulate debts like any other organization and face litigation. While incorporating doesn’t erase these risks, it ensures your assets remain protected from potential fallout.

Tax-exemptions

It’s essential to understand that nonprofits don’t automatically enjoy tax exemptions. To achieve this status, you must apply with the IRS and, typically, a similar one at the state level. Although both incorporated and unincorporated entities can pursue tax-exempt status, the process is often smoother for incorporated organizations due to stricter state oversight and the opportunity to embed necessary clauses in your incorporation documents. It’s advisable to familiarize yourself with the IRS’s guidelines on exemptions.

Opportunities for grants

Acquiring incorporated status, coupled with 501(c)(3) tax exemption, significantly widens the pool of grants available to your organization. Incorporation can lend credibility, enhancing your grant application’s appeal. Moreover, specific grants are reserved exclusively for incorporated nonprofits. Grants are non-repayable, offering you a substantial financial boost without the burden of repayment.

Employee incentives

As an incorporated nonprofit, you can provide your employees with various benefits, from health insurance to pension plans. Such benefits can be instrumental in attracting and retaining a dedicated workforce aligned with your mission.

Facilitated fundraising

An incorporated nonprofit is often viewed as more credible and reliable, making fundraising efforts more effective. If you also have tax-exempt status, donations to your nonprofit are not subjected to taxation, making it even more appealing for potential donors who can capitalize on tax deductions.

Continuous existence

Incorporation ensures that your nonprofit’s mission and operations are not solely tied to its founders or current leaders. The organization can continue its journey even if pivotal figures depart or are no longer around. This longevity is facilitated by the corporate structure, allowing seamless transition and succession.

Structured governance

Incorporating your nonprofit introduces a more defined operational hierarchy, with a board of directors steering major decisions and officers overseeing daily operations. While this might sound bureaucratic, it ensures continuity and stability. Having a formal structure not only aids in decision-making but also fosters accountability and efficiency, enhancing the overall impact of the nonprofit.

Louisiana nonprofit structure

Directors

• Number of directors: Louisiana law stipulates that a nonprofit must have a minimum of three directors. However, there is an exception. If a nonprofit has fewer than three members, the number of directors must be equal to that number of members.
• Qualifications: To be a director, the individual must be a natural person. Louisiana does not enforce a residency requirement, nor does it mandate that a director be a nonprofit member.
• Term duration: A director’s term is set for one year by default. However, this can be extended, but it shouldn’t exceed a five-year tenure.
• Decision-making quorum: Most directors must be present to make a decision.
• Committee formation: At least two directors should be present for any committee in the organization.

Officers

• Types of officers: Every Louisiana nonprofit must appoint a president, a secretary, and a treasurer. The organization can also choose to have one or multiple vice presidents.
• Directorship: An officer doesn’t need to be a nonprofit director.
• Corporation as treasurer: Unique to Louisiana, a nonprofit’s treasurer can be a corporation.
• Holding multiple offices: Louisiana permits an individual to have two or more officer positions. However, there’s a stipulation: if a document or instrument requires signatures from two officers, that individual can only sign in one capacity.

Members

• Nature of membership: Nonstock nonprofit corporations in Louisiana are inherently assumed to have members. If no members exist apart from the board, then the board of directors effectively acts as the members.
• Annual meeting: An annual meeting of the members is mandatory, ensuring transparency and regular updates.
• Quorum for decision-making: Most members must be present for any decision.

How to form a nonprofit in Louisiana

Choose a name for your organization

• Select a name that defines your nonprofit’s brand.
• Follow Louisiana’s naming guidelines and avoid prohibited words.
• Conduct a name search on the Louisiana state website.

Appoint a Louisiana registered agent

• Ensure they are a resident, at least 18, and available during business hours.
• They must have a physical Louisiana address.

Assemble your board of directors

• Elect three unrelated individuals.
• Designate a president and a secretary.

Draft bylaws and conflict of interest policy

• These should align with Louisiana laws and define operating procedures.
• A Conflict of Interest policy ensures board decisions align with the nonprofit’s cause.

Decide on a nonprofit structure

• You may decide on religious organizations, mutual benefit organizations, or public benefit corporations.

Submit articles of incorporation

• File with the Secretary of State in Louisiana.
• It should include purpose, dissolution clause, and other necessary details.
• File copies with the local recorder of the mortgage office within 30 days.

File an initial report

• Submit the Supplemental Initial Report with the Louisiana Secretary of State – Commercial Division.

Obtain an EIN (employer identification number)

• Obtain an EIN as it is needed for various operational purposes, including tax purposes.
• Apply online using IRS Form SS-4.

Apply for federal tax exemption

• You must adhere to the 501(c)(3) guidelines of the Internal Revenue Code.
• File Form 1023 or 1023-EZ for tax exemption.

Request Louisiana state tax exemption

• Submit Form R-1048 to the Louisiana Department of Revenue.
• Understand Louisiana sales tax nuances.

Secure relevant permits and licenses

• Check requirements via the Small Business Administration Business License & Permit tool.
• You must register with the Louisiana Department of Justice Public Protection Division if fundraising.

File an annual report

• Update the state on your nonprofit’s ongoing details in an annual report.

Subsequent steps:

• Open a business bank account
  • Needed to separate personal from nonprofit assets.
  • Required documents: EIN, Articles of Incorporation, and bylaws.
    
• Hire a business accountant
  • Simplify payroll, bookkeeping, and tax-related matters.
    
• Acquire insurance
  • You may opt for General liability, Personal liability, or Worker’s compensation.
    
• Sign legal documents correctly
  • Always sign in your capacity as a representative of the nonprofit, not as an individual.

How much does it cost to form a Louisiana nonprofit?

To form a nonprofit in Louisiana, there are several associated costs:

1. Articles of incorporation: The fee for filing the Articles of Incorporation is $75. Additional optional fees may also be, depending on your specific needs and choices.
2. Tax exemption application: When applying for tax-exempt status with the IRS, there’s a fee involved. The cost is either $275 or $600, based on the specifics of your application and the nature of your organization.
3. Louisiana charitable registration: The registration fee for charitable organizations in Louisiana is $25. However, certain organizations might qualify for an exemption and not need to pay this fee.

If you’re looking to form a nonprofit in Louisiana and are concerned about these costs and the process, Maxfilings can assist. We can help you incorporate your Louisiana nonprofit for free, ensuring there are no hidden charges or unnecessary hassles for you. Leveraging Maxfilings can simplify the process and help you get your nonprofit up and running without financial strain.

Why MaxFilings is your ideal partner for nonprofit incorporation in Louisiana

• Transparent pricing: No hidden costs—just competitive, transparent fees.
• Convenience: Our platform allows you to compile and modify your information securely online at your own pace.
• Security: Your data is safe, thanks to our robust security measures.
• Added benefits: We’ve partnered with SEO Advantage to provide valuable services in PR, web development, and more.
• Satisfaction guaranteed: We’re confident in our services and offer a 100% satisfaction guarantee.

Want a seamless and simplified process for incorporating your nonprofit in Louisiana? Our Basic Package is $0 + Louisiana state fee, with no hidden charges. Plus, you can save your progress online, get guidance at every step, and enjoy comprehensive services designed for a smooth incorporation process.