How to Start an LLC in Louisiana: Cost and Registration Steps

In 2021, despite the COVID-19 pandemic, over 107,000 people applied to start a new business in Louisiana. And while statistics show that a large percentage of startups shut down in the first year of emergence, these are still great numbers, indicating that the state's economy is slowly but steadily recovering from the pandemic.

These events have been influenced a lot by local incentives, which come in the form of special loyalty programs for companies and discounts for entrepreneurs who hire employees. Given this kind of interest and desire to start a business in the state, especially limited liability companies, let's find out how to form an LLC in Louisiana in 2022 and what it takes to get a competitive firm as a result.

In this article, we'll try to answer the most popular questions and provide clear guidelines to help young entrepreneurs understand how much money they need in the initial stages and how they should act before/after company registration.

How to Form an LLC in Louisiana: From Ideas and Benefits to Actions

Before we get to the heart of the article, let's talk about why you should open a limited liability company and why Louisiana is one of the most suitable states for startups, as well as small and medium-sized businesses.

Why LLC?

• When it comes to the main advantage of an LLC, as a business entity type, it's all about convenient profit distributions among all members of the company. The same goes for debts - like profits, company debts are distributed according to the contributions and capital of the members;
• Low Lousiana LLC formation costs and easy company start. These are evidenced by a small number of documents to file with the Secretary of State. Also, when compared to other types of businesses (e.g, corporations) and their startup costs, starting up a limited liability company is much less expensive; 
• An LLC can be set up with as many members as necessary;
• Protection from personal liability. The LLC structure is arranged in such a way as to allow its owners to separate their personal assets from business assets in case of any debts or lawsuits. Although it's worth noting that in some cases, LLC owners will be held liable for the actions of their employees;
• Low taxation costs and a variety of programs help not only run the project profitably but also grow and develop.

Note that, according to the regulations, if any member of the LLC leaves, the company will then cease to exist. In this case, other members of the LLC can open another company or take care of this issue in advance by drawing up an Operating Agreement. The internal company document typically includes all the necessary rules, regulations, and provisions regarding financial and functional decisions to follow by all members of the LLC. Such provisions will allow you to continue to run your company even if one of its members leaves.

Why Louisiana?

If you want to know how to start an LLC in Louisiana and why you should choose this state, the first reason to consider is that the state is rich in various incentive programs that attract many startups. 

Thus, the state offers software tax credits and special employee training programs for various business niches.

That said, there are many other reasons why entrepreneurs choose an LLC over another business entity. However, before focusing on how to get an LLC in Louisiana, we recommend that you consult with a professional lawyer, an accountant, or a tax advisor about what type of business is best for your case. 

For those of you who have already decided to choose an LLC as the most beneficial option, from this article, you will know about filing Articles of Organization with the state, as well as providing your annual statement of information (report), and things to do after the registration process. You will also find out how to successfully establish your LLC in Louisiana and remain compliant (and in good standing) with the state. This article will help learn how to quickly gain recognition from the government and build credibility with your clients/partners.

Louisiana LLC Registration: 5 Basic Steps

1. LLC Name

There are rules and regulations regarding the choice of your future company name that are set at the federal level. Some of them are, however, only relevant at the state level. Let's consider all of such regulations so you don't have to make any missteps when filling out your Articles of Organization (also known as a Certificate of Formation).

Basic LLC Naming Rules

• Uniqueness. Wherever a company opens in the United States, it must have a 100% unique name that is not taken by any existing business within the state. In order to avoid misunderstandings that can lead to lawsuits, an LLC name availability search should be performed; 
• Distinctiveness. When it comes to Louisiana LLC registration, young entrepreneurs will sometimes use business names that are similar to existing company names by adding suffixes, articles, symbols, or simply changing the font of their option. Such manipulations are strictly prohibited by law and, if applied, the Secretary of State will reject your filing for an LLC in Louisiana;
• Prohibitions. In the U.S., the government of each state is very strict about those LLC names that point to state and federal organizations (eg, "bank"), or international organizations (eg, "Olympic"). You cannot use business names that do not correlate with the purpose of the LLC or professional names, as well as any derivations of the following words: engineer, engineering, surveyor, surveying, bank, banker, banking, savings, safe deposit, trust, trustee, building and loan, homestead, credit union, DBA. Moreover, unless you're an independent insurance agency or brokerage firm, you can't use the word "insurance" in your LLC name. To use one of the restricted options, you need to get a special permit or a license from the appropriate government office, e.g. the Louisiana Commissioner of the Office of Financial Institutions or the Louisiana Professional Engineering and Land Surveying Board; 
• Type of business. At the end of your unique business name, you will need to specify what type of business the firm refers to. In this case, abbreviations "LLC," "L.L.C.," "LC," or "L.C." (or its full transcript "limited liability company") should be used.

Note that an LLC owner may use already existing names if the owner of that existing business gives his/her written permission. It is allowed to use the names of existing companies that have not paid taxes for 5 years or those that have filed for dissolution.

Louisiana LLC Name Requirements

Knowing how to create an LLC in Louisiana in advance is crucial in terms of state regulations and rules, otherwise, you can expect the Secretary of State to reject your application. You should also remember that LLC name requirements for certain business spheres may vary in different US states. That said, before you generate your memorable business name, make sure you consult with your local expert on this matter. 

So, what are the LA conditions for LLC names? Here's a list of the main ones:

• The name must not include words like "charity" or "non-profit" or any derivations, or, otherwise, suggest any hints of belonging to such organizations, unless the LLC is one;
• Low-profit limited liability companies must include "L3C" instead of "LLC" at the end of their names; 
• The name must not include any scandalous or immoral phrases or their fragments.

Choosing a Name for Your Louisiana LLC

When you choose a suitable name to open an LLC in Louisiana, it's essential to consider many parameters, not just those related to laws and requirements. For example, when reserving your LLC name, consider right away whether or not you are going to create your own website. If yes, then you need to create a domain, which should be consistent with the name of the company so that customers can quickly find you online.

Don't forget to create a business email address to communicate with customers through email. Namely, you will need to create a mailbox to match your domain. For example, [email protected] is an email address linked to the domain name spdata.com. Having a brand identity will allow your company to stand out and raise the level of recognition.

Consider your customers' preferences and name your company in a way that makes it clear to visitors what you do. For example, if you’re engaged in the coffee business, then it is advisable to use the words "beans," "roast," "cup," or "espresso" in the name.

2. Appoint a Registered Agent to Get an LLC in Louisiana

According to Section 12:1308 (Registered office and registered agent) of Louisiana Revised Statutes, every business must hire a registered agent to handle its legal correspondence. Such a person must have a registered office in the state and also be a citizen of Louisiana. Such requirements are the same for all LLCs in each U.S. state, which is not surprising at all since an RA is a liaison between government agencies and businesses.

The responsibilities of a registered agent include:

• Receiving important notifications/mail from the state and forwarding them to you;
• Act as the agent of the LLC for service of process (in case of any lawsuits);
• Receiving correspondence with the state on behalf of the company;
• Monitoring the filing of tax returns (state income tax and sales tax) and annual reports.

In Louisiana, your RA can be anyone you trust or a professional business formation service. Some LLC owners choose to be their own resident agents, however, it's not as convenient as it may seem (we'll explain why a bit later). Thus, the state law provides a wide range of options as to who can be your registered agent.

Basic requirements for RAs in Louisiana:

• Be a resident of the state, have a registered office (not just a P.O. box), and be 18 years of age or older (for individuals); 
• Be able to legally conduct business in the state (for entities); 
• Be available during business hours to receive and forward urgent notices from the state. 

When you are researching how to get an LLC in Louisiana, it's important to understand that if you do not list your RA on the Articles of Organization (LLC registration form), the Secretary of State will reject your application.

On Being Your Own Registered Agent

Often, LLC owners decide to perform all the duties of a registered agent on their own. At first glance, it may seem like a cheap (no need to pay yourself), simple (you only need a physical address), and reliable (only you have access to all the required documents) way. However, in this case, the LLC owner will face the following problems:

• No privacy. By indicating your home address as your business office address in the Articles of Organization when you set up an LLC in Louisiana, you make it publicly accessible. Consequently, this causes privacy concerns; 
• No free time. Registered agents have to be constantly available during normal business hours at the office to accept business mail. This means that, as an LLC owner, you can't take any vacations or sick leaves; 
• Risks of missing important notices. Such missteps can be costly, and sometimes even cause a limited liability company to shut down or get a bad reputation; 
• Risk of being embarrassed in front of clients/partners. When a business hires a third-party registered agent, all notices from the state come initially to the agent. The latter will then carefully notify you at the right time to preserve your company's reputation. Whereas, if you choose to be your own RA, there is a great risk that lawsuits will be served in the presence of unwanted witnesses. 

For the reasons above, it’s always easier and more beneficial to rely on a professional service or trusted person who is willing to handle the legal correspondence of your LLC. However, before registering an LLC in Louisiana and hiring a registered agent, make sure the company has enough experience in the field.

3. File Your LLC Articles of Organization

In all states of the country, people have to register companies with the Secretary of State to do business legally, and Louisiana is no exception. However, it's worth noting that the state is friendly to businesses and does everything to make the process of opening and running a company as comfortable as possible afterward.

The LLC registration process is accomplished through filing a set of documents with the Secretary of State and paying the required filing fee ($100). You can file online on geauxBIZ.sos.la.gov or download the form in PDF and file by mail or fax:

• By mail. In the latter case, a written domestic limited liability company Initial Report (Form 973) must be filed with the Louisiana Secretary of State (P.O. Box 94125 Baton Rouge, LA 70804). Once done, you can expect your results back from the Secretary within a week. The rules for completing the form must be followed (e.g. the form must be filled out in black ink);
• By fax. To file by fax, you can send your Louisiana LLC documents to 225.932.5314. On the form, indicate whether you need expedited processing (the service will cost $30 for 24-hour processing or $50 for 2-4 hour processing), and remember that the registration document must fully comply with all the required completion instructions.

Your Articles of Organization will be reviewed much faster if you apply online. It only takes you 2-3 days to wait to get a response from the Secretary of State. In addition, it's much more convenient to apply on a user-friendly website, especially after recent changes.

First, once you create an account on the site, you will be able to secure your personal data and track the status of your documents. Secondly, your account provides access to new functions and useful features of the platform as follows:

• The "My Businesses" tab allows you to examine documents and amendments submitted; 
• The "My Documents" tab will provide access to submitted applications for 120 days from the filing date.

There is virtually no session limit on the site, which means you can fill out the Louisiana LLC registration form as long as you want. Plus, the system will save the application as a draft in case of any interruptions. Within 14 days, you will be able to make any changes/edits in the form, and once everything is ready, you can send it to the Secretary of State.

If the application was rejected for any reason, the form can be edited online and resubmitted.

Registration Process

Your principal office address, company contacts, LLC purpose, details of your LLC members, etc. - all this information must be provided in your Articles of Organization. Everything must be entered correctly without any spelling mistakes or errors, otherwise, the Secretary of State will not approve your application and send the form back for editing. If you don't want to waste your time, make sure you consult a professional attorney and prepare everything in advance:

• Choose a business name (and reserve it, if necessary) and hire a registered agent;
• Company purpose. The most common way to fill out the "company purpose" line is to put an "X" in the field. This means that the company is "engaging in any lawful activity for which limited liability companies may be formed." In other words, in this case, your LLC's purpose will be general. If you plan to engage in business activities that require a special license/permit (e.g., an architect or veterinarian), you will need to provide that information in the document;  
• LLC duration. This field (just like the previous one) is optional. Especially, if you plan to have a "perpetual" duration. Meaning, that your Louisiana LLC will be eternal, i.e. may last indefinitely. Otherwise, if a shorter duration is possible, e.g. you plan to run your company for a certain period of time, you should indicate the chosen dissolution date in the field. A typical lifespan of an LLC in the United States is 20 years (at most); 
• Signatures. This is a mandatory requirement for the filing of the Articles. The document can be signed by all members of the company or only one person (organizer) who is filing;
• LLC Initial Report. This additional document is not required in all states, however, in Louisiana, you will need to include an Initial Report with the Articles. The form is signed by everyone who signed the Articles of Organization;
• Contact details of LLC members and registered office address. Indicate the location and municipal address of the LLC's registered office, and type in the full names and municipal addresses of your managers (if any), registered agent(s), and members. The Affidavit of Acknowledgement and Acceptance must be signed by each registered agent of your LLC before a notary public. Also, you will need to provide information on the number of your LLC members and their roles.  

Note that the state of Louisiana requires that all forms be notarized before filing the Articles of Organization with the Secretary. The notary must leave not only his or her signature on the document but also contact information.

Once all the forms are filled out and ready, you can file them online or send them by mail/fax to the Secretary of State:

• Mailing Address: P. O. Box 94125, Baton Rouge, LA * 70804-9125;
• Office Location: 8585 Archives Ave., Baton Rouge, LA * 70809;
• Web Site Address: www.sos.la.gov.

Within a few days, namely 3-7 days, the Secretary will send you a copy of the approved set of documents, i.e. the official certificate and the letter of approval.

Note that you don't have to wait for a week to get your approval. Simply choose the expedited service (check the appropriate box in the TRANSMITTAL INFORMATION blank) and pay an extra fee to get your approved documents in a day or 2-4 hours.

If you still have questions, you can contact the Secretary of State directly at (225) 925-4704.

4. Draft an Operating Agreement

When creating an LLC in Louisiana, it's up to each owner to decide whether or not to draft an operating agreement. However, such a document is an important tool for the internal affairs of the company. In the future, an OA can help resolve legal issues and handle various disputes between the members of your LLC.

In other words, an OA is a document that describes the rules of company management in detail and should be created irrespective of the number of your LLC members.

Why is it important to create an OA?

Below is a list of a few main advantages that an OA will provide for your LLC:

• Protection. The document spells out the rules of the LLC, which will be reckoned with by government agencies. This means that, to some extent, the OA can protect your company. For example, in standard situations, when one of the members of the LLC leaves, the company must automatically be dissolved and other members will have to create a new entity to continue business operations. With an operating agreement, however, this problem can be avoided by adding a special section on the rules for redeeming shares and leaving the company;
• Trust. You want to grow your business and are probably already attracting investors who might want to "inspect" your company with utmost care. Having an OA will make your LLC look professional and demonstrate that your company is a serious business - not just a hobby;
• No conflicts. Once you open an LLC in Louisiana, conflicts in the company between its members can arise when important decisions are made. And the consequences of such conflicts can have unpredictable results. A competently drafted operating agreement does a great job in resolving such issues; 
• Bank account. Sometimes, banks require a copy of the operating agreement before creating a business account.

Operating Agreement: Key Points

An operating agreement should be drafted with all the specifics of the business and state law in mind. Nevertheless, every OA must contain the following key sections:

• LLC name. Your business name should be written exactly in the same way as it was stated in the filed Articles of Organization; 
• Members and ownership. Provide information on all members of the LLC (full names and contact details). This is where you also need to indicate the percentage of the members' shares in the company, as well as the capital contributions of all LLC members; 
• Profit distribution. This point should be agreed upon with all members of the company. Choose one of the options for the distribution of profits - equally or depending on the ownership share. 

In the "profit distribution" section, it is advisable to describe in detail how the distribution process will be carried out. 

• LLC management type. Choose one of the options, depending on your company management type (manager-managed or member-managed);
• Duties and responsibilities of LLC members. This is where you will need to indicate the responsibilities of each member of the LLC, including rules for participation in meetings, operating structure management, and more; 
• Decision-making. Indicate your voting rules and regulations in this section. Specifically, when voting is necessary and how many "yes" votes are required to make a decision; 
• Meetings. Determine when company meetings will be held, how often, and who can participate in such meetings; 
• Leaving and adding new members. Spell out clear instructions on when and under what conditions new members can be added to your LLC, as well as what happens to a member's interest when he/she leaves the company; 
• LLC ownership transfer. Determine when ownership of a member's share can be transferred when he/she retires or what happens in the event of such member's death; 
• LLC dissolution. Spell out what happens in the case of company dissolution (for any reason); 
• Changes. As your business grows, over time, the provisions described in the OA may change. Therefore, the "Changes" section should be included on a mandatory basis. This way you will be able to make the necessary changes to the document (if necessary). 

Note that a copy of your operating agreement should be available to every member of the LLC.

5. Get an EIN for Your Louisiana LLC Registration

An EIN is a unique 9-digit number, which helps the IRS identify your business as a legal entity and check your tax history. The document is also required if your LLC has more than one member, i.e. to employ people in the company.

Moreover, you will also need it for other processes when registering an LLC in Louisiana. For example, an employer identification number is required if you want to open a separate bank account for your LLC, apply for a business loan or open a line of credit, get the necessary licenses/permits, or sell taxable products/services in the state, sell products that qualify for special excise taxes (e.g. alcohol, gasoline, or tobacco), etc. In other words, an EIN is like a social security number (SSN) for your LLC.

For limited liability organizations with one member, getting an EIN is not obligatory. However, such a document will surely give you more privacy and protect you from identity theft, providing more flexibility in terms of your future business operations. Thus, we recommend thinking about getting it in advance.

How to Get an EIN?

You can get an EIN for free through the IRS by submitting a form online on their website. The process usually takes not more than 5 minutes, and your employer identification number will be assigned to you via email in less than 1 hour. Applications are processed from 7:00 a.m. to 10:00 p.m.

Other methods: 

• By fax to 855-641-6935 (processing time up to 7 days); 
• By phone at 267-941-1099 (there is a charge to call this number); 
• By mail to EIN Operation Cincinnati, OH 45999 (processing time up to 4 weeks). 

Information for obtaining an EIN

• Legal LLC name and registered office address;
• Full name(s) of member(s), managers;
• Full names of the organizers;
• Type of the business and business activity;
• Effective date and closing month of the reporting year;
• The number of employees and contact details.

The Internal Revenue Service (IRS) offers EIN assignment services on a free-of-charge basis. Beware of companies that offer this service for a certain fee.

How Much Does it Cost to Open an LLC in LA?

Let's find out how much money you will need to open a limited liability company in Louisiana and consider the initial expenses to maintain the business. 

Note that all the prices listed below are relevant if you're filing on your own. In the case of resorting to special services, consider their prices. 

Filing Articles of Organization

The list of documents that have to be filed with the Secretary of State is described above. However, in order for it to be accepted, a receipt for payment of the state filing fee must be enclosed with the forms. Thus, to open a Louisiana LLC, you will need to pay a $100 fee. 

The processing will usually take a few days (on average), but you can opt for expedited processing by paying one of the following extra fees:

• Processing within 24 hours: +$30 (Expedite); 
• Processing within 2-4 hours: +$50 (Priority Expedite). 

For those who are expanding in LA, rather than starting a new business, an application should be submitted with a request for state business permits. In this case, there is a $150 fee at the box office.

Reserving a Business Name, Trade Name, Domain

You can reserve a company name by filling out Form 398. The price for the service is $25.

By successfully filing Form 397, the business is assigned a DBA. The price of the service is $75. The application can be completed online or by mail. The expedited procedure will cost you $105 (24-hour processing), and $125 (4-hour processing).

Note also that you will need to buy a domain name that matches your company name. Together with your chosen domain, you will have to pay for web hosting (about 30$).

Registered Agent

You can, of course, try to be your own RA and handle all the paperwork independently if you want to save money. Or you can take advantage of special services and spend from $39 a year and forget about the fact that you have to be in the office during business hours. A professional RA will make sure you don't miss any important notifications from the state.

Business Licenses

Considering all the required licenses and permits, it's hard to say how much it costs to open an LLC in Louisiana. Each business niche has its own requirements for obtaining such documents. Consequently, their prices are different. Some licenses are paid only once while others must be renewed by paying regularly (every 2-4 years).

The absence of such documents, when requested by the state, will lead to certain fines or penalties. Therefore, you should check with the state Department of Revenue (DOR) for your license/permit requirements before starting your business operations.

Annual Reports

All Louisiana LLCs are required to file an Annual Report each year to maintain a good reputation with the state. To make sure you're in compliance and in good standing with the state, you will need to pay a $30 fee and file your annual report online at the SOS website.

But what if you don't file the report? As an LLC owner, you then risk not only fines but also getting banned from doing business in the state.

Certified Copies and Certificate of Good Standing

You may need certified copies of the Articles of Incorporation, and you'll have to pay $15 for each copy. To make sure your business remains compliant with the state, you can get a certificate of good standing from the Secretary of State to satisfy your creditor(s) and/or bank(s). The current filing fee is $20.

Taxes

Don't forget that businesses in LA are subject to various taxes. For example, the state requires individual LLC members to pay federal income taxes (0.09%-6.2%). If you sell products to customers in the state, you will also need to pay sales tax (4.45%) and get a seller's permit to submit sales tax returns to the DOR on a monthly or quarterly basis. Then there are also employer taxes if your LLC has employees. For more information, visit the DOR website.

Insurance is another type of recurring expense. For example, state unemployment insurance (UI) taxes. To get more information and be able to pay online, visit the  Louisiana Workforce Commission (LWC) website and create an account.

Based on the above, knowing exactly how much it will cost you to start an LLC in Louisiana is virtually impossible, because there are too many factors that affect the final price. However, we can tell you the approximate price right now - it's $100-500.

First Things to Consider After Creating an LLC in Louisiana

No matter what type of industry you're engaged in, once your LLC is formed, it's important to maintain the business properly. This is how you will get more opportunities and benefits. That said, once you have your EIN and operating agreement, here's a list of the following tasks you want to consider:

• Open a bank account. LLC owners can use their personal bank accounts for business purposes, but such a decision will usually lead to problems rather than prospects. For example, using your personal bank account for business purposes will make it more difficult to handle tax paperwork. Especially, if there is no record of transactions. Also, using your personal account bears a high risk of losing your own savings. Whereas having a commercial bank account will allow you to split your personal and business assets; 
• Insurance. Make sure you know what kind of insurance you will need to get to keep protect your business and your employees (if any). For example, there is commercial property insurance, general liability insurance, business interruption insurance, workers' compensation insurance, professional liability insurance, bonds, and more;
• Licenses and permits. In most states, forming an LLC doesn't require a business license. Depending on the location of your business, however, the requirements for licenses and permits may differ. Most often, in Louisiana, an occupational license, as well as a city business license/tax permit, building permit, health permit, signage permit, alarm permit, zoning permit, alcohol & tobacco permit, liquor license, sales and use tax permit, and seller's permit are required for LLCs.

Keep Your Company Compliant

Once the Louisiana LLC formation process is complete, you can safely get to your business operations. Don't forget, however, that you must maintain a good reputation with the state, as well as meet all the necessary conditions and requirements. Namely:

• Comply with tax regulations;
• Keep your licenses/permits organized and valid;
• Stay up to date with any changes in the law; 
• Hire a professional lawyer/accountant to comply with tax and legal requirements; 
• Automate your processes if possible.

Conclusion

Now you know how to set up an LLC in Louisiana. Once you understand the process, everything is not so complicated and can be done even by a novice. Of course, you will need to focus on all the requirements and maintain your LLC properly. That said, you want to make sure there are no mistakes/errors in your registration documents. You can study all the required forms on the Secretary of State's website and prepare for the filing process.

For those of you who plan to rely on a professional business formation service, you can easily find one to prepare information and file with the Secretary of State, we recommend that you do your research regarding the competence and experience of your chosen service.

We are sure that after reading our guide, you will be able to open an LLC in Louisiana seamlessly and start running your business soon. We wish you the best of luck!

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