With its rich history and its world-famous Mardi Gras celebrations, Louisiana has no shortage of opportunities for new business owners. Forming an LLC can be a great way to start your company while protecting your assets.
Forming your own LLC isn’t hard — not exactly — but it can be confusing. The terms and forms used by the state can confuse you and bog you down in detail. That’s why we’re here — to strip away the complex stuff you don’t need and distill the process into simple, easy-to-follow steps.
In this article, you’ll find all the tools you need to start an LLC in Louisiana, including:
- Tips on drafting and filing the legal documents you need for your Louisiana LLC formation
- Guidelines for staying within state and federal law
- The actual laws and rules you need to follow
Step 1: Name your Louisiana LLC
Your first job is to think of a good name for your LLC. You can’t just pick any name you want, though. Louisiana Revised Statutes section 12:1306 has a detailed list of rules you have to follow when picking a name for your business entity.
Words You Have to Use
Most LLC names in Louisiana must contain the words “limited liability company” or the abbreviations “L.C./L.L.C.” In Louisiana, you can also form a low-profit LLC. In that case, you must include “low-profit limited liability company,” “L3C,” or “l3c” in the name.
What is a Louisiana low-profit LLC?
A low-profit LLC is an entity that meets the following special requirements:
- It has been formed for at least one or more charitable or educational purposes under federal tax law.
- The LLC’s significant purposes do not include making income or profit.
- The LLC does not have political or legislative purposes under federal tax law.
The main benefits of these companies are that they are flexible, lightly regulated, and have greater access to capital than non-profit corporations. Some people hold the opinion that these LLCs are not that useful. If you want to know more, you should speak with a Louisiana lawyer or accountant.
You’ll also need to add enough words to your LLC’s name to make it distinguishable from the names of other entities doing business in the state.
Let’s say that you want to open a business called “Mardi Gras Party Supplies, LLC.” When you check the Business Search, though, you find that there is already a corporation named “Mardi Gras Party Supplies, Inc.”
In this case, if you add words and make the name “New Orleans Mardi Gras Party Supplies, LLC,” it will probably be okay under the law.
Words You Can’t Use
Starting at Section 12:1306(4), Louisiana has a fairly long list of words that you can’t use in your LLC name. These include:
- Words that would confuse people into thinking your LLC is a government agency. “FBI” and “tax collector” are good examples.
- Words that form an “immoral, deceptive, or scandalous matter.” This is vague, but in general, don’t use profanity or obscene words in your LLC’s name.
- Words that “deceptively or falsely suggest a charitable or non-profit nature.” If you’re not a charity, a name like “Save the Whales, LLC” would probably not be allowed.
- Words like “engineer” or “survey.” You can use words like this if you get approval from the Louisiana Professional Engineering and Land Surveying Board.
- The word “insurance.” You may use this word, though, if your LLC is an independent insurance agency or brokerage firm.
- Words like “bank,” “savings,” “trust,” or “credit union.” You may use these words, though, if you get approval from the commissioner of the office of financial institutions.
Further, if you plan to name your business something specific like “law firm” or “barbershop,” you should check with the state agency regulating that business to make sure the name you want is okay.
The big rule is this: if you need a license to do your job, double-check with the Secretary of State to make sure your company name complies with the law.
Research the LLC Name You Want
Now that you have a good idea of the name you’d like, you need to make sure that name isn’t taken. To that end, the Louisiana Secretary of State offers a free online Business Search.
You can use this search to explore names and find something that both complies with the law and is distinguishable from the names of other entities doing business in Louisiana.
Louisiana DBA: Using a Fictitious Business Name
Now that you’ve complied with the laws and rules for naming your LLC, you may find that the name isn’t quite what you wanted. Or, maybe you’ve gone into business and you need to tweak your LLC’s name a bit so that it isn’t confused with a competitor.
This is a common problem with a common solution. You can get a fictitious business name or trade name for your LLC, also known as a “doing business as” name (DBA).
This process is addressed by Louisiana Revised Statutes section 51:214. That law allows you to register a DBA with the Secretary of State by filing a document with:
- Your LLC’s name and address
- The business your LLC does, including what kinds of goods or services it provides and how
- The date the DBA was first used anywhere, and the first time it was first used by you or someone else in this state
- A statement that your LLC owns the DBA and no one else in the state has the right to use it
The Secretary of State offers a form application and instructions. The filing fee to register a DBA is $75.
Step 2: Appoint a Registered Agent for your LLC
Louisiana Revised Statutes section 12:1308 requires your LLC to have a registered agent and office in the state. A registered agent is your LLC’s point of contact with the public. They receive correspondence, notices, demands, and service of process for your LLC.
Service of process is a legal term for business letters or legal papers. In other words, your agent is there for the state or the public to communicate with you.
Though your registered office can be the same as your place of business, it doesn’t have to be.
If your LLC is sued, your agent is the fastest and best way for you to find out. The agent and office are listed on the Secretary of State’s website for this purpose.
If a person filing a lawsuit can’t find your Louisiana registered agent, they can try to serve you in other ways, but there is a risk that you might not learn about the suit until it is too late. In that case, you could lose the lawsuit by default judgment. (A default judgment happens when you lose because you didn’t answer.)
The law gives you options about whom you can appoint as your agent. You can name a business or a Louisiana resident as your registered agent. Of course, this means that you can also be your LLC’s agent if you choose. Just because you can, though, doesn’t mean you should.
Hiring a company to do the job is a better idea. A registered agent company lets your LLC use the company’s address for its registered office. The agent then gets your important letters and service of process and passes it on to you.
You might be thinking that the job doesn’t sound hard enough to justify hiring someone else. Being your own agent can be tempting for a few reasons:
- It’s cheap: You’re not paying someone for something you can do yourself.
- It’s simple: The only address and contact information you have to keep current is your own.
- It’s reliable: You will receive all important papers personally.
Those are solid points. But there are also a lot of reasons not to do it yourself:
- No privacy: Your name and address will be published on the Secretary of State’s website.
- Junk mail/spam: You will get a ton of junk mail in addition to a small amount of real mail and any service of process.
- No breaks: Agents must be open for service during all business hours. They don’t get time off.
- Business interruptions: If your agency address is the same as your business address, your clients may be interrupted by people serving lawsuits. That could be embarrassing or hurt your reputation.
- It’s your fault if you miss something: You always have to make sure your agency address is correct and up to date. If you make a mistake or miss something, that’s on you.
Registered agent companies are an easy way to solve these issues. They aren’t pricey, either. They usually cost around $100 per year. Their name and address, not yours, are listed on the Internet. Depend on your agent to make sure you don’t miss anything. That way, you can focus on your business.
If you are looking for a professional registered agent service, take a look at our Best Registered Agent ranking for some of our recommendations.
A professional registered agent service can also help if your LLC will do business in multiple states and you need to register as a foreign LLC. Just find a company that does business in all those states, pay them a single fee for multiple agents and offices, then let them worry about the details.
Step 3: File Your Louisiana LLC Articles of Organization and Initial Report
Under Louisiana Revised Statutes section 12:1304, your LLC doesn’t exist until you file your articles of organization and initial report. Filing these legal papers will give you a certificate of organization for your LLC, which is proof that your company exists and can do business.
If you would like to avoid the hassle of handling your LLC filing yourself, you can also use a professional LLC formation service. Check out our Best LLC formation services article for some of our suggestions.
What to include in my Louisiana Articles of Organization and Initial Report?
Louisiana Revised Statutes section 12:1305 tells you what needs to be in these documents.
Your articles of organization should be in English and executed by at least one person, who doesn’t need to be a member of your LLC. (For example, your lawyer could sign the articles for you.) The articles must contain:
- Your LLC’s name
- Either (1) the specific purposes of your LLC or (2) a statement that the LLC’s purpose is any lawful activity
- A statement of whether your LLC is a low-profit limited liability company
In addition to those things, the statute allows you to add:
- A statement of which members or managers can legally bind the LLC, and how, or a statement that those limitations are in an operating agreement
- A statement of whether your LLC will have managers
- If there is a date by which your LLC must dissolve, what that date is
- A statement that people dealing with the LLC can rely on members, managers, or other people in the company to verify membership, records, or authority to bind legally bind the LLC
- Any other legal item you would like to include
Though you could put legal terms in your articles of organization instead of an operating agreement, we recommend drafting a separate operating agreement anyway. See the discussion in Step 4, below, for more details.
The initial report is a legal document that should be signed by the same person(s) who signed the articles or organization. It should have:
- The location and street address (i.e., not a post office box) of the LLC’s registered office
- The full name and street address of each registered agent
- A notarized affidavit of acknowledgment and acceptance signed by each of its registered agents (in other words, signed confirmation by the agents themselves)
- The names and street addresses of the manager(s), if your LLC has them, or its members if not
Louisiana offers a combined form for the articles and initial report on the Secretary of State’s website.
Louisiana LLC Filing Fee
According to the Louisiana Secretary of State’s fee schedule, the filing fee for the articles of organization and initial report is $100.
Louisiana LLC Processing Time
Expect two to three business days processing time for your articles and initial report. If you would like expedited processing, the Secretary of State offers two options:
- Within 24 hours: $30 fee
- Walk-in processing while you wait: $50 fee
You will likely get faster processing by filing your documents online.
Step 4: Draft your Louisiana LLC Operating Agreement
Operating agreements are contracts between you and the other members of your LLC.
You don’t need to have an operating agreement, but we strongly recommend you take the time to make one. An operating agreement states your LLC’s rules and can help settle disputes. It also tells you how to let in new members, let existing members exit, and manage other events.
Every company’s needs are different, so every contract should be different. This is your chance to set down the rules that will govern your LLC for a long time.
Keep in mind that if you don’t make your own rules with an agreement, Louisiana statutes will decide the rules, and possibly the fate, of your LLC. If that makes you nervous, you’re wise. It’s, therefore, best to think about the rules now.
A good operating agreement should have all up-to-date facts about your LLC. If you are forming your company with other people (LLC members), you likely each have your own job at the company. The agreement outlines all the jobs and sets standards to make sure everyone is doing their best.
When LLCs draft their operating agreements, those contracts typically perform some or all of these functions:
- They say what the manager has the right to do. Managers also have special duties to the company and the members. The operating agreement should state these.
- They determine the rights and duties of LLC members. If one LLC member is responsible for running the business or managing the books, the operating agreement should say so.
- They say how new members can join the company. They also have rules about how existing members can leave or how they can transfer their interest to someone else.
- They set down how and when profits are paid to members. They can also create different types of membership and payment schemes.
- They say whether members or managers are in charge. They also say how to hire and fire managers.
- They say how and under what circumstances the LLC should end. You might not want to dissolve your business now, but you might in the future. It’s best to think about it and plan before it becomes an issue.
- They say how to change the rules. You may need to amend your operating agreement in the future. The operating agreement should set down the rules for making changes.
As you consider your options, there is one last thing to keep in mind. Unlike your articles of organization, the operating agreement is a private contract. It doesn’t need to be filed with the state, and it can be amended as you and the other members of your LLC like.
This is a good reason to have a separate operating agreement rather than just including a lot of legal items in the articles themselves.
In fact, your articles should indicate the existence of an operating agreement so that anyone dealing with your company has notice of the existence of the agreement and the fact that it may have rules that apply to company business.
Step 5: Get an EIN (Employer Identification Number) for Your Louisiana LLC
Your personal income tax documents use your social security number to identify you to the IRS. Companies don’t have social security numbers, but it’s just as important that the government keeps track of where their money is. The way it does that is by issuing EINs.
Not all LLCs need an EIN. Here are the most common times when you need an EIN:
- Does your LLC have more than one member?
- Does your LLC have any employees?
- Is your LLC taxed as a C corporation or S corporation?
If the answer to any of the above questions is yes, you will need an EIN. Also, note that most banks will require an EIN to open a business bank account for your LLC.
The good news is that it’s not hard to get an EIN. The IRS has a detailed website on the topic and allows you to apply online. An application takes about five minutes. If you don’t want to go online, you can also file IRS form SS-4 via mail or fax.
Because it’s so simple, you should never pay anyone to get an EIN for you unless they are throwing it in as part of a bigger service package.
First Tasks After Registering your Louisiana LLC
After forming your LLC, you’re likely ready to get started. But there are a few other things you need to take care of first.
Open a Business Bank Account
First, go to the bank. You need to open an account for your LLC. Even though it’s not mandatory to start a business, there are three solid reasons to do it:
- Accounting: You’re in business to make money. You can’t tell if you’re making money unless you know how much your company spends and deposits every month.
- Credit: Even successful companies need to borrow money. You don’t want to use your personal credit, though, for a business expense. Keeping LLC money separate helps it build up credit that it can use for its own needs.
- Personal Asset Protection: Keeping your company’s money separate from your own is the whole point of even forming an LLC instead of operating as a sole proprietorship. Without a business bank account, you risk losing that protection.
If you care about proper accounting (and you should), an LLC bank account is crucial. Running a business means keeping detailed financial records about expenses and income. You can’t do that if you don’t keep your business and personal finances separate. The easiest way to do that is to use different accounts.
Even if you don’t plan on it now, there might be times in the future when your company might need to draw on credit. For instance, you might need to make improvements, sign a new lease, or invest in new technology. When that time comes, the LLC should borrow, not you.
The liability protection of an LLC is perhaps the best reason for separate bank accounts. If someone sues it, your own assets are not at risk, and you won’t be liable for business debts. This company/individual separation is called the corporate veil. (Even though an LLC is not a corporation, it’s still called a “corporate” veil.)
If you treat your company’s assets like your own, the veil can be pierced. That means you would lose all liability protection. So, for example, if you are taking the company’s money and using it to pay your household bills, you could lose a key benefit of your LLC!
We can’t stress this enough: don’t mix your personal assets with those of your company. It isn’t worth the risk. Get your LLC its own bank account, and you’ll be better off for it.
Get Business Insurance For Your Louisiana LLC
You likely don’t want to spend more money on insurance, but you’ll be glad it’s there if you need it. You protect your health, car, and home with policies. Your new business is no different. (And in some cases, you will have to buy it!)
There are lots of types of insurance. Here are some more common policies to think about:
- General liability insurance: You’ll need this if there’s an injury on your property. It pays for damages and a lawyer if you need one.
- Commercial automobile insurance: This works like your own car insurance. It covers company drivers and vehicles.
- Workers compensation insurance: If your LLC has even one employee, it must carry workers’ compensation insurance to pay for on-the-job injuries. LLC members can be excluded from this requirement if they wish.
- Commercial property insurance: This protects from losses due to property damage. Flood insurance is often a separate policy.
- Professional liability insurance: Lawyers, doctors, architects, and other professionals need this insurance. It provides coverage and legal defense in the event of a malpractice case.
- Business income insurance: If you have to close for some time, business income insurance can pay back the loss of income. Policies vary, though. Make sure that you know what kinds of losses will be covered.
Keep Your Louisiana Company Compliant
Now that you’ve gotten started, go out there and do your best! But keep in mind that, as a business owner, you do have ongoing legal issues to take care of. Here are some you should look at every once in a while.
Louisiana Business Permits and Licenses
There is no statewide business license, but many parishes and cities will likely require you to have one. Check with your local government for the exact requirements for your LLC.
Also, remember several types of businesses require professional licensing by the state. Make sure that you get permission and keep your licenses in good standing with the appropriate agencies.
Louisiana Tax Requirements
According to the Louisiana Department of Revenue, your LLC will be taxed and treated by the state in the same way that it is treated by the federal government for income tax purposes.
Because LLCs are “pass-through” entities by default, they are usually not taxed directly on their income. Rather, members are taxed on the income they each receive from the company. You may elect different tax treatment, but you should consult with a Louisiana lawyer or accountant if you are thinking about that option.
If your LLC has employees, you will need to pay employer taxes (including uninsurance) and withhold taxes as well. If you sell goods or services, you’ll also need to collect and pay sales and use tax. You can register and start addressing these issues on the Department of Revenue website.
Federal LLC Tax Filing Requirements
Your LLC is considered a pass-through business entity for federal tax purposes. Profits or losses from your LLC should be on Schedule C of your personal tax return.
Annual Report and Other Filing Requirements
Louisiana Revised Statutes section 12:1308.1 requires your LLC to file a report every year on or before the anniversary of its formation. That report needs to be signed by a manager, member, or agent and contain the following:
- The street address of your LLC’s registered office
- The name and street address of your LLC’s registered agent or agents
- The name and street address of (1) the manager(s), if your LLC uses them, or (2) each member if it does not
It costs $30 to file your LLC’s annual report. The Secretary of State’s website does not currently offer a form annual report on its website.
Louisiana Business Formation Quick Links
- Internal Revenue Service — apply for an EIN online
- IRS information regarding the federal tax treatment of LLCs
- Louisiana Department of Revenue — Create an Account
- Louisiana Department of Revenue — LLC Tax Information
- Louisiana Revised Statutes section 51:214 — Registering Trade Name/DBAs
- Louisiana Revised Statutes Title 12 — LLC statutes start with section 12:1301
- Louisiana Secretary of State — Business Search
- Louisiana Secretary of State — File Business Documents
- Louisiana Secretary of State — Forms & Fee Schedule
- Louisiana Secretary of State — Form Application to Register Trade Name/DBA
- Louisiana Secretary of State — Form Articles of Organization and Initial Report
- Louisiana Workforce Commission — Frequently Asked Questions From Employers about Coverage
- State of Louisiana — Professional Licenses
Louisiana LLC FAQs
How much does it cost to start a Louisiana LLC?
The filing fee for your LLC’s articles of organization and initial report is $100.
What is the processing time to form my Louisiana LLC?
Two to three business days. You can pay extra to expedite this to 24 hours or processing while you wait in person.
What are the benefits of a Louisiana LLC?
A Louisiana LLC protects your personal assets while giving you favorable tax treatment. You can also use an operating agreement to customize your business structure so it best serves the needs of you and the other LLC members.
Where do I check if my Louisiana LLC name is available?
Use the free Business Search on the Secretary of State’s website. Make sure you check multiple words and phrases from your proposed name to distinguish it from reserved names and the names of other companies doing business in the state.