How to Start an LLC in Louisiana

The first step to start a business in Louisiana (LA) is to choose a business structure. If you’re considering forming a Louisiana limited liability company (LLC), you’ll benefit from the same personal liability protection as a corporation but with more flexibility in terms of management structure and taxes. LA’s low individual income tax compared to other states is a significant perk that makes the Bayou State an attractive place for LLCs to start their own business. 

How to get an LLC in Louisiana in 6 steps

The Louisiana Secretary of State (SOS) online business registration service recommends you create a business license checklist before starting your LLC formation process. Once you've compiled your list, start officially registering your LLC in Louisiana by choosing a unique name for your business.

1. Name your Louisiana LLC

Before you can register your new LLC, Louisiana law requires you to choose a business name that's unique from any other business entity in the Bayou state. You can do a Louisiana business search on the (SOS) website to determine if your desired business name is in use. Once you've chosen a distinct business name, confirm that it complies with Louisiana naming requirements.

The following are the most important requirements to keep in mind:

• Your business name must include the words limited liability company, LLC, or L.L.C.
• The business name cannot contain words used to name a government agency (i.e., State Department, CIA, FBI, Treasury, etc.)
• The names of revoked LLCs aren't available for use until three years after the date of revocation.
• No business name may include restricted words (bank, lawyer, attorney, credit union, etc.) without additional documentation and licensure paperwork.
• No LLC name may contain the phrase "doing business as" or an abbreviation of the term.
• The LLC name cannot imply that the business is a government agency or charitable organization.
• No business name may contain any word or phrase that implies its purpose is to perform unlawful activities or activities contrary to its articles of organization.

If you prefer to register your Louisiana business online through geauxBIZ—Louisiana SOS' online business registration service—you must reserve your LLC name for a $25 filing fee. This service holds the name for a period of 120 days. You can also file a name reservation application with the Secretary of State.

In addition to an LA business name search, it's wise to do a trademark search to avoid accidental trademark infringement in your business name. You'll also want to consider if the name is available as a web domain and social media handle. 

2. Choose your registered agent 

The next step before you can officially register your LLC in Louisiana is to appoint a registered agent. A registered agent is the person or entity authorized to receive service of process and other official legal documents and notices on behalf of your LLC. The Louisiana Secretary of State requires all business registrations to appoint a registered agent for your LLC.

A registered agent can be a person (including yourself or an employee of your LLC) or an entity that offers a registered agent service. They must meet the following criteria:

• Entities (or companies) must provide registered agent services.
• The agent must have a physical address—not just a P.O. Box—in Louisiana.
• The agent must be on-site and available to accept documents during regular business hours.

While you can appoint yourself or an employee as your registered agent, most businesses prefer to hire an outside entity to save themselves the time and legal responsibility. Registered agent service fees range anywhere from $100 to $500 per year. LegalZoom offers these services for $249 per year.

3. Prepare and file articles of organization

The articles of organization is a document that officially establishes your LLC by laying out basic information about it.

You register your Louisiana LLC properly by preparing articles of organization and filing them with the Secretary of the State. That simply means filling out a relatively simple online form and submitting it. You can also send it by mail.

To file online, create an account with geauxBIZ and convert your name reservation to a business registration for a $75 fee plus a $5 statutory convenience fee. Similar to LegalZoom's service, this site registers your business with the SOS, Department of Revenue, and the Louisiana Workforce Commission.

To prepare your certificate, you'll usually need the following information if you file online:

• Your LLC name
• The purpose of the LLC
• The LLC's mailing address (if different from street address)
• The name and address of the registered agent
• Whether the LLC is member-managed or manager-managed
• The tax treatment of the LLC
• The name and addresses of each manager (if any)
• An electronic signature of a member, manager, or organizer
• A description of the LLC's business, including NAICS Code
• The names and addresses of any people authorized to execute documents for the LLC. There must be at least one person if the LLC has no manager
• The LLC's federal (employer) identification number (if any)

Note that if you file online, your registered agent must complete an electronic agent acceptance process within seven days, or your registration will be rejected.

Filing articles of organization by mail in LA costs $100 for a domestic LLC and $150 for a foreign LLC. For paper filings, you must prepare the following:

• Your name, address, and daytime phone number
• Your LLC's name and physical address in LA
• Your LLC's purpose
• Whether the LLC is perpetual or limited
• The signature of the organizer(s) in the presence of a notary public
• LLC's registered agent(s) names, street addresses, and signatures
• The signature of the registered agent(s) in the presence of a notary public

An initial report (Form 973) must accompany the paper filing and should include:

• The LLC's name and street address
• LLC's s registered agent(s) names, street addresses, and signatures
• LLC's initial managers or members of the names and street addresses
• The signature of each person who signed the articles of organization

Once you file your certificate, the secretary of state will review the filing. If the certificate is approved, the LLC becomes a legal business entity. The state issues you a certificate that confirms your LLC formally exists once formation documents are filed and approved.

You can then order certified copies for $15 each, which will allow you to obtain an employer identification number (EIN) from the Internal Revenue Service (IRS), business licenses, and a business bank account.

4. Create an operating agreement

An operating agreement, also called a limited liability agreement in LA, is a document that outlines the way your LLC will conduct business, including ownership structure, roles, and operational procedures. 

Louisiana doesn't require an operating agreement, but it’s an essential component of your business. Having a readily accessible, written operating agreement is particularly helpful in settling disputes over financial agreements and other potential litigation, should any arise. Without an agreement in place, courts typically make settlement decisions based on state law, which may not be in the best interest of your LLC and its members. An LA LLC operating agreement can include, but isn’t limited to, the following:

• LLC's name and principal address
• LLC's members' percentage interests in the LLC
• LLC's members' rights and responsibilities
• LLC's member's voting powers
• Rules for holding meetings and taking votes
• Duration of the LLC
• Name and address of the registered agent
• Information about the certificate of organization
• Purpose of the business
• Members and their contribution
• The way profits and losses will be divided
• Procedure for admitting new members, as well as outgoing members
• Management of the LLC
• Indemnification and liability clauses

The cost of drafting an LLC operating agreement varies. You can write it yourself for free, but as courts use this document as a basis to make litigation decisions, companies often choose to draft one with the help of a business attorney. LegalZoom’s operating agreement drafting service is $99.

5. Get an employer identification number and open a business bank account

The nine-digit EIN is assigned by the Internal Revenue Service to identify your LLC for taxes. You can obtain your EIN by mail or online by applying through the IRS website. GeauxBIZ requires you to obtain an EIN before you can convert your name reservation into a new business registration. That means you'll have to complete this step first if you plan to file online. However, the IRS asks you not to apply for an EIN until your organization is already legally formed.

LegalZoom also offers an EIN application service for $79 that saves you time and effort by letting us fill out the application and file with the IRS for you. Applying through LegalZoom helps to ensure it’s filled out correctly, and we'll send you your EIN and official documentation once it’s approved. 

The purpose of an EIN is to assist with the following:

• File and manage taxes at the state and federal level
• Open a business bank account.
• Hire employees.

As an LLC, it's important to open a business bank account to separate your business spending from your personal spending. Otherwise, a court could rule that your business isn't actually separate from you, which could jeopardize your limited liability status and liability protection. Business bank accounts also provide asset protection, reduce the risk of audits, and simplify bookkeeping.

6. Register for state taxes and get business licenses

LLCs that sell products or services in Louisiana need to register for state sales tax through the Louisiana Department of Revenue (LDR). There are three ways to register for sales tax in LA: LaTAP, Parish E-File, or by downloading a PDF and applying through the LDR website. The state sales tax is 4.45%.

Depending on your business activity, you may also need additional state or local licenses and permits. If you registered your LLC online through geauxBIZ, the site allows you to input business information to determine what licenses and permits you may need.

LLCs selling products will likely need a resale certificate—also known as a seller’s permit—that allows a business to collect sales tax and remit it to the state. You can apply for a resale certificate through LaTAP. You'll need the following information to apply:

• LDR account numbers for all locations
• Location address and mailing addresses (if different) for all business locations
• NAICS code (current)
• Business email address
• Resale inventory purchase amounts for the last 2 years ($0 for new businesses)

Check other business licenses through the licenses page of the Louisiana.gov site.

Next steps after forming your Louisiana LLC

We've covered the legal basics, but there are a few other steps you should consider to ensure your new business is seen and thrives in the modern market.

Register a domain name

Even if you don't think you'll need a webpage, you probably will. At the very least, you should reserve the option of having one in the future by buying your domain name now. Before finalizing your LLC name, it's a good idea to check if the URL is available. Having a domain that matches your business name will make it easier for prospective clients to find your business online and can help to build credibility.

Obtain a certificate of good standing

Once you've officially registered your limited liability company, you may want to order a certificate of good standing. You're not required to have this document, but you might need it to prove to potential partners, investors, lenders, employers, and customers that your business legally exists and has authorization to operate in Louisiana. You can order this certificate by mail, email, online, or in person through the SOS website for a $20 filing fee.

By mail. Send a written request with a check or money order payable to the Secretary of State to P.O. Box 94125, Baton Rouge, LA 70804.

By email. Email requests must come from an email address associated with a geauxBIZ account. Email admin@sos.louisiana.gov and provide the last 4 digits of a card associated with the account.

Online. Request a certificate of good standing through the Commercial Database.

You can also use LegalZoom's Certificate of Good Standing service for $45 and we'll file for you and deliver it once we've received it from the state.

Consider a foreign LLC

Registering a domestic LLC in Louisiana only authorizes you to legally operate within the state. In American corporate law, a foreign LLC refers to an entity that conducts business in a state other than the one where it was originally registered.

If your business is booming and you believe it could benefit from expanding into another state, consider registering a foreign LLC. The cost of registering a foreign LLC will vary state to state, but may be worth the effort to widen your customer base. To create a foreign LLC in LA, submit the Application for Authority to Transact Business in Louisiana (Form 972) for $150 or register online through geauxBIZ.

Annual filing requirements for Louisiana LLCS

Registering your LLC gives you a legal foundation to conduct business, but you need to keep your LLC compliant to protect your active status on the state's website. To stay compliant, all LLCs doing business in Louisiana must file an annual report online through geauxBIZ by the anniversary date of the LLC for a $25 filing fee plus a $5 statutory convenience fee.

In addition to an annual report, LLCs need to file state and local taxes. The amount of taxes you pay will depend on factors like how you choose to file (as an individual or a corporation), local tax rates, and business-related taxes, such as sales tax.

When paying taxes, a single-member LLC files similarly to a sole proprietor, and a multi-member LLC files as a partnership by default. Both are considered "pass-through" entities. This means that rather than paying corporate taxes, you report your gains and losses on your individual tax returns. However, you can file with the IRS to pay taxes as a corporation instead. Louisiana's state income tax rates range from 1.85 percent to 4.25 percent for individuals and 3.5 percent to 7.5 percent for corporations.

The cost of forming an LLC in Louisiana

The total cost of forming an LLC in Louisiana will vary based on the type of business you form, its scope, and operating cost. That said, it's helpful to have a clear picture of the basic costs every LLC will encounter in the state. Keep in mind that all credit card transactions through geauxBIZ will incur an additional $5 statutory convenience fee.

• Formation cost: $100 to file the articles of organization.
• Annual report cost: $25 per year, due by the anniversary date of your LLC.
• Certificate of good standing: $20
• Workers’ compensation insurance: about $1.24 per $100 of payroll after the 9% drop in rates.
• Registered agent service: $100 to $500 per year on average
• Operating agreement: $100 to $750 on average
• Website domain: $10 to $45 per year on average

These are just the basic fees for starting an LLC in LA. Depending on the nature of your business and the price of industry-specific business licenses and insurance, the cost of forming your business will vary. That said, the minimum start-up cost for forming an LLC in Louisiana is $369 with only the basic legal costs. If you include additional services to make your LLC formation easier, the cost could be a little closer to $553.

How to start your Louisiana LLC with LegalZoom

Louisiana's unified geauxBIZ service makes registering an LLC in the state fairly straightforward, but the process can be time consuming and requires attention to detail. For this reason, LegalZoom has created streamlined LLC formation packages to further simplify the process while helping to ensure compliance with state laws.

The LegalZoom process takes only three steps.

1. Complete our LLC questionnaire

Take a few minutes to fill out a simple questionnaire. Tell us whether you want to form a new LLC or convert an existing partnership or sole proprietorship into an LLC, and which personal liability protection provisions you want to include.

2. We apply for your LLC

After you’ve given us all of the important information about your new business, we compile your documents and file them with the Louisiana Secretary of State, Department of Revenue, and the Louisiana Workforce Commission. Then, we’ll file the required licenses or permits and create an LLC operating agreement tailored to your specifications.

3. Receive confirmation

Once the SOS processes and confirms your documents, we’ll send you your finished articles of organization, business registration certificate, other relevant documents, and actionable instructions on the next steps to ensure your LLC’s success.

FAQs

What are the benefits of registering a Louisiana LLC?

A registered LLC also makes it possible for you to do the following:

• Obtain permits or licenses necessary to operate your business, including health department permits, zoning permits, home occupation permits, professional licenses, and more. Some states require a seller's permit to conduct sales.
• Register your business with the state's tax agency.
• Open a business bank account.
• Apply for a business credit card.
• Purchase insurance for your business.
• Protect your name and logo with a trademark.

How long does it take to form an LLC in Louisiana?

It depends on how you register your business (online, in person, or by mail), how quickly your registered agent follows up, and state processing times. It can take anywhere from five to 10 business days for Louisiana's Secretary of State and geauxBIZ to process your formation paperwork.

The IRS will also take about four weeks to process your EIN via mail, but may be able to process it immediately if you file online. The resale certificate that many businesses need to start operating takes about seven to ten days to process.

How do I correct filing errors in LA?

To file amendments using geauxBIZ, log into your account and click "Getting Started" on your dashboard. Next, select "File an amendment, such as an annual report, with the Louisiana Secretary of State" and click Next. Then, enter your charter number to access your business' details page and select the type of amendment you want to file.

How do I dissolve an LLC in Louisiana?

To dissolve your LLC with the Louisiana Secretary of State, file an Affidavit to Dissolve-Louisiana Limited Liability Company by mail to the SOS' Office along with a $100 filing fee. You'll receive a Certificate of Dissolution once it's processed if everything is in order.

LegalZoom also offers a business dissolution service that can help ensure that your articles are filed accurately. This process avoids future fees or taxes that could arise from mistakes made during the filing process. Once filed, we’ll send your Certificate of Dissolution in the mail.

Rudri Bhatt Patel contributed to this article.