Are you toying with the idea of creating a Limited Liability Company in Louisiana?
LLCs are the perfect blend of running your business like a small business but with the legal protection of a corporation. It’s a business structure that ensures your personal assets stay separate from your business assets. If you’re ever sued or run into financial trouble, you won’t be liable to pay for any business losses from your personal finances.
You can have your LLC up and running in less than 7 business days and for around $125. To make sure you file your LLC correctly, follow our step-by-step instructions:
How to Form an LLC in Louisiana – A Step by Step Guide
You can apply for your LLC on your own or through a professional service. While filing on your own isn’t complicated and doesn’t take too much time, you still want to make sure you complete each step as outlined below, ensuring your LLC is set up correctly the first time around.
If you’d rather not handle your business’s legal side, we suggest hiring experts to file all your business paperwork for you (a more worry-free approach).
Otherwise, if you’re a do-it-yourself kind of person, follow these 5 initial steps:
1. Name your Louisiana LLC
To form an LLC in Louisiana, you need to follow specific name requirements set by state law. Your business name needs to be unique, meaning no other company has a similar name.
Before checking to see if the business name you’d like is available, to abide by Louisiana LLC law, make sure the name of your company contains one of the following:
- Limited Liability Company
Your LLC name can be your business name, like Plumbing King L.L.C, or the name of one of your LLC’s members, such as Joe Smith LLC.
Check Name Availability
Once you’ve decided on your name, you need to check to see if it’s available and there’s no other company in Louisiana using it. The quick and easy way to do this is through a quick google search using your desired name.
If you don’t find any competing companies, you can move onto the next step – checking your business’s potential name through the Louisiana business entity searc.
Once you find an available name, you need to reserve that name by filing a Name Reservation form with the Louisiana Secretary of State. It costs $25 and is good for 60 days. You can mail in your application or apply online through Louisiana’s business portal. It costs $25 to file. If you want to rush the processing time, you can pay an additional $30 to have it processed within 24 hours or $50 to get it processed within 2-3 hours.
Unlike other States, you have to reserve a name if you want to file your LLC online. You cannot do any of the next steps without first reserving your business name.
However, if you prefer to apply by mail, reserving a name is not mandatory.
If you choose to apply online, the $25 fee for reserving a name gets credited back to your account when you apply for the articles of organization (step 4).
Using a Fictitious Name
If you don’t want to use LLC in your business name, then you can add a fictitious name once your business is registered. Also known as DBA (“doing business as,”) or a trade name, a fictitious name allows you to run your business under a name that’s not the legal LLC registered name.
You can also use a fictitious name if you plan on running several different businesses under your LLC formation.
If you’d like to use a fictitious name in Louisiana, you need to register the name you’d like to use with the Secretary of State. You can apply by mail or online by filling out the Application to Register Trade Name Trademark or Service Mark. It costs $75.
Keep in mind that, to complete the form, your LLC already has to be formed (step 4). However, suppose you know you’d prefer to operate under a fictitious name. In that case, you can also reserve that name for $25 by filling out an application for reservation of trade name or service mark; this ensures you don’t lose the rights to use it.
Once you’ve figured out what your business name is and you’ve made sure it’s still available, the next step is to decide if you’re going to apply online or by mail. If you apply online, you can move onto step 2 (we recommend this path as it’s generally faster). However, if you apply by mail you can jump to step 3 and continue on (coming back to step 2 after completing all other steps).
2. Apply for your Louisiana LLC Employer Identification Number (EIN)
Once you have your LLC name reservation, you have to apply to get an employer identification number (EIN). An EIN is a federal tax ID number that registers you with the Internal Revenue Service (IRS). This number identifies your company when filing taxes.
Unlike other states, where you’d usually wait until your LLC is approved before applying for your EIN, in Louisana, it’s a mandatory requirement when applying for your LLC online; therefore you must apply for one beforehand. You will need to apply using the business name you reserved in step 1.
How to register for an EIN:
– Apply online or,
– fill out the Employer Identification Number form and fax it to 855-641-6935, or mail it to:
Internal Revenue Service,
Attn: EIN Operation,
If you apply online, you’ll get instant approval. If you apply by fax, it takes up to 4 business days, whereas mailing can take up to 4 weeks. Applying for your EIN is completely free! Once you have your number, the next step is choosing a registered agent.
3. Choose a Louisiana Registered Agent
A registered agent is anyone who receives and sends legal documents on behalf of your company. They are the main point of contact between your company and the Secretary of State.
In Louisiana, an LLC must have a registered agent who lives in Louisiana and has a valid street address (not a P.O. box).
An LLC registered agent can be:
- A family member or friend
- A Commercial Registered Agent
Why you should use a registered agent
While the easier route seems to have yourself, or one of your LLC’s members, act as the registered agent, there are some benefits in hiring a professional. A registered agent will ensure your business is always in good standing with the state, helping you stay organized and up-to-date. It also adds a layer of protection since they’ll help you in the case of a lawsuit or any penalties/fines.
Once you’ve decided who’s the best person to be your registered agent the next step is to submit your LLC application.
4. File a Louisiana LLC Articles of Organization
To file your LLC in Louisiana, you need to complete the Articles of Organization Limited Liability Company application and send it to the State. Rember that if you are applying online, you need to have already reserved your LLC’s name and have your EIN.
Be prepared to include the following information if you’re applying online:
- the LLC’s name (you need to use the name you reserved in step 1)
- a description of the LLC’s purpose & business (using a NAICS code)
- the name and address of the LLC’s registered agent
- if the LLC will be member-managed or manager-managed
- the LLC’s initial principal office address,
- whether your LLC will be taxed as a sole proprietorship, partnership, or corporation
- your EIN
- an electronic signature of one of the LLC members
Be prepared to include the following information if you’re applying by mail:
- the LLC’s name
- a description of the LLC’s purpose
- the duration of the LLC (if there’s no end date, choose perpetual)
- the name and address of the LLC’s registered agent
- if the LLC will be member-managed or manager-managed
- the LLC’s initial principal office address
- a signature of one of the LLC members
- the signature of the registered agent
- a completed initial report must accompany your application ($25)
What’s the difference between member-managed or manager-managed?
Member-managed is if you (and the other owners of your LLC) are responsible for everyday business activities. In contrast, manager-managed is if you decide to hire someone who is not a member to manage your business’s day-to-day activities.
Member-managed is more common for smaller businesses, while larger companies typically use manager-managed. You’d usually only choose manager-managed if you are a passive investor and aren’t involved much in the business.
If you fill out the forms with inaccurate information, your writing is illegible or you skip a section, your application will be refused. Always double-check your business information is correct before submitting it.
If you choose to apply online, it costs $100 (but since you’ll be reimbursed $25 for reserving your name it will come to $75). It takes 1-2 business days to get approval.
If you apply by mail, it costs $100 plus an additional $25 for the initial report. It takes 3-7 business days to get approval, or you can pay $30 for your application to be processed in one business day.
The information that’s included in your initial report is similar to what you’d need to fill out to reserve your name. Therefore, no matter what route you take, online or by mail, it will cost $125 upfront, but if you apply online, you get reimbursed for your name reservation, so the total cost comes down to $100.
Once you get approval, if you’ve applied online, you can move onto step 5. However, if you’ve applied by mail, you now need to complete step 2 (getting an EIN) and step 5.
5. Create a Louisiana LLC Operating Agreement
If your LLC has two or more members, it should have an operating agreement. Although it’s not required in Louisiana, we suggest creating one to outline how the business is structured and how it will operate among its members (and/or managers).
Some of the sections you’ll typically find covered in an operating agreement include:
- Capital distributions
Again, while this is not a necessary step, as you don’t have to mail it to the secretary of state, it is recommended if your LLC has more than 2 members. It helps clarify the rules of your LLC and makes sure they are legally documented.
After you’ve agreed and created an LLC Operating Agreement, the next step is to create your unique employer identification number.
Louisiana LLC Registration – Final Checklist & Summary
Ready to get started? Use this simple checklist to make sure you’ve dotted your i’s and crossed your t’s!
- Name your LLC – Your business name must include Limited Liability Company, Limited, L.L.C, or LLC. No other business can be using that name in Louisiana, so you need to check if it’s available through Louisiana’s online business entity search. If it’s still available and you’re planning on filing your LLC online, you need to pay $25 to reserve the name. This is a mandatory step for online applications. If you apply by mail, you don’t have to reserve your name.
- Apply for your Louisiana LLC Employer Identification Number (EIN) & File your Tax Registration Form – Once you have a name reservation (if you’re applying online), you need to register to apply for an employer identification number (EIN) through the IRS. This number identities your company when filing taxes. You can apply online for free, and approval is instant. This is a mandatory step for online applications and you need to have your EIN before step 3. However, if you’re applying by mail you can complete this step after your LLC has been approved.
- Choose a Registered Agent – A registered agent is a person who receives and sends legal documents on behalf of your company. It can be you, a friend or family member, or a commercial registered agent.
- File a Louisiana LLC Articles of Organization – To file an LLC in Louisiana, you need to submit the articles of organization application. It costs $100 if you apply online. To get approval you must have a reserved name ($25) and an EIN. The $25 you spend on reserving a name is reimbursed when you apply for the articles of organization online; therefore the total cost is $100. However, if you apply by mail, it costs $125 ($100 for the articles of organization form and another $25 for an initial report).
- Create Louisiana LLC Operating Agreement – If your LLC has two or more members, you should create an LLC operating agreement that outlines how the business is structured, who is responsible for what, and how much of the LLC each person owns. You don’t have to send your operating agreement to the Louisiana state, but you should have one, so everything is documented and signed by all members.
Always double-check your LLC information is correct before submitting any paperwork. You want to avoid simple mistakes and ensure your business is set up correctly from the get-go. If it’s within your budget, we recommend using a formation service to help form your LLC. They can act as your registered agent and make sure your company is always in good standing. Just make sure you do your homework and choose one of the best LLC services for your business.
Our first recommendation is to go with ZenBusiness, an LLC creation service that holds your hand from start to finish. Packages start as low as $49.
How To Apply for a Louisiana LLC Online
Now that you know the exact steps on what’s needed to form your LLC, it’s time to start the application process. There are two ways of going about this:
1. Do it Yourself
Taking the DIY route is a good option if your budget is tight or you’ve previously opened an LLC and understand how it works.
2. Use an Online Formation Company
Using an online formation company is a better option if it’s your first time opening up an LLC and if it’s within your budget (formation services cost anywhere between $49 – $199). This is typically a better choice if you want to avoid headaches and have peace of mind knowing professionals handle everything for you.
If using a professional service is more up your alley, here are our top 3 recommendations:
ZenBusiness built its platform to meet the needs of your business throughout its lifetime. When you pay for their services, you’ll receive a personalized dashboard for your business to store documents, receive alerts, and manage your website.
ZenBusiness charges work on a tier system. There are three different tiers with pricing as follows:
- The Starter = $49 annually
- The Pro = $199 annually
- The Premium = $299 annually
IncFile provides you with a full suite offering startup services to best support your business formation.
Their pricing model also depends on the state you are filling. You can generate a personalized quote on their website by entering the necessary information about your business.
LegalZoom is an online legal service provider that helps you to be able to create legal documents without having to pay the expensive lawyer fees. Some of the services they provide assistance to includes business formation, copyrights, and trademarks.
LegalZoom has many different pricing options available. For their LLC service, pricing begins at $79 + the allotted state fee.
After Starting Your Louisiana LLC
You’re approved – now what? The journey doesn’t stop here – there’s still a handful of things you need to do to get your business off the ground. We recommend ticking off the following items to make sure your LLC gets off on the right foot.
Purchase A Domain For Your Business
Even if your business is local, having an online presence is essential in creating trust, professionalism, and a way for people to find you. If you haven’t already thought about getting a website, now’s the time. In a tech-saturated world, you need a domain to not only attract new customers but help create a good first visual impression of what your business does and how it can help.
Get A Business Phone Number
Since your business is now an approved Louisiana LLC, you should think about getting a business phone number. Having a business number is a great way to show professionalism to your clients and customers. It makes you more serious and, more importantly – more trustworthy.
There are various online phone services you can go with, or you could go the traditional route and open an account through a local branch. You can get a local number or a 1-800; the options are endless!
Open Your Louisiana LLC Business Bank Account
You’ll want to open a business account that’s separate from your personal banking. This will not only make accounting easier, but you won’t have to worry about your finances mixing in with your business finances.
USA Business Bank Accounts
If you already have online banking, it might be easier to open a business account through your current bank, so all your banking (although in separate accounts) will be accessible in the same place. If you prefer to open something new, keep these checking accounts in mind:
Chase – Free checking account with no extra fees – as long as you keep a $1,500 minimum balance.
BlueVine – Free checking account with mobile banking and a debit MasterCard.
Bank Novo – Open a free checking account with Free transfers and free ATM fees.
B1 Bank – Open a checking account and help your business get the most out of your daily spending habits. You can choose from one of four checking accounts, each one tailored to your needs.
Along with your business checking account, you should apply for a business credit card too. Having a business credit card is an excellent way to establish your business credit score (which may help if you ever need a loan). It also makes it easier for online purchases, and again, it will keep your personal and business finances separate.
Find Accountant/Buy Accounting Software
Taxes get complicated fast and can be a burden to handle. We recommend getting an accountant or using accounting software to ensure all your spending actions are tracked (payroll, bills, invoices, receipts, etc.). Here are some popular options to look into:
Wave – Free invoicing & accounting software with credit card processing & payroll services.
Intuit Quickbooks – Online accounting software to track expenses, customize invoices, and run reports.
Freshbooks – Accounting software to send invoices, track time, manage receipts, expenses, and accept credit cards.
Directory of Federal Tax Return Preparers with Credential – If you want to use a local tax specialist, you can search for a certified public accountant (CPA) through the IRS online directory.
Having all of your business reports in one spot is highly beneficial, so you can keep an eye on your cash flow. To run a successful business, you will need to analyze how your business performs and narrow down what’s working or what isn’t working. Finding areas for growth will ensure success.
Don’t Forget to File an Annual Report
Every year you’re expected to file an annual report with the Louisiana Secretary of State. This report keeps your business in good standing with the state and is used to update any business information.
It’s due each year before the anniversary date that your LLC was approved; we suggest filing it a month before. For example, if your LLC was formed on August 5th, 2021, you should submit your report sometime in July 2022. It costs $30, and you can only apply online.
If three years pass and you still haven’t filed a report, the State has the right to dissolve your LLC.
Notify Louisiana Of Any Changes You Make To Your LLC
If at any time you make changes to your LLC you need to inform the state. If you’re using a registered agent they can do this for you. If you’re going about this alone, you can update changes through Louisiana’s business portal or through your registered agent.
8 Benefits of Forming an LLC in Louisiana
Setting up an LLC in Louisiana makes sure your business finances stay separate from any personal finances and that each member’s personal possessions are safe. It’s a great business entity for small, medium or large businesses as it gives you the freedom of a sole proprietorship or partnership with the protection of a corporation. Best of all, it’s easy to get (approval is instant), and it won’t cost you an arm and a leg. Some of its major benefits include:
1. Protect Your Personal Assets
The LLC will have its liability that does not automatically extend to the owners, unlike a sole proprietor, where you are legally responsible for everything. That means Louisiana LLC protects the liabilities and debts incurred by the business. In most situations, your assets, such as your car, home, or savings, will never be at risk if your Louisiana LLC is faced with lawsuits or bankruptcy.
2. Benefit From Business Profit Taxation
In an LLC in Louisiana, your profits and losses can pass through to your income without having to have corporate taxation.
3. Simple to Create and Maintain
The formation of a Louisiana LLC requires minimal paperwork and requirements. They are known for being easy to start and simple to maintain.
4. Minimal Restrictions
Your business matters can be managed by more than one owner or member while still being one main business to the public. This means all decisions and transactions behind the scenes can be equitably distributed while presenting one entity as you move forward.
5. Heighten Your Credibility
As you move forward, your Louisiana LLC will continuously be recognized as an entity. People and other businesses prefer doing business with a legitimate entity because it shows your level of professionalism.
6. Gain Access to Business Loans
When you form your Louisiana LLC, you will obtain a DUNS number and build your business credit, helping you to further build upon your business.
7. Benefit From Flexible Profit Distribution
In an LLC, you are not required to spread the distribution of profits equally across the owners. You have complete control over profit distribution in your Louisiana LLC.
8. Good For Any Kind Of Business
An LLC business structure in Louisiana is an excellent choice for both medium and higher-risk level businesses. You might always want to consider opting to go with an LLC if you have a significant amount of personal assets to protect from your company. And lastly, LLCs are great for owners who are interested in paying lower tax rates than corporations.
Filing an LLC in Louisiana is a quick and easy way to ensure your business has legal protection and that your personal assets stay personal. It’s a great business structure for small, medium or large companies who want to run as a small business but with the protection of a corporation.
Our only advice is to make sure you thoroughly read over all your paperwork before submitting it. Since the process in Lousiana is not as straightforward compared to other states, we suggest using a formation service, like Zenbusiness, which can handle the entire legal side of your LLC. They can act as your registered agent and make sure your LLC is filed correctly the first time around.
FAQ About Forming Louisiana LLC
There are several different steps you’ll need to take to form your LLC legally. It’s a lot of information to take in and can get confusing. To help out, we’ve compiled some answers to the most frequently asked questions:
What are LLCs, and why are they important?
An LLC is a Limited Liability Company. It’s a business structure used to protect your assets, like your house, your car, or even your savings. No matter what happens to your business (lawsuits, bankruptcy, etc.) your assets are kept safe.
How much does it cost to start an LLC in Louisiana?
If you apply online or by mail it initially costs $125. However, your reimbursed $25 if you apply online, bringing it down to a total of $100. After that, each year, you need to file an annual report that costs $30.
How long does it take to form an LLC in Louisiana?
It takes 1-2 business days to process your LLC paperwork if you apply online versus 3-7 business days if you apply by mail.
Can you start an LLC on your own?
Yes, you can start forming an LLC on your own by following the step-by-step instructions provided in this article. For additional help, look to hire an all-around service provider.
Do you need a lawyer to start an LLC in Louisiana?
No, you can start an LLC without a lawyer just be prepared to file and report everything on your own. If you’re not interested in getting a lawyer but want to make sure everything is filed correctly, use an online business formation service, like the ones listed in this article, with ZenBusiness as our #1 recommendation.
Does an LLC need to make money?
No, an LLC doesn’t need to make profits, but if you’re claiming tax deductions with no income, the IRS will likely audit your business.
What are the downsides to having an LLC?
There are pros and cons to forming an LLC. The pros are tax reductions, protecting your personal assets, and creating credibility for your business (and possible future business loans). The main con of an LLC is you’re considered self-employed. This is a disadvantage as you’d be taxed under self-employment and responsible to pay Social Security and Medicare taxes. The amount you’d be required to pay depends on your business’s total net earnings.