4 Best Louisiana LLC Services

Louisiana LLC Fast Facts

• LLC Formation Speed: Online filings processed in 24-48 hours, hard copies take up to five business days
• Cost to File an LA LLC: $100, plus the service’s fee if you use one
• How to File Your Articles of Organization: Online or by mail
• Annual Reports: Due each year by the date the LA Secretary of State approved your business; costs $30 to file
• State General Business License: Not required, but industry licenses may apply
• PLLCs: Available for 12 different industries; however, LA prefers professional corporations to PLLCs

What Is a Louisiana LLC?

LLCs are formal legal entities that are typically taxed similarly to sole proprietorships and general partnerships, in that the owners include any company profits or losses into their personal returns — the LLC itself does not owe income taxes.

An LLC may also elect to be taxed like a corporation, although this is not a very common option.

There are similarities to corporations too, especially when it comes to financial responsibilities. In an LLC, the owners or members are not usually personally accountable for the financial status of the business. This means that if someone sues your LLC, your personal assets are not at risk.

While Louisiana does not legally require LLCs to create an operating agreement, it’s still strongly recommended. This document can help clear up any disagreements between your owners, and it’s also just generally convenient to have a roadmap of your LLC’s operational aspects.

Louisiana has reasonable pricing for LLC formation fees, as you’ll pay $100 whether you file online or on a paper form. You can pay by check, money order, or credit/debit card. The state typically processes online filings within two business days, while paper forms take up to five business days.

The ongoing LLC maintenance requirements in Louisiana include the annual report. You need to file it by its anniversary date each year, and the filing fee is $30.

The Total Cost of Forming and Maintaining an LLC in Louisiana

In addition to the costs of a business formation service or hiring an attorney (which are optional, as we’ve discussed), there are quite a few other required and optional expenses when forming and maintaining a Louisiana business. You cannot form an LLC in Louisiana without filing the Articles of Organization, as this document is what officially registers your business within the state. It costs $100 to submit this filing.

Your LLC will be responsible for submitting annual reports each year. This filing is pretty simple, but it keeps the state up-to-date about some basic but vital business information like your address and registered agent. LLCs will pay $30 to submit the report.

You will also be responsible for taxes. LLCs taxed as corporations will pay both the corporate income tax and the franchise tax. And pass-through entities will pay the franchise tax and personal income tax.

Beyond that, your business will also have to pay federal taxes, along with several others. For instance, if you have employees, you’ll pay unemployment insurance tax. If you sell goods or services, you’ll pay sales and use tax. Depending on the nature of your business, there could be other taxes required, so check with the Louisiana Department of Revenue to make sure.

Other than that, the other potential expenses only apply to certain businesses. These include things like professional or industry-specific business licenses and business insurance.

Pros and Cons of Creating a Limited Liability Company

An LLC is one of the most popular entity types nationwide. But it isn’t the right type for everyone.

Only you can pick which entity type best fits you and your business; after all, you understand your business idea better than anyone. You have a clear vision for your products and services, both present and future.

To truly determine whether an LLC is right for you, it’s helpful to consider the advantages and disadvantages of LLCs.

Pros

• Easier to form and maintain than a corporation
• Personal asset protection
• Flexible taxation structure; can pay as a partnership or a corporation
• Business name is protected for exclusive use within state boundaries

Cons

• No authority to issue stock, so opportunities to raise capital are limited
• Fees are higher than partnerships or sole proprietorships
• Requires more paperwork than some entrepreneurs are comfortable with

Should You Form a Louisiana LLC or Corporation?

Common characteristics

There are some common aspects of the LLC and the corporation, starting with the personal asset protection they both provide. Also known as limited liability, this personal asset protection ensures that if your business is sued, only the business assets are at risk. Meanwhile, your personal assets — like your house, car, personal bank accounts, investments, etc. — are protected by your LLC or corporation’s business structure.

In addition, LLCs and corporations both provide their owners with business name exclusivity. If you own and operate a sole proprietorship or general partnership, you will not have exclusive rights to your business name. Instead, if another company decides to use your name as its own, you won’t be able to stop them. In fact, they could even register your business name and gain exclusive rights to it, forcing you to come up with a new one.

Advantages of the LLC

In general, an LLC is quicker and easier to form than a corporation. LLCs usually need to provide less information for their formation documents than corporations do, and there are fewer steps in the process as well. For instance, LLCs don’t need to draft corporate bylaws, name officers or board members, hold initial board meetings, or issue stock. On the other hand, corporations need to do all of these things and more.

The LLC is also a less rigid business structure that allows its owners greater flexibility. The business structure of a corporation is inflexible, with many regulations dictating how the business should look and function. Meanwhile, LLCs have options for business management structure and ownership responsibilities that corporations simply don’t have.

Another even more valuable option LLCs have is that they can choose how they want to be taxed. Most LLCs are taxed as pass-through entities, which means the business itself does not pay taxes, but the profits are passed through the LLC itself to its owners, who pay taxes on this money on their personal returns. However, LLCs can also opt to be taxed like corporations (either as a C corporation or an S corporation), giving them more options for taxation than a corporation has.

Advantages of the corporation

Corporations have some advantages too, like the ability to sell stock. It’s quite difficult for an LLC to attract outside investments because it cannot issue stock. The vast majority of investors prefer stock as their investment medium, and it’s also very rare to see venture capitalists investing in LLCs. For these reasons, the corporation is a much better option for businesses looking to attract investments.

In addition, the corporation has been around for hundreds of years, while the LLC is a newer addition to the American business landscape. This means that the corporation has more established legalities and also that it’s easier to expand into other states because the corporation’s structure is essentially the same no matter where you form it.

How to Set Up a Louisiana LLC on Your Own

Technically speaking, you don’t have to use an LLC formation service like ZenBusiness or LegalZoom. These services are incredibly helpful, but you can save money by completing the process yourself.

Creating a Louisiana LLC is exciting, but it’s also a legal process. Thankfully, though, there’s not a whole lot of “legalese” involved. Follow these steps, and creating your Louisiana LLC will be a cinch:

1. Name your LLC

Your Louisiana business name is a big deal — it goes on all of your official documents and advertising, and it’s how your customers will get to know your business.

Name recognition goes a long way, right? And when it comes to what name you pick, the sky’s the limit…mostly. There are a couple of general best practices to follow, and of course, there are a couple of Louisiana-specific restrictions, too.

For example, a business name should be…

• Unique
• Easy to say and spell
• Memorable
• Communicating to customers what good or service you offer
• Something you like!

Every name must also include the words “Limited Liability Company,” the abbreviation “LLC,” or some variation of the business type designation.

One last note: if your name includes specific words like “education,” “academy,” “bank,” or something similar, you may need to get additional approval from the relevant state agency.

Beyond that, there are a few Louisiana-specific rules you’ll want to follow. Most importantly, you cannot use a name that’s already been claimed by another business in Louisiana. Thankfully, you can check if your desired name is still available by running an Entity Name Search.

If your desired name is available, you shouldn’t hesitate to claim it! Ultimately, you’ll officially claim the name when you file your Articles of Organization (see Step 3). But if you’re not quite ready to file the Articles, you can reserve your name with the state. Simply fill out the Reservation of Corporate/Limited Liability Company/L3C/Partnership Name form and pay the applicable $25 fee. This will protect your chosen name for 120 days, giving you time to prepare anything else you need.

2. Choose a registered agent

In your Articles of Organization, you’ll be required to list the name and address of your registered agent. “Registered agent” sounds fancy, but don’t let the name overwhelm you: an agent acts as your primary contact for all official communications.

A Louisiana registered agent accepts what the state calls “service of process” on your behalf. Basically, if your business ever falls out of good standing (or something similar), the state will send an official alert to your registered agent. Because of that, the registered agent needs to be available during all regular business hours.

In Louisiana, you can serve as your own registered agent, but we don’t recommend it. You’d be tied down to your listed address, or worse, you might run the risk of missing an important letter. Plus, appointing someone else keeps your personal address private and cuts down on junk mail.

3. File the formation documents

Once you’ve chosen your name and appointed a registered agent, you’re ready to file your Articles of Organization. This all-important filing is what will legally create your business in the state of Louisiana, so it’s important to fill it out carefully.

Louisiana needs a lot of important information from you, including:

• County of the business
• Your chosen business name
• Purpose of your business
• Duration (usually perpetual)
• Signature of organizer
• Signature of notary witness

You can file your Articles online or by mail. Either way, you’ll need to pay the $100 filing fee. You can pay by check, money order, or by credit card. All checks should be made payable to the Louisiana Secretary of State.