Are you looking to form a professional limited liability company (PLLC) in Louisiana, but you’re not sure how the formation process works? There are several important steps when it comes to creating a Louisiana PLLC that is compliant and able to do business in the state.
The professional limited liability company (PLLC) is a specialized type of LLC that is intended for licensed professionals to offer their unique services. Louisiana law only provides for the formation of professional limited liability companies for the purpose of practicing dentistry.
The Louisiana PLLC is typically more popular than a professional corporation (PC) because it’s a more flexible business type, but it still includes the personal asset protection and professional qualifications that make the PSC valuable.
PLLCs in Louisiana have relatively simple formation and maintenance requirements, several options for how they want to be taxed, and flexible management. From one-person businesses to multi-member PLLCs with several owners, the PLLC is a popular choice for a reason.
An important detail of the PLLC that differs from a traditional LLC is that liability protection is not shared across all members of the company. For example, if you operate a PLLC for physicians, your business structure does not shield each individual member from malpractice suits. Instead, each member is liable for their own malpractice insurance, and no member is liable for another member’s malpractice.
Your PLLC’s name is often the first impression you get to make on potential customers, and therefore it goes without saying that this is an important step. There are a few different aspects to take into consideration when selecting a name for your business:
In Louisiana, the name of a professional limited liability company must consist of the full names as used on the license to practice dentistry issued by the Louisiana State Board of Dentistry of all participating members. The name must also contain the words “limited liability company,” the abbreviation “L.L.C.,” or the abbreviation “L.C.”
Another aspect to consider is including language that explains what your business does. For example, if you’re a doctor, put the word “physician” or the initials “MD” in your PLLC name. Additionally, if your business has strong values like being environmentally friendly, you can indicate that by including the word “green.”
At the end of the day, this is your business, and you should choose a name that makes you proud. You should also make sure your PLLC name both sounds good when spoken out loud, and looks good when written down.
The most important consideration for naming a PLLC is to not get too attached to any one business name until you know that it is available for use. To preliminarily confirm that your business name is available, visit the Louisiana Secretary of State’s website and search the Commercial Database. Once you’ve confirmed your business name is available, you can reserve the name for up to 120 days for $25.
Every PLLC in Louisiana is required to designate a registered agent, which is the individual or business entity that receives government correspondence on behalf of your business, then forwards those documents to you.
Your registered agent in Louisiana can generally be anyone of legal age and a legal resident of Louisiana. Examples of individuals that can be designated as your registered agent include, among others, an organizer, member, employee, attorney, or accountant of your professional LLC. Note that your registered agent must have a physical address in Louisiana.
Without a registered agent, you could lose your good standing with the state of Louisiana, and the state also has the right to dissolve your PLLC if they decide to. In a worst-case scenario, the state could fail to alert you regarding a lawsuit against your company, which could even lead to a judgment against your business because you didn’t defend yourself.
At the end of the day, we recommend hiring a dedicated registered agent service to handle these requirements. Doing so will help eliminate junk mail and more importantly, keep your personal and/or business address off public record.
Once you are ready to form your Louisiana professional limited liability company, you will fill out the Articles of Organization.
This is THE document that will register your PLLC with the state. You’ll want to ensure all of the following information is correct on the form:
Once complete, you can file the Articles of Organization either online through the geauxBIZ website or (for some parishes) by submitting a paper form to the Secretary of State. You must also simultaneously submit an Initial Report (Form 973) upon filing your Articles of Organization.
The filing fee for the Articles of Organization is $100. Expedited processing and priority expedited processing are available for an additional $30 and $50, respectively.
The Louisiana Secretary of State typically takes approximately 2-5 business days to process business filings. Expedited filings are processed in 24 hours and priority expedited filings are processed in 2-4 hours. Note that these estimates assume that your filing is complete and accurate. Any errors in your filing may delay the processing time.
After you register a PLLC in Louisiana, create a detailed outline that explains how you will run and manage your new business. Even though it doesn’t need to be filed with the state, put one together and keep it for your records.
When you open a bank account, you may be asked for a copy of this document. You’ll also want to keep in mind that any future business partners or managing members may also be interested in seeing your operating agreement before joining your company. After all, this document essentially serves as your overall plan for success.
An attorney can help you outline your operating agreement, or you can create one from a free template online. You can read more about operating agreements here, but some of the basic information you’ll want to have includes:
The vast majority of PLLCs require a federal tax ID number, or EIN. An EIN is basically the business version of a social security number, and it’s used for a variety of important PLLC functions.
For instance, you’ll need an EIN if you want to hire any employees, and many banks require them to open business bank accounts as well. You’ll also need one for tax purposes, hence the name federal tax ID number. Get an EIN for your LLC for free through the IRS.
The Louisiana Department of Revenue will treat your professional LLC in the same manner as it’s treated for federal income tax purposes. Most LLCs are treated as partnerships, meaning that the business entity itself will not pay any income tax. If you elect to treat your professional LLC as a corporation for tax purposes, however, it may need to file a corporate income tax return and a franchise tax return in Louisiana. You can find additional information on corporate income tax, franchise tax, and other state-level taxes in Louisiana on the Department of Revenue’s website. The LaTAP website can be used to manage your various tax accounts and electronically file returns and make payments.
Depending on where in Louisiana your business is located, you may also need to pay some local taxes. You should check with your city and parish in Louisiana to confirm your local tax obligations. You can find local business resources for four of the largest cities in Louisiana online: New Orleans, Baton Rouge, Shreveport, and Metairie Terrace.
While a general business license is not required in Louisiana, you may need to obtain one or more licenses from various state agencies. The geauxBIZ website can help you determine which licensing requirements apply to your business. A list of profession-specific licenses is also available on the State of Louisiana’s website.
If you would prefer to have a professional handle the paperwork for you, consider hiring an online business formation service.
Because of the often-complex nature of professional limited liability companies, some of our favorite service providers don’t offer PLLC formations, but there are still plenty of quality companies that do provide this service. A couple of our favorites for PLLC formation are LegalZoom and MyCorporation.
Another option would be to hire a business attorney to handle your PLLC formation. While this is certainly a more expensive route than using an online formation service, a lawyer’s expertise could come in handy when you’re forming a specialized business structure like this.
We highly recommend that you establish a separate business banking account so that your business and personal finances are maintained completely separate. This is important because it helps protect your personal assets and also makes filing taxes much easier. Once you receive your EIN from the IRS, you’ll be able to use it to establish an account at the bank or credit union of your choice.
Most employers in Louisiana are required to obtain workers’ compensation insurance. This requirement applies even if the business only has one employee (including part-time, temporary, or seasonal employees). Employers can obtain insurance either through a private insurer, by applying to be recognized as a self-insured employer by the state, or by joining an approved Group Self-Insurance Fund. For more information on workers’ compensation insurance in Louisiana, visit the Louisiana Workforce Commission’s website. Though not required, it’s probably also a good idea to pursue general liability insurance, as well as some industry-specific policies pertaining to the profession practiced by your PLLC.
Income reporting is just what it sounds like – reporting the income you made from your business. It’s important to note that you must file this form whether you made or lost money over the course of the year.
The form you use to report your professional LLC’s income depends on how you elect to treat your company for tax purposes. Various tax forms for businesses are available on the Department of Revenue’s website.
Louisiana business entities are required to file an annual report every year. This form is needed to update certain information about your business. You can file your professional LLC’s annual report online through the geauxBIZ website.
We don’t recommend that you attempt to manage your business finances without the help of a professional. There is too much room for error, and a professional can ultimately save you time and money by guiding you on how to best manage your business finances. At a minimum, enlist professional help to set you up with software and the steps for keeping up with your finances on a regular basis. Then, consult back with your accountant at least a couple of times per year – and especially at tax time – to ensure you’re keeping track of everything correctly.
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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