How To Start An Llc In Louisiana

While Louisiana is not often seen as the top business state in the United States, there are plenty of business opportunities in the state. In this article, we look at why you should start a business in the state, how to start an LLC in Louisiana, and the costs of the process. This is a really important guide for those looking to become a business owner in the state,

Why Start a Business in Louisiana?

Louisiana is not a state that is well-known for business affluence. In one report, it was ranked 48th in the best states to start a business in. Part of the problem is that the state has a very high unemployment rate, which is often a very bad indicator of the health of the state’s economy. Another problem is that the state has a negative GDP growth, which is a display of how well the economy is growing.

Therefore, it is often seen as a poor state that requires numerous changes.

That doesn’t mean, however, that the state is completely negative. In comparison to other states, business owners in Louisiana have a higher average salary, up to $10,000 more a year than those in other states.

In addition, the state’s government is well aware of the issues facing the state. Therefore, they have numerous initiatives that help business owners to establish themselves. And some are starting to see some benefits to starting in the state.

One of the biggest advantages of being ranked as one of the least desirable places to start a business is that competition is much lower than it is in other states. Less competition allows for better opportunity and there is less pressure to keep prices lower. Therefore, profits are going to be higher for the same goods than they would be in other states.

Another benefit is that there are fewer choices for customers, so retention can be much easier, and retention can cut the cost to sell by as much as 75%.

Here is a comparison of Louisiana compared to other nearby states.

Why Should I Start an LLC in Louisiana?

There are numerous reasons why you will want to start an LLC in the state. For one, LLC businesses have numerous benefits, while also offering protection for your business. And there are only a few downsides.

For one benefit, these businesses that have registered their LLC business name are protecting those brands being used by others in the state. This can be vitally important because you don’t want others using the same name. Two entities using the same name can be very confusing for audiences, which can lose your brand sales and customers. Another problem is that two entities can’t have the same name legally. If you don’t register your business name, and then someone else registers it, they can take you to court over the use.

Another protection that you get is that your assets are protected from seizure. The business is counted as a different entity from your assets. Therefore, if the business goes into debt, the house, car, clothes and more can’t be taken to pay for those debts. Therefore, you can be less stressed if business profits aren’t what they should be.

Another benefit is the access to services that you can get. You can open a business bank account with much more ease than an LLC. And you will also find it is easier to get access to financing and investors. Therefore, the chances of your business having the resources it needs for growth are much better.

Suppliers will also provide you with better credit terms, which can help your business with cashflow, one of the biggest business killers.

LLCs are also trusted more. Which can be a unique benefit that can lead to better sales. Your LLC can also be charged on personal rates, rather than corporate rates. However, you may wish to change this. Speak to an accountant about which is best for your business.

How to Start an LLC in Louisiana

Here are the steps that you need to follow if you would like to start an LLC in Louisiana.

Step 1 – Choose a Name

The first thing that you need to do is to create a name that you would like for your business. The name for the LLC does have to follow specific rules and regulations. For example, your business name must have a Limited Liability Company or an abbreviation like LLC. The name should also not have any words that are forbidden, like bank or creditor.

The name cannot be confused with a government agency either.

A final requirement is that your name should not be taken by another entity. To ensure that this is complete, you can do a Louisiana business name search. You can do this on the secretary of state website and this is free. You should also check on social media, and selling platforms and even check for domain availability.

The process for this shouldn’t take too long, and you can use a business name generator if you need help generating some names for your company.

Step 2 – Reserve your Business Name

Once you’ve chosen a name, you need to reserve the name with the secretary of state. To do this, you need to go to the secretary of state's website and apply for the name. There is a cost to this, and the registration only lasts for 180 days.

The cost is $30 for the period.

It is important to not waste your time once you’ve reserved the name. The paperwork in Louisiana can take more than six weeks to complete, and if your name is taken by someone else between the expiry of the 180 days and your business being registered as an LLC, your application for the LLC will fail. Therefore, you will have to find a new name.

Therefore, you will need to reserve your name and then complete the rest of the paperwork quickly.

Step 3 – Find a Registered Agent

As soon as you’ve reserved your business name, you need to get a registered agent. The registered agent is an individual or entity that acts on the LLC’s behalf. They can receive and send information to the right government departments within the state. All registered agents must be over 18 years old, they need to reside in the state and be available during normal business hours.

Some businesses can act on your behalf. For instance, you can hire ZenBusiness and Bizee, who will act as the registered agent in the state. The advantage of these businesses is that they can help with the whole process. And they can help you with your filing of annual reports and other deadlines, so you don’t miss them and get a fine.

Step 4 – Articles of Organization

Now you need to register your LLC by submitting the Articles of Organization. The cost of this is $100. This is below the national average, but it is not the cheapest in the area. There are other states nearby, like Texas that offer free submission. Several details should be included in the articles of organization that include:

• LLC name and address
• The registered agent’s details
• Manager-managed or member-managed
• The signature of the organizer

The process is relatively quick to file, but it can take more than six weeks to complete once filed. Therefore, don’t delay sending this.

Step 5 – Operating Agreement

Now you should look at getting your operating agreement written. This is a mandatory document, but it is one of the most useful. Banks, creditors, and investors will want to see a copy of this document before they engage with you.

The document details what needs to be done and what actions should be taken if there is a difference of opinion in the business. Therefore, it can help to determine normal business operations, who has the decisions, and what actions need to be taken.

Step 6 – EIN

The next step is to get an EIN number for the business from the IRS. The free Employer Identification number can be requested from the IRS website. There is no fee and it can take approximately two weeks for the number to be issued.

The EIN number is essential for businesses that have more than one member or are going to employ people. Banks might also request an EIN for opening a business account. In addition, investors might want to see one before they invest in your business.

How Much is it to Start an LLC in Louisiana?

There are costs when starting an LLC in Louisiana. These are relatively low compared to the national average, but they are higher than some of the best states. For example, the reservation of a name is just $30. The cost for filing the articles of organization is $100.

If you want quick filing of your documents, then there are other costs. And therefore, you can spend up to $200 on registering your LLC business in Louisiana.

What Are Taxes Like in Louisiana?

Louisiana has a moderate tax rate for a state. The state corporate income tax rate is between 3.5% and 7.5%. However, nearly all businesses in the state can benefit from some form of tax credit depending on several factors.

Final Word: How to Start an LLC in Louisiana

Louisiana is not the first state that people might consider starting a business in. However, there are opportunities within the state. Therefore, above are the instructions for how to start an LLC in Louisiana. Good luck with your business.