LLC Louisiana: A Secure, Efficient Entity

It’s not always easy to run a business outside of the country. But thanks to the great state of Louisiana, you can obtain an LLC (limited liability corporation) without having to worry about lawyers and costly paperwork.

Not only does this legally protect your company and assets from being taken away by litigation, but you can also open up an office in the United States without needing much more than your driver’s license as collateral.

Start your LLC in Louisiana

LLCs are not limited to just working from inside the United States. Many people choose to open offices based abroad. This is great for these individuals since there are many benefits to doing so. You can have an international income source, and you can take advantage of taxes in the country you’re serving, which is normally a benefit of being employed by a company in that country.

If you want to open up an office in a country that has no income tax, you can still take advantage of the U.S. tax code and manage your income for the benefit of the U.S. Internal Revenue Service (IRS).

Starting an LLC in Louisiana is easy, just follow these simple steps:

STEP 1: Name your Louisiana LLC

The first thing you need to do is pick out a name to go with your new business. There are many aspects of your LLC name, from the title of the company, to how it sounds. Think about what you would like your company to be known for, and then try to match it up with a name that fits that.

You can also trademark or copyright your business name as well.  For example, you could have a company called “The Louisiana Trust Company” and trademark it to sell items like Louisiana-themed keys and mugs.  This helps since it can help your business stand out from others who are offering the same products or services. It also helps with your search engine rankings as well.

Naming requirements:

  • The name must be unique
  • The name cannot have been trademarked already
  • The name cannot reference political parties, religions, or races
  • The name must be no longer than 39 characters.

STEP 2: Choose a Registered Agent in Louisiana

Once you’ve chosen a name and registered it with the Louisiana Secretary of State, you’ll need a Registered Agent in Louisiana. To do this, you can simply hire one company out to do this for you. This is known as a “Resident Agent.”

When doing this, make sure that you only choose one that is located in the state of Louisiana.  This saves businesses from expending extra time and money to avoid double taxation on their income.

Since LLCs are not required to have a physical address within the state of Louisiana, you can use a Post Office Box for this. But even though you use one, it is still registered to your Resident Agent.

 If you plan on hiring someone to be your Resident Agent, then they will simply provide you with their address so that you can use it as your address on all paperwork regarding the LLC. You will need this information when forming a business partnership or when making any other legal transactions that involve a Louisiana company.

STEP 3: File the Louisiana LLC Articles of Organization

When hiring a Resident Agent, they will provide you with the filing forms needed to create your LLC. The form that you need to fill out is called the Louisiana Articles of Organization. You can get this from your Resident Agent, or you can find it on the Louisiana Secretary of State website.

Once you’ve filled out this form and sent it back in, your LLC will be created and ready to run within 30 days.

STEP 4: Create a Louisiana LLC Operating Agreement

If you’ve ever heard of corporations, then you may have heard of the word “Articles of Incorporation.” This is basically a document that files the details of your company with the government. These are not needed for LLCs. 

The only legal document that is required for all Louisiana LLCs is the Limited Liability Company Operating Agreement. This document outlines agreements between people who have contributed to your company in order to run it effectively and smoothly. 

An LLC Operating Agreement:

  1. Defines the business structure
  2. Outlines your responsibilities as a member of the LLC.  This can include things like paying for business insurance, being responsible for taxes, etc.
  3. Outlines the split between owners and managers.  This will help you determine who gets what share of the profits that are made each year, and who is responsible for tax purposes.
  4. Outlines the exact responsibilities of the managers and owners of the company.  This includes things like working on time and determining how to spend profits if they are made.
  5. Outlines how much of the profits the managers get to keep since they are running the company since they have contributed money to it.
  6. Outlines how much ownership each member has in the company.  This is very important so that you can accurately be taxed on your profits when you file your taxes each year.
  7. Outlines how you want to manage the company.  This can be as simple or as complex as you feel comfortable with.
  8. Outlines any other terms that you want to include when forming your LLC. This can include things like how to contribute money to it, who has control of the money, who is responsible for taxes, and more.

Once your Limited Liability Company operating agreement has been completed, then you need to file it with the Secretary of State.

STEP 5: Get an EIN

You may have heard of an employer identification number (EIN) before, and if you haven’t, then you at least know what one is. An EIN is basically a federal tax identification number. This helps when you are filing your income taxes since it allows for the business to be listed as a separate entity from yourself.

You cannot file for an EIN online anymore like you can with companies, so you’re going to need to call and get one over the phone.  You can get this by calling the IRS at 800-829-4933 and asking them to direct you to a local office where you can get one.  Once you have this number, make sure that you keep it in a safe place since you will need it for tax purposes.

The pros and cons of forming a limited liability company (LLC) in Louisiana

There are many benefits to forming an LLC in Louisiana, and there are also many cons as well. It is important to consider all of the advantages and disadvantages before choosing to form your company here. 

Benefits

  • Louisiana has low operational expenses and taxes
  • Does not need as much paperwork as a regular corporation or LLC because it does not need to file annual reports since there are no owners.
  • No annual meeting in most cases, allowing for more time for other activities. 
  • Louisiana does not have residency requirements for LLCs.
  • Has a low cost of entry, meaning that it is very easy and inexpensive to form your LLC in Louisiana.
  • The state has no requirement for a registered agent service, meaning that you do not need to hire someone to run your company.  You can simply use a PO Box.
  • Allows for flexibility in the management of the company, making it so that anyone can contribute as much or as little as they want if they feel like contributing something to the company.

Disadvantages

  • Louisiana requires a minimum investment of $500,000 in order to form (although this can be reduced for others)
  • Can have difficulty when trying to buy out an owner that is still in the company.  This can lead to many problems, such as keeping ownership of the company.
  • Requires some more paperwork than a regular corporation or LLC.  But not as much as a corporation since there are no annual reports to file.
  • Louisiana does not have any residency requirements for LLCs, which may require an individual to make sure that they are getting home if they are going to be away from the state for long periods of time.

How much does it cost to start a Louisiana LLC?

The cost of starting an LLC in Louisiana will vary depending on the amount of help you need from the help of a Louisiana professional.  Some people find it easier to start their own company, while others may prefer to use a professional’s help when starting their business.  

However, one thing is for sure, since there are no annual meetings or taxes to pay when running your LLC in Louisiana, you will save money on these things.  For example, fees to file taxes as a corporation are about $400, and the same for an LLC are only around $100.

  1. Along with the cost of starting a Louisiana LLC, you will also need to pay for professional legal services if you are going to have any disputes with other members of your company or if you’re going to want any legal protection from lawsuits that may be filed against your business.  While you can do some basic legal research online to save yourself a little money, you may find it more time-consuming and result in a less professional product than what would be done by a local lawyer.  Besides legal fees, there may also be taxes to pay if the company is not profitable enough for you to write off the expenses of starting it on your tax return.  
  2. There are many costs that go into starting an LLC, but the most important thing is to make sure that your company is set up correctly before you begin. Many times people choose to form an LLC on their own and without any legal assistance because they can do it yourself by just filling out a form.  However, choosing to use a professional may be much smarter in the long run because you will not have any problems with the way your company is set up or how it will be managed.

How long does it take to start a Louisiana LLC?

When starting an LLC or any other type of business, you want to make sure that the process goes as smoothly as possible.  After all, you are investing your time and money into this business, so you have to make sure that it is worth investing in.  

When starting an LLC in Louisiana, the process can be very quick as long as you have all of the information needed to file for your Louisiana business license.  It could take two or three weeks or even longer from the time that you first choose to start your company until you receive your business license.  It is important to make sure that you expect this time period so you can plan ahead.

Separate Your Personal and Business Assets

You have to make sure that you can separate your personal and business assets. This is because you will be the only one having access to them. Whenever you face an emergency situation, your business will be safe and your personal assets will not be of any need to anyone else.

The best way to start a business is by creating business structures like an LLC or corporation, both of which are well known for confidentiality. Individuals need to be able to complete their tasks and start their businesses without worrying about the consequences.

1. Opening a business checking account:

You need to open a business bank account in the business name where you can deposit all of the money that you receive from your clients. You will be able to pay for all of your business transactions only with this account.

This is necessary because it helps you in administrating your funds and also in keeping yourself away from personal debts so that they are resolved in a better way.

It is a common practice for many companies to open multiple checking accounts based on the functions of their business. These may include payroll, operating account, contract account, and savings account.

Another wise step is to have a separate savings and investment account in the business name. The reason behind this is that you want to keep your business earnings and put them in a separate place from your personal earnings. This will help you in the future if you decide to pull out some money for personal use or for any other unexpected reason.

2. Getting a business credit card:

If your business is based on services or products, then most of the businesses will require you to have a business credit card. This helps you in keeping your personal expenses separate from your business expenses. It is important to note that you should be careful about the companies who offer these services.

There are many businesses that are willing to help a person in starting their business. They may even provide credit cards for starting the company and this can be a great help since these cards provide you with great convenience.

3. Hiring a business accountant:

If your business income is higher than $10,000 per year, then it is advisable to hire a business accountant. This is because there are many differences between accounting and bookkeeping and you would not want to commit any mistakes while doing both. It is important that this process does not consume too much of your time and you have to make sure that everything goes accordingly.

Most of the companies will provide a standardized set of books for all their clients. Each client’s book contains all the transactions which occurred during the time period stated in the books. There are many businesses that also provide a free set of books to their clients.

You should be careful before choosing a business as they may provide you with the wrong information and you may make some mistakes. It is important that you look into your business books regularly so that you can keep up with the transactions and changes that are being made in your company.

It is better for a single person to handle the job of bookkeeping rather than hiring another person for this purpose. Hiring a local bookkeeper is one of the easiest ways to start a business because they will be able to provide you with clear and fast results.

Get Business Insurance for Your Louisiana LLC

Insurance is one of the essential parts of starting your business.  You are going to need insurance in order to run a business at its best and also stay protected from any legal issues that may arise.

When you are starting an LLC, it is important to make sure that you know what types of insurance you will need for your Louisiana company.

There are many types of insurance that you will have to think about when looking to purchase some for your LLC.

1. Liability Insurance

This is one of the most important types of insurance that you will need for your LLC.  Liability insurance protects your business from getting sued.  When you are sued, you may be left with millions of dollars worth of debt which you may not be able to pay off, and therefore the only option left for you is to close your company.

2. Property Insurance

Property insurance will protect your business’s physical assets including furnishings, equipment, and supplies from any damage caused by storms, fires, or other natural events.

3. Professional Liability Insurance

You will have to get professional liability insurance if you are going to provide any services to your clients.  This is a necessity for any business and it is very important that you have this coverage in place.  When you start a new business, you might need to pay higher rates than usual for professional liability insurance because of the risk involved in this type of insurance.

There are many types of coverage that are available when purchasing liability and property coverage for your company.  You will need to get the right coverage for you and your business and ensure that you are covered enough to keep your company protected from any risk.

4. Business Income Insurance

Business income insurance can come in handy in many situations.  If you are only starting a business and you don’t yet have any collections, then you will have to purchase this type of insurance to make sure that your company does not go bankrupt because of unexpected costs and expenses.

There are many types of coverages that come along with business income insurance.  Business income insurance is not a must for businesses but it can be very helpful for you and your company.

5. Workers Compensation Insurance

Workers compensation insurance is only required for people who have more than 3 employees working under them.  It will protect you from any liability suits which may arise due to an employee getting injured at work.

6. Health Insurance

This insurance is for your employees and it will help you cover their medical expenses if they are injured at work.  Your employees will have legal rights when they fall ill or get injured at work.

While starting and running a business, you should take the time to read through all the various insurance policies that are being offered for your company.  It is important that you understand how each policy works to make sure that you are covered enough from any liabilities or problems that may arise from the Louisiana business law.

Louisiana LLC Business Licenses and Permits

Permits and licenses are a must-have for any business in the state of Louisiana.  Your company must comply with all state and local laws so that it does not come under any legal problems.

When starting your business, you will need to make sure that all the permits are obtained from the proper authority.  You will need to be able to obtain a permit if you are going to operate or conduct some type of business in Louisiana, whether it is a food truck or an art gallery.

Permits and licenses you must have:

I. Louisiana Sales Tax Permit

The first thing you will need to do once you have decided to start your business is to get a Louisiana sales tax permit.  You can apply for this permit from the Louisiana Department of Revenue.  This is a very important step in the process of starting up your business because, without this permit, you cannot sell any goods or business services in the state of Louisiana.

II. Louisiana Business License

You will need to get a Louisiana business license before you can run a north business in the state of Louisiana.  You can get this Louisiana business license from the local parish and you will need to meet certain business requirements in order to apply for and obtain a Louisiana business license.  Your Louisiana LLC number will be included when you file for this permit.

Louisiana Business License Fees

The state fees that are charged for getting a Louisiana business license vary from parish to parish in the state of Louisiana.  You need to check your local parish website for more details on their fees and charges because they vary from place to place.

There are some parishes that do not charge any fees for you to obtain a Louisiana business license.  In the parish of Tangipahoa, you can get a free Louisiana business license if your LLC is a domestic company.

The fees that are charged for a Louisiana business license also depend on the number of employees that you have.  If you have zero to four employees then it will be $25.  If you have five to nine employees, the fees that are charged for a Louisiana business license will be $30.  If you have ten or more employees then the fee that is charged will be $40.

By obtaining a Louisiana business license, you will be able to ensure that your company is operating legally and within the law and also ensure that it can operate without any problems or unnecessary hassles.

Once you have received your Louisiana business license, you will need to file an LLC application with the local parish.  Then you will have to complete the necessary forms and documents in order to make sure that everything is in order.

After you get your Louisiana LLC license, you need to ensure that all the documentation and fees are up-to-date so that you are not facing any fines or penalties from the state of Louisiana.

Louisiana LLC Tax Filing Requirements

In order to file your LLC tax returns in the state of Louisiana, you will need to be aware of all the tax requirements that are being applied.  These 2018 Louisiana LLC tax returns are not being heavily enforced by the state of Louisiana and all you need to do is be aware of these requirements and adhere to them.

For your LLC to be deemed legal, you will need to file a federal form 1065 so that it can be compliant with all the necessary rules and regulations that are being applied by the Internal Revenue Service.

 All LLCs that are being registered in the state of Louisiana must file their state taxes within 4 months from the date on which they were registered.  If your LLC is due for a tax return then you will need to get in touch with the Louisiana Department of Revenue.

Louisiana State Taxes Requirements For Your LLC

In addition to federal taxes, you will also be required to file for these state taxes in Louisiana:

1. Louisiana Individual Income Taxes

Louisiana individual income taxes are termed as the “Louisiana LLC’s Sales Tax and Income Tax”.  The Louisiana LLC’s sales tax is calculated at 9 percent and this is added to the Louisiana LLC’s income tax.  This combined rate of Louisiana LLC’s sales tax and income tax for individuals is at 6 percent.

2. Louisiana Business Corporation Income Taxes

Your business will have to pay business corporation taxes in the state of Louisiana which are worth $100 per year.  In Louisiana state taxes, you can claim a deduction for personal property taxes and this will be at a rate of 1 percent.  The personal property tax is calculated at $100 per year and this is added to the business corporation’s income tax.

3. Louisiana Corporations Income Taxes

Louisiana LLC’s income will have to be paid in order to maintain its legal status in the state of Louisiana.  The amount of the Louisiana LLC’s income tax will be at 6 percent for individuals and 4 percent for corporations.

4.Louisiana Franchise Tax

In addition to Louisiana LLC’s income taxes, you will also have to pay franchise taxes in the state of Louisiana.  These taxes are at a rate of 11 percent and the federal tax will be added to it in order for your business to pay up all the necessary fees.

5.Louisiana Personal Property Taxes

In Louisiana, LLCs must pay the same amount of personal property taxes as individuals.  This will be at a rate of $100 per year and this will be added to your LLC’s income tax.

6.Louisiana Sales Tax Permit

This is a very important Louisiana state tax that you must obtain in order for your company to be compliant with all the necessary rules and regulations.  In addition to paying sales tax, you are also required to pay a Louisiana sales tax permit.

 The amount of the Louisiana sales tax permit is equal to the amount that you have spent on purchasing assets within the previous 12 months.  This cost is calculated at $100 per year and this is added to your income tax.

7.Louisiana Employer Taxes

If your business has more than 4 employees, then you will be required to get an employer ID number from the Louisiana Department of Labor.  In order to get this number, you will have to apply for a Louisiana employment license and pay all the necessary fees that are associated with it.

File Your Louisiana LLC Annual Report

Most states require annual reports to be filed in order for businesses to maintain their legal status.  In Louisiana, you have to file your annual report once every 12 months.  The annual report will also include all the necessary information so that you can remain compliant with the laws of Louisiana.

 It will also list all the essential details you will need to classify the LLC in accordance with the state’s requirements.

Louisiana Corporate Tax Annual Returns

If your business has more than 4 employees, then you are required to file an annual corporate tax return and pay all the tax fees that are being imposed for it.  This annual return will have to be filed within 30 days of the end of a year and this is also a mandatory form.  There will also be a small filing fee which is $5.00 that you will have to pay for it.

Louisiana Corporate Tax Returns For Businesses

Louisiana LLC’s that have an annual income of more than $100,000 will be required to file an annual tax return in the state of Louisiana.  If your LLC does not meet these criteria then you do not need to worry about it.  You will just need to make sure that you are aware of the rules and regulations that are in place for Louisiana LLCs.

Louisiana Sales Tax Returns

If your LLC has purchased any materials or assets worth more than $4,000 then you will need to obtain a sales tax permit.  This permit is very important as it will allow your company to remain in compliance with the state’s laws and regulations.

 In addition to the sales tax permit, you also have to pay a small fee for it every year.  If your business has purchased any materials worth more than $4,000 then you will have to pay a fee of $100 per year.  This will be added to your Louisiana sales tax permit.

Louisiana Tax Filing Deadlines

In order for you to remain compliant with the state’s tax regulations, you will need to file your taxes within 4 months from the date on which your business was registered.  

If you fail to do so then you may face some serious consequences and may also be charged a penalty fee.

Conclusion

If you are a business owner and you have been doing your research on the various state taxes that do apply to your company then you should be familiar with this article.  Being aware of these rules and regulations will help you out a lot as it will help to minimize the number of mistakes that you may make.  

You will be able to claim all the necessary deductions and know how much money you can save in order for your company to comply with the state’s regulations.  

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