Start a Business in Louisiana
Starting a business in Louisiana? With low corporate tax rates and low annual report fees, Louisiana is a great place to start a business. All you have to do to get started is sell something, and you're automatically a sole proprietor. But there's more to starting a business than just making a few bucks.
How do you actually make money? Protect your personal assets? And do it all legally? We answer those questions and more in our complete guide to starting a business in Louisiana.
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1. Pick a Business Type
In Louisiana, if you’re looking to get to business fast with little to no filing fees, starting a sole proprietorship or general partnership may be right for you. A sole proprietor is a single person who sells goods or services without forming a separate business entity with the state, and a general partnership is two or more people selling goods or services.
While easy to form, sole proprietorships and general partnerships don’t provide liability protection. Without liability protection, you’re personally responsible for all your business-related debts. In order to have liability protection, you need to create a legally separate business entity, like a limited liability company or a corporation.
Louisiana Limited Liability Company (LLC)
Limited liability companies (LLCs) are similar to sole proprietorships in their flexibility, but they offer liability protection. LLCs offer you multiple options for how to manage your business, and you can maintain your LLC’s default tax status or select a corporate tax classification. To start a Louisiana LLC, you’ll need to file Articles of Organization and an Initial Report for $100 with the Louisiana Secretary of State Commercial Division.
Louisiana Corporation
Corporations are a bit less flexible than LLCs. With strict record-keeping, oversight, and organization, corporations are more attractive to investors than LLCs. Corporations have owners called shareholders and a board of directors selected by the shareholder(s). To form a Louisiana corporation, you’ll need to file Articles of Incorporation ($75) with the Louisiana Commercial Division.
Can an LLC be just one person?
Yes! A one-person LLC is called a single-member LLC. Single-member LLCs are one of the most common kinds of businesses in the country. For the most part, single-member LLCs are just like multi-member LLCs, but there are some slight differences in how they file taxes and protect personal assets.
Read all about Single-Member LLCs.
What about a Louisiana Nonprofit?
To start a Louisiana nonprofit, you’ll file Articles of Incorporation for a Domestic Non-Profit ($75) with the Louisiana Commercial Division. Louisiana nonprofits are run by a board of directors but may also have members and can be formed by “one or more natural or artificial persons,” (LA Rev Stat § 12:202 (2021)). An “artificial person” is any entity recognized by the law as a legal person, like a company.
Want to learn more? Check out our Nonprofit Guide.
2. Name Your Business
Sole proprietors and general partnerships use their personal legal name as their business name, unless they get a DBA. For LLCs and corporations, you’ll need a business name that meets Louisiana’s naming requirements. Your business’s name must:
- Use an appropriate identifier, like “LLC,” or “L.L.C” for a limited liability company or “Inc.,” “Corporation,” or “Incorporated” for a corporation.
- Not use words that describe government agencies like “police” or “department of state.”
- Not use words that suggest a false business purpose, like “charity” or “nonprofit” (unless your business is a nonprofit).
- Not use words that describe a service that requires a professional license, like “architect” or “doctor” unless you have the required licenses.
- Be unique in the state of Louisiana.
Find out if your desired name is available in Louisiana by searching the Louisiana Business Filings database.
Can I reserve a business name in Louisiana?
Absolutely. To reserve a business name in Louisiana, you must file a Reservation of Corporate/Limited Liability Company/L3C/Partnership Name ($25) with the Louisiana Secretary of State Commercial Division. Your name is then reserved for 120 days.
What is a Louisiana DBA?
A DBA is like a nickname that you can use in place of your legal business name. or your business. Your company’s legal name is the one you list on your business formation documents. If you’re a sole proprietor, your legal business name is your name. In Louisiana, DBAs are referred to as trade names, not to be confused with trademarked names. To file a DBA in Louisiana, you’ll file the Application to Register Trade Name, Trademark, or Service Mark ($75).
What about trademarked business names?
It’s a good idea to check with the US Patent and Trademark Office (USPTO) to make sure your business name hasn’t been trademarked by someone else. If it has, and you use it anyway, there’s a chance that the business could come after you for infringement.
3. File Formation Paperwork
The third step in forming a Louisiana LLC or corporation is filing paperwork with the Louisiana Secretary of State Commercial Division and paying the applicable fees.
- To form a Louisiana LLC, file Louisiana Articles of Organization ($100)
- To start a Louisiana corporation, file Louisiana Articles of Incorporation ($75)
You’ll list a Louisiana registered agent on these forms who will handle your legal mail.
Note: The information you include will be available online on the Louisiana Business Information Search. If you list personal information on these forms, such as your name or home address, anyone will be able to search for your business name and see this information.
What is a registered agent?
A registered agent is a person or business with a physical address in Louisiana responsible for accepting legal mail on your business’s behalf. While you are able to be your own registered agent, you’ll need to be available during regular business hours to accept legal mail. If you don’t want to be tied to one location while running your business, a registered agent like Northwest gives you the freedom to operate your business without worrying about who’s receiving your legal mail.
How do I keep my private information from ending up on public record?
To keep your personal and private information off the public record, hire a registered agent who will list their name and address instead of yours wherever allowed. (Hint: we do that!)
4. File a Louisiana Initial Report
The Secretary of State of Louisiana requires all LLCs to file an initial report with their Articles of Organization. Your initial report is attached to your Articles of Organization and must be filed together with the $100 fee. Corporations do not file an initial report.
If you haven’t named your LLC members or managers by the time you file your initial report, you don’t need to list them. But you’ll need to file an LLC Supplemental Initial Report with the Commercial Division and pay a $25 filing fee once you have members and managers. You only need to file your initial report once and then file your annual report every year on your anniversary formation date.
Both corporations and LLCs must file an annual report every year with the Louisiana Secretary of State to stay in good standing. Your business’s annual report is where you can verify or update the state on your business names, registered agent and directors/officers or managers/members. The report is due by the anniversary date of your company’s formation, and the fee is $30.
Read more about How to File a Louisiana Annual Report.
What if I don’t file an annual report in Louisiana?
If you don’t file your LLC’s or corporation’s annual report on your anniversary, your business loses its good standing in the state. After three years in bad standing, the Secretary of State will revoke your business’s right to do business or administratively dissolve your business.
5. Draft Internal Records
So far in this guide, we’ve dealt with public forms that you’ve had to file with the Louisiana Secretary of State. Now, it’s time to organize your internal records. These are the documents your business will keep on record within your company. Though these documents are internal, you’ll likely need to show them to third parties like the bank or—if you start a nonprofit—the IRS.
Here are the major internal documents you need to organize for LLCs and corporations:
Louisiana LLC Operating Agreement
This is your LLC’s rule book. It defines how your LLC will do things like make decisions, distribute money, manage operations, and appoint officers. Your operating agreement plans for every big picture scenario your LLC is likely (or unlikely) to face, including dissolution.
Drafting an operating agreement is hard, and the internet is full of shabby templates that have been copied and pasted from who knows where. So we had our attorneys draft a Louisiana LLC Operating Agreement template that you can use as a solid foundation.
Louisiana Corporate Bylaws
Bylaws are the rules your corporation will adopt and follow internally. Bylaws detail how your corporation will appoint directors and officers, hold shareholder and board meetings, and handle emergencies, among other things. Corporate bylaws are not required by law in Louisiana (see LA RS §12:1-206), but adopting corporate bylaws is standard practice and shows that your corporation is legitimate.
As with operating agreements, you can find plenty of bylaw templates online. But bylaws are pretty serious, so you don’t want to just use the first template you come across. Our attorneys drafted a Louisiana Corporate Bylaws template you can use to get started.
Starting a nonprofit? Learn about Louisiana nonprofit bylaws.
6. Get Louisiana Business Licenses
In Louisiana, there is no general state business license. However, certain professions need to get licensed by the licensing board that regulates their industry, and some parishes also require businesses to get an Occupational License to operate. Businesses such as contractors or electricians will need additional licenses as well. To help you sort out what you’ll need, we go over a few common licenses required in Louisiana:
Professional Business Licenses
Louisiana has new business owners set up an account on GeauxBiz on the Secretary of State’s site, where businesses can input the industries they’ll be working in and get a list of all the licenses they’ll need for their professional services. Which board you receive your Louisiana professional license from depends on the services you offer and the industry you work in. For example, addiction counselors are regulated by the Addictive Disorder Regulatory Authority, and midwives are licensed and regulated by the Board of Medical Examiners.
Local Business Licenses
In Louisiana, towns and parishes are able to require businesses to get an Occupational License from their local jurisdiction. For example, in New Orleans, business owners must get an Occupational License before doing business. The same goes for Jefferson Parish business owners. On top of your Occupational License, you may need to get additional licenses for particular services you offer. For instance, businesses in the construction industry may need to get electrical licensing or another type of specialized license.
Learn more about How to Get a Business License.
How do I get a professional license in Louisiana?
To get a professional license in Louisiana, you’ll need to file with your industry’s corresponding regulatory board. Your profession’s licensing board will determine the requirements and fees for your license. For example, the Louisiana Board of Medical Examiners requires midwives to pay $200 and file an initial application for a license.
How do I get a local business license?
Louisiana’s local business licensing procedures are governed by the local parishes where your business is physically located. For example, in New Orleans, you’ll file paperwork with City Hall to determine what additional licenses, permits, or certificates you may need, such as a Certificate of Occupancy for home-based businesses.
7. Organize Your Money
The liability protection you get from forming an LLC or corporation is only as strong as the separation between you and your business. At a minimum, you’ll need to open a bank account for your business. And if you’re going to hire employees, you’ll need to tackle payroll, too. But we’ve got you covered!
Open a Business Bank Account
To keep your business spending separate from your personal spending, you’ll need to open a business bank account. If you don’t, a court could find that your business is not actually separate from you, the owner, under the Alter Ego Doctrine. Also known as piercing the corporate veil, this is the outcome when a judge finds that a company is not a separate entity but rather an alter ego of the owner. If this ever happens, you could lose your limited liability status.
Opening a business bank account as a sole proprietor is important, too. Though sole proprietors and general partnerships have no limited liability status to protect themselves, both will benefit from organizing their business finances come tax season.
How do I set up a business bank account?
If you’ve formed an LLC or corporation, you will need to provide the bank with your formation documents, operating agreement or corporate bylaws, EIN, and in some cases, a Corporate Resolution to Open a Bank Account or LLC Resolution to Open a Bank Account.
Do I need a business bank account to accept credit card payments?
Probably. Payment processors require you to provide them with a bank account. This is where they’ll deposit funds from transactions. Most of the time, this needs to be a business bank account.
Some payment processors may let you get away with listing a personal bank account, but it’s not a great idea. Mixing your business finances with your personal finances erodes the separation between you and your business, weakening your liability protection. It also turns tax season into a nightmare.
Learn more about Payment Processing.
Set up Payroll
If you want to hire employees in Louisiana, you’re going to have to go through the payroll process. While setting up payroll can be confusing, we’ve broken the process down into easy steps. Here’s what you’ll need to do:
- get a FEIN
- register with the Louisiana Secretary of State Commercial Division
- register with the Louisiana Department of Revenue to get your Revenue Account Number
- determine whether you’re hiring employees or independent contractors
- prepare the forms your employees will fill out
- choose a payroll service or software
- decide on a payroll schedule
A reliable payroll system will automatically withhold payroll taxes, file state and federal returns, and pay your employees either by check or direct deposit.
What forms do my employees need to fill out?
Your new employees will need to fill out a W-4 to determine how much you’ll withhold and an I-9 to verify that the employee is eligible to work in the US.
What’s the difference between an independent contractor and an employee?
It’s important to understand the difference between an independent contractor and an employee. That’s because for employees, you’ll need to withhold and pay income, social security, and Medicare taxes. Independent contractors pay these taxes on their own.
An independent contractor is self-employed—how they complete their work is not directly controlled by an employer. An independent contractor may perform the same kind of work for other businesses, and can do the work when and how they choose.
An employee, on the other hand, performs their work how and when their employer chooses.
If you’re unsure, you can file Form SS-8 with the IRS and let them decide.
Learn everything you need to know about hiring independent contractors.
How do I get a Louisiana Revenue Account Number?
To get a Louisiana Revenue Account Number, apply online through the LDR Online Business Registration Portal or by mailing the Application for Louisiana Revenue Account Number to the Department of Revenue.
8. Get Business Insurance
Forming an LLC or corporation protects your personal assets. But if anything disastrous befalls your business—like a lawsuit, burglary, flood, or fire—your business is on the hook to pay. Business insurance can help cover the costs.
By law, every business with employees in Louisiana must have workers’ compensation insurance. While workers’ compensation insurance is a state mandate, it is there to protect both you and your employees in the case of injuries. Louisiana doesn’t require businesses to have basic insurance, but here’s what you should know about keeping yourself and business covered:
Workers’ Compensation Insurance
Workers’ compensation insurance protects you and your employees when your workers are injured on the job. As a state-mandated policy, you’ll need to obtain workers’ compensation insurance even if you only have one employee. To get workers’ compensation insurance, you’ll need to either sign up with a private insurer or request to be a self-insured employer.
Liability Insurance
Liability insurance covers the costs of claims against your business for injuries or damages to the property of others, like clients or customers. This includes medical expenses, legal fees, settlements, and judgments. Whether or not you need it depends on whether your business is likely to be sued and how many assets your business needs to protect. If it’s just you and your computer in your basement, you might feel comfortable skipping liability insurance. Or maybe you won’t. Beyond general liability insurance, you can purchase or add on more specific types, like professional, cyber, commercial, home-based business, or product liability insurance.
Do Louisiana business owners need workers’ compensation insurance?
Sometimes. Louisiana law allows owners to be exempt from its workers’ compensation insurance law if the business is…
- Owned by one individual with no employees and is not a corporation
- A partnership with no employees or subcontractors
- A one- or two-person corporation where the owners own all the stock and hold all offices with no employees.
Do I need business insurance for my home-based business?
Probably. You can’t count on your homeowners’ or renters’ insurance policy to cover damages related to your business. Most insurance companies offer a home-based business insurance plan.
9. Understand Your Tax Burden
Unless you’re a tax-exempt nonprofit, you’re going to have to deal with taxes on the local, state, and federal level in Louisiana. For corporations, Louisiana has a graduated corporate income tax ranging from 3.5% to 7.5% based on your net income. Louisiana also has corporations file a corporate franchise tax return. We break Louisiana’s business taxes down for you below:
Federal Taxes
- LLCs. Single-member LLC? By default, you’re taxed similarly to a sole proprietor. More than one LLC owner? You’re taxed as a general partnership. Either way, your default tax status is “pass-through,” which means you don’t pay corporate taxes. Instead, your LLC’s owners report profits and losses on their personal tax returns. Good news: Louisiana has a low range of individual income tax rates between 1.85% and 4.25%. You’ll pay those along with the 15.3% federal self-employment tax rate. An LLC can file paperwork with the IRS to be taxed as an S-Corp or C-Corp instead.
- Corporations. Corporations are taxed as C-Corps by default. This means that corporations pay the 21% federal corporate tax rate and a corporate income tax range of 3.5% to 7.5%.
To pay your federal taxes (and take a good deal of other steps required to start a business), you’ll need to get an Employer Identification Number (EIN). You can apply for one with the IRS or hire us to get one for you.
Do I need an EIN if I’m self-employed?
If you’re operating a sole proprietorship or single-member LLC that doesn’t employ anyone else and you don’t need to file excise or pension plan returns, you don’t legally need an EIN.
However, you can still get one—and you probably should. Otherwise, you’ll have to use your own social security number to do business. Plus, you’ll likely need an EIN to open a business bank account.
How do I get an EIN?
To get an EIN, you can either apply online or file form SS-4 by mail with the IRS. Getting an EIN is free.
Check out our guide to applying for an EIN.
What is an S-Corp?
An S-Corporation is a federal tax election. Registered business entities like LLCs and corporations start out with a default tax status, but can file paperwork with the IRS to be taxed as an S-Corp. Like LLCs, S-Corps are taxed as pass-through entities. Like corporations, S-Corps can make distributions that aren’t subject to the 15.3% self-employment tax.
Learn more about the S-Corp tax election.
What is a C-Corp?
A C-corporation is the default federal tax election assigned to corporations. Most corporations are taxed as C-Corps, but LLCs can also apply for C-Corp tax designation by filing paperwork with the IRS. C-corps file federal corporate income taxes and state corporate income taxes. C-Corps can pay their shareholders in distributions, and the shareholders report those profits on their personal tax returns.
Learn more about the C-Corp tax election.
Louisiana State Business Taxes
Louisiana has a graduated income tax filing for its corporations based on their net income during the year. Here’s how it’s broken down:
|
Louisiana Corporate Rate of Tax |
Taxable Income |
|
4% |
$25,000 |
|
5% |
on next $25,000 |
|
6% |
on next $50,000 |
|
7% |
on next $100,000 |
|
8% |
any excess over $200,000 |
There is also a corporate franchise tax in Louisiana of $1.50 for each $1,000, but that changes in 2023 to $2.75 for each $1,000. There’s a $110 initial corporation franchise tax as well.
Local Louisiana Business Taxes
Each parish in Louisiana has its own local sales tax rate you’ll have to pay on top of state taxes, but it maxes out at 7%. For example, Slidell has a 4.45% local sales tax rate, while Mandeville has a slightly higher sales tax rate of 4.75%.
10. Build Your Business Website
If you want Louisianians to find your business, they have to be able to find you online. This means you’ll need a website, a business email account, and social media accounts. Don’t worry if you’re not especially tech-savvy—you don’t have to be a web developer or an influencer to establish a robust online presence. You’ll just need the following:
-
- Domain name. Your domain is the address where your website will live. You’ll want a domain name that is short, unique, local, and—most importantly—available. If your domain is trademarked, you could face legal trouble.
- Domain registrar. Once you’ve decided on a domain name, you’ll want to register it with a domain registrar. Some domains are more expensive than others. Some domain registrars also offer hosting and most will provide you with a business email that includes your domain name (“[email protected]”).
- SSL certificate. An SSL certificate signals to your users that your website is secure. If your website will use forms—like a sign-up form or a “contact us” form—an SSL certificate is critical. But even if you don’t you use forms, you’ll still probably want one—it allows an encrypted connection, which means your users’ data is transported securely. There are several types of SSL certificates, and you can often get one through your domain registrar.
- Site design. The easiest option is to use a free website creation tool—there are a number of free options available. Most are easy even for a newcomer to use, with styles and built-in templates. For a more custom design, you can hire a web designer to work on your website, but this will be much more expensive.
11. Apply for Trademarks
A trademark is a design, symbol, word, phrase—or any combination thereof—that represents a brand’s goods or services exclusively. Only some businesses register trademarks.
You can apply to register your trademark with the state of Louisiana or federally with the U.S. Patent and Trademark Office (USPTO). Registering your trademark in Louisiana is cheaper and easier than registering with the USPTO, but doing so only protects your trademark in Louisiana.
You can only register a trademark once you’ve started using it (so slap it on that website you just made). Keep in mind, not all applications are approved. Trademark law is complex, and the strength of a trademark application (and the trademark itself) depends on many factors.
Our attorneys can review your application, offer advice, and prepare and submit the application for you—Check out our Trademark Service.
How do I register a trademark in Louisiana?
To register a trademark in Louisiana, you’ll need to file an Application to Register Trade Name Trademark or Service Mark ($75). This is the same form you would use to register a DBA. You’ll need to include the date of when the trademark was first used. You can’t register a trademark before you use it. Note that registering your trademark with the Louisiana Secretary of State only protects your trademark in Louisiana.
Can I register a trademark before I use it?
No. But you can file an application with the USPTO under Intent-to-Use status. This gets your application in line before you’ve actually used the mark, which could be helpful if you’re worried someone else might register your mark before you’ve had a chance to use it.
For your trademark to become official, you’ll eventually need to show proof that you’re using it. An Intent-to-Use application buys you some time to do that.
Learn more about filing an Intent-to-Use Trademark.
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