How to Incorporate in Louisiana vs. How to Start a Louisiana LLC

A Guide to Choosing the Best Business Entity in Louisiana

Are you interested in starting a business in Louisiana, but not sure if you should form an LLC or start a corporation? Active Filings has the guide for you! We’ll walk you through the advantages and disadvantages of incorporating or forming an LLC in Louisiana. Throughout this Louisiana-specific corporation and LLC formation guide, you’ll discover exactly how to form either an LLC or corporation in Louisiana, and learn the disadvantages and advantages of each business type.

Then, after choosing which business formation best meets your needs, you can hire Active Filings to incorporate your business in Louisiana for you. We’ll streamline the process and make it painless. Our starter package begins at only $25 (plus Louisiana fees), and we’re sure that you’ll find out in no time why Active Filings is America’s most reliable business incorporation service.

Hire us to form your LLC or Corporation in Louisiana!

Louisiana LLCs vs. Louisiana Corporations (Which is Better)

People looking to start a business often ask whether they should set up an LLC or incorporate for their new venture. Like everything else in life, the answer depends. Below you’ll find the three factors we think will help you make an informed decision.

  • Ease of maintenance
    LLCs have the appeal of providing entrepreneurs lower overall annual maintenance and paperwork, creating a big selling point for the LLC structure. Corporations require annual meetings, directors meetings, recorded meeting minutes, and a notable amount of paperwork, while LLCs have little to no maintenance of this type. LLCs not only require less resolutions, but can make executive decisions without the need to hold an official meeting.
  • Desired tax structure
    Unlike a corporation, which must pay its own taxes, LLCs are known as pass-through entities, meaning their tax structure is designed to have its profits, losses, credits, and expenses pass directly through to the owners, who report them on their personal income tax returns (similar to if the owners had a partnership or sole proprietorship). Corporations have a default tax structure known as the C corporation. This structure imposes a double-taxation, where the net income is initially taxed, and then taxed a second time as personal income after the profits and losses are distributed to the shareholders. At first glance, double taxation may seem like a downside, but for the right business it can provide advantages, such as reinvesting profits into the business.
  • Investors
    Investors and shareholders often prefer doing business with corporations. The structure of a corporation is reputable and familiar. Investors know exactly where their time and money will be going with a corporation. LLCs can still be divided into percentages for members, but there is more trust behind the prominence of investing in stock within a corporation. Consider a corporation if you are serious about attracting investors.

Advantages and Disadvantages of Louisiana LLCs and Corporations

We’ve already broken down the differences between an LLC and a corporation, we’re going to dig a bit deeper into the pros and cons of forming a business in Louisiana.

  • Exorbitant Sales Tax
    In 2019, Lake Providence, Louisiana had the distinction of most expensive sales tax city in the country with a 12% combined state and city rate. The state’s largest and most notorious (and fun) city, New Orleans, sees almost 10% combined sales tax. High sales taxes hurt consumers and business alike, as businesses have to pass the costs of purchasing goods to the consumer. Overall the state has an average sales tax of 9.98%. Compare that with a state like Alaska that levies an average tax of 1.7%.
  • Jobs Program and Tax Rebate
    Louisiana is serious about attracting business to the state. The stat offers cash rebates of ranging from 4% to 6% on 80% of annual gross payroll of new direct jobs that meet wage requirements for a term of up to 10 years.  The State also has the ability to offer either a 4% state sales and use tax rebate on capital expenditures or a 1.5% project facility expense rebate on the total capital investment, excluding tax exempted items.
  • Corporate Income Tax
    With a top tax of 8% on corporate profits, Louisiana is really hitting big business hard.
  • Low Cost Annual Report
    Both LLCs and corporations pay the same price, $35 (online) or $30 by mail. Lots of states charge more, much more, and it can be seen as a cash grab, but with Louisiana the Annual Report fee really feels like a filing fee, and won’t break the bank for even the lowest cost business.

How to Incorporate in Louisiana

Looking to officially start your Louisiana corporation? Here’s how you’ll do it. First file your Articles of Incorporation with Louisiana’s Commercial Division. You can file the document online or by mail. The Articles of Incorporation cost $75 to file.

You’ll notice, when filing out the form(s), that Louisiana asks for a lot of information. They want names and addresses, which means these important tidbits of info become public record. Hire Active Filings and use our information instead. Just because you’re starting a business doesn’t mean you don’t deserve some privacy.

Your name must include “Corporation,” “Incorporated,” “Company,” “Limited” or an abbreviation of one of these words. Think Walmart, Inc.

You have two choices for your business purpose. You can select the general business purpose of “engaging in any lawful business or activity,” or you can write your own, more specific purpose like “Alvin’s Alligator Co., plans to sell the best alligator cheesecake anyone has ever had.” But seriously, most corporations choose the general purpose so as not to limit their business options. Also everyone knows Jacques-Imo’s has the best alligator cheesecake!

How long do you want your business to continue? Most people choose “perpetual,” but you can always add a set date for your company to be dissolved.

You must create at least one share of stock.

Assign a face value to your authorized share or shares.

This is the person tasked with signing and submitting your Articles. Hire Active Filings and we’ll be your incorporators.

This Louisiana street address is where your registered agent will be available to accept any service of process. It just so happens Active Filings has a local street address. Hire us and use it!

Keep it simple with one address. Hire Active Filings and use ours. Otherwise this is the address that gets regular mail, not legal notifications, as those go to your assigned registered agent.

Your registered agent accepts service of process at the registered office. Include the address here, or keep it simple with Active Filings and use ours.

List the names and addresses of your initial directors.

Louisiana law (LA Rev Stat § 12:1-832) protects protect directors and officers, but you can remove that protection if you wish. Here is where you’d enter that information.

How to Start an LLC in Louisiana

Looking to officially start your Louisiana LLC? Here’s how you’ll do it. First file your Articles of Organization with Louisiana’s Commercial Division. You can file the document online or by mail. The Articles cost $100 to file.

You’ll notice, when filing out the form(s), that Louisiana asks for a lot of information. They want names and addresses, which means these important tidbits of info become public record. Hire Active Filings and use our information instead. Just because you’re starting a business doesn’t mean you don’t deserve some privacy.

 

Louisiana requires both Articles of Organization and an Initial Report to be submitted together. The requirements below are spread out over both documents. If filing online, you also have the option of including additional tax information so that you can register with the state tax and employment departments.

Your company name has to include “Limited Company,” “Limited Liability Company” or an abbreviation. Keep it short and sweet with a simple LLC. Example: The Cajun Tap Dance Studio, LLC.

Most LLCs will check the box “engaging in any lawful activity,” but you can choose to limit your business activities if you want. This is your chance to do that.

Have an exit date in mind? Put that date here, otherwise just leave this blank, as most LLCs don’t have a self-destruct date.

This is the address where you want the state to send all legal documents. If you hire us, you can use our address and never worry about missing an important mailing again.

Your registered agent receives all of the legal mailings from the state. Hire us and we’ll be your registered agent, or you can choose to be your own.

If your LLC is managed by its members, you’ll include the names and addresses of the members. If your LLC is managed by managers, you’ll include the names and addresses of the managers. Most LLCs are member-managed, but maybe you want to relax and hire someone else to run your business. Nothing wrong with sipping a daiquiri poolside and not having to go into work!

Two people need to sign your Articles: your registered agent and your organizer. An organizer is just the person filling out and submitting your Articles. It doesn’t actually have to be anyone in the LLC. When you hire Active Filings, we’ll be your organizer.

Louisiana Corporation and LLC Maintenance

To keep your business in good standing with the state of Louisiana, you’ll have to jump through a few hoops. One of these hoops is filing your Annual Report.
How do I file my Annual Report?
You can file your Louisiana Annual Report online or by mail. Either way, you’ll need to visit Louisiana’s Secretary of State website. When filling out the annual report, you’ll include the following information and update it if necessary:
Name and address of the company.
Name and address of your registered agent in Louisiana.
Names and addresses of members/managers or directors/officers.

To file online:
-On the state website, go to the Louisiana geauxBIZ page. Log into your account or create one.
-Once you are successfully logged in, click “Getting Started.” Then, select “File an amendment, such as an annual report, with the Louisiana Secretary of State,” and then click “Next.”
-You will need to enter your charter number. Don’t know what your number is? You can easily find it by searching the Louisiana Business Database.
-On your business’ details page, click “File Annual Report.” Follow the instructions to complete the report.

To file by mail:
-Go to the Louisiana Business Database page.
-Enter in your business name in the search box and click “Search.”
-Find your business and click the “details” button next to your business name.
-Click on “Print Annual Report Form for Filing” at the top of your screen.

Mailing your report to:

Commercial Division
P.O. Box 94125
Baton Rouge, LA 70804-9125

How much does it cost?
All businesses in Louisiana pay $35 when filing online, or $30 by mail. Non-profits pay $15 online, and $10 by mail.

When is it due?
Louisiana reports are filed every year. All reports are due by the anniversary date of when the business was originally formed. For example, if you formed your business on September 20th, your due date would be September 20th of the following year. Hire Active Filings and never worry about missing your due date.

Understanding Louisiana Taxes

Let’s be honest, taxes are like lima beans. Not everyone enjoys them. They are, however, an integral part of successfully doing business in America. While we’re not tax professionals, we definitely will do our best to try and explain what kind of taxes your business will be expected to pay.

Corporations: The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This is what we mean when we say corporations face “double taxation.” If you are forming a corporation, you’ll want to pay attention to not only the state’s corporate tax, but also the state’s income tax rate, as you will be on the hook for both.

LLCs: For income tax purposes, an LLC with only one member is treated as an entity disregarded as separate from its owner, unless it files Form 8832 and elects to be treated as a corporation. However, for purposes of employment tax and certain excise taxes, an LLC with only one member is still considered a separate entity. One of the most significant benefits of an LLC is that of pass-through taxes. LLC owners don’t have to file a corporate tax return. An owner simply reports their share of profit and loss on their individual tax return. This prevents double taxation, your business paying taxes and you paying taxes.

What is the corporate income tax in Louisiana?
$0+ 4%
$25,000 5%
$50,000+ 6%
$100,000+ 7%
$200,000+ 8%

What is the personal income tax in Louisiana?
0-12,500 2%
12,500-50,000 4%
50,000 + 6%

What forms will I need to file?
Corporations will file Form CIFT620
LLCs will file Form IT540

When are my taxes due?
Your business returns are due as usual, April 15th for all calendar year filers. Personal returns are another matter. You get one month extra to file your personal returns, which should be a benefit to LLCs who don’t have to worry about the corporate tax schedule. Tax returns are due by the 15th day of the 5th month following the end of the tax year. For calendar year taxpayers, this date is May 15th.

Can I get an extension for my taxes?
If you cannot file on time, you can get a Louisiana tax extension. A Louisiana personal extension will give you 6 more months to file, moving the due date to November 15th (for calendar year filers). Your extension request must be submitted by the original deadline of your return (May 15th). It should be noted that Louisiana no longer provides or accepts paper extension requests. All Louisiana taxpayers are now required to apply for a tax extension electronically.

Hire us to form your LLC or Corporation in Louisiana!