By: Bayou Trésors Staff
You have a great idea for a business, you’re an excellent leader, and you’ve created a business plan.
So, what do you do next?
You may want to set up shop as a Limited liability company or LLC.
The Internal Revenue Service (IRS) defines an LLC as, “a business structure allowed by state statute.”
Other business structures include sole proprietorships, partnerships, corporations, and S corporations.
When it comes to LLCs, every state has its own rules related to their oversight and functioning.
The owners of LLCs are called “members” and these owners or members don’t typically need to be one specific person. The IRS says, “members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single-member” LLCs, those having only one owner.”
It adds that, “A few types of businesses generally cannot be LLCs, such as banks and insurance companies.”
One of the major advantages of choosing an LLC structure for your business is that because it’s a separate entity, the owners of the company have limited liability. This means their personal assets of are generally safe from any lawsuits or debts made against the LLC. Essentially, the member’s risk of financial loss is limited to the amount of funds the member actually invests in the business.
So, if you’re in Louisiana and you’re not interested in opening a bank or insurance company, you might want to check out this overview detailing how an LLC is established:
Choose a unique name for your company.
As you select a name, keep these requirements in mind:
Appoint a registered agent for your LLC.
The registered agent can be you, an employee, or a person/entity that offers a registered agent service and is authorized to receive service of process and other official legal documents and notices on behalf of your LLC.
Get a nine-digit Employer Identification Number (EIN) from the IRS.
An EIN is necessary because it’s what the U.S. government uses to identify a business entity.
You can click here to apply for an EIN on the IRS’s website.
File the Louisiana LLC Articles of Organization with the Secretary of State.
The Articles of Organization clarifies basic information about your LLC and officially establishes it as an entity.
Prepare the Articles of Organization by clicking here and then filing them with the Secretary of the State online or by mail.
(optional) Create a Louisiana LLC Operating Agreement.
An official operating agreement’s purpose is to outline the company’s ownership and operating procedures to ensure that all business owners are on the same page. It’s not required in Louisiana but it may be a good idea to have. Without an operating agreement, should a dispute arise that needs to be settled in court, a judge will base their rulings on state law, instead of on what’s best interest for the LLC and its members.
Keep your certificate from the state in a safe place.
The state will send you a certificate confirming the LLC’s existence and validity. It can help you in obtaining business licenses, and business bank account, so keep it in a safe place.
Register with the Louisiana Department of Revenue.
Register with the Louisiana Department of Revenue (LDR) to collect sales tax and if your company will have employees, you’ll also register with the LDR for employer withholding taxes. You can do both online via the Business Registration page of the LDR website.
Register with geauxBIZ and create a business license checklist.
Register with the Secretary of State’s geauxBIZ website and create a business license checklist. This will provide you with information about local licenses and permits you may need for your city and parish.
Register your business with your parish, pay for an occupational license, and begin paying sales taxes.
Visit Parish E-File to register your business online with your city/Parish and get set up to pay for an occupational license and to begin paying sales taxes. You can choose to pay sales taxes on a monthly basis.
Hopefully, the steps above will come in handy as you set up your new company.