Do you have a great business idea, but you’re not quite sure how to get from the idea phase into owning and operating your own business in Louisiana? You’ve come to the right place! There are many important aspects to running a company, and like any other state, Louisiana has its own rules and regulations to consider.
In this guide to starting a business in Louisiana, we’ll discuss all the relevant details to business ownership in this state. By the time you’re done reading, we think you’ll have a strong grasp on the necessary steps involved.
How to Start a Business in Louisiana (in 10 Steps)
1) Create a Business Plan
The first step to creating any business in any state is to plan what products and services you’ll sell, set your operational budget, and figure out how you want to market your company.
Your business plan doesn’t have to be fancy at all, you just need to make sure you spend enough time considering these important aspects before you actually launch your business. To get started, SBA.gov has a great free tool.
2) Choose a Name
The name of your business is an extremely important attribute because it’s often how you make your first impression to potential customers.
Legal Considerations
Depending on whether you choose to form a corporation or a limited liability company, there are some legal aspects as well (for example, an LLC must include “LLC” or “limited liability company” in the business name, and a corporation must include “incorporated,” “corporation,” “Inc.,” or “Corp.”).
Explanatory Naming
Beyond the basic legalities, you should focus on clearly identifying what your company does in your business name. You can also consider incorporating your values into your business name, like using the word “green” to denote environmental friendliness.
Something You Love
Finally, choose a name that you personally like and take pride in, and one that both sounds good when spoken aloud and looks good on paper.
One big piece of advice we have for naming a business is that you shouldn’t get too focused on one idea until you either form your company or reserve the name.
In Louisiana, you can run a business name search via the Secretary of State’s website. To reserve a business name, you will need to file a “Company Name Reservation” application. This application can be filled out online and takes about 5 business days to process, after which your name will be reserved for 120 days. To file a Company Name Reservation application, simply create an account at this link.
3) Decide on a Registered Agent
A Louisiana registered agent is the person or service in charge of receiving your important government documents, and forwarding them to you.
According to the Louisiana Secretary of State, “all business registrations with the Secretary of State require, by law, an agent with a physical address in Louisiana. An agent, or as it is sometimes called, registered agent, can be almost anyone of legal age and a legal resident of Louisiana. An agent is someone that is designated to receive legal documents served on the business in the event of administrative or legal action. An agent has an obligation to forward the ‘legal documents’ to the business. An agent’s name and address are publically available and are displayed on the Secretary of State’s website. Individuals that can be designated to be an agent include, but are not limited to, an organizer of a business, a member of an LLC, an employee of the business, an attorney or an accountant.”
This position is vital to any Louisiana business because without a registered agent, you could lose your good standing with the state, see your business dissolved by the state, or even remain unaware of a lawsuit progressing against your company.
The Secretary of State does not provide a public list of active registered agents. However, if you require assistance finding a commercial registered agent, you can send a request to the Secretary of State’s office here.
Rocket Tip: We recommend designating an online service to handle these requirements. This eliminates junk mail and keeps your personal and/or business address off public record. ZenBusiness and IncFile both offer a free registered agent service when you use them to form a business online.
4) Choose a Structure and Form Your Business
If you’re just operating a sole proprietorship or general partnership, you don’t need this step (or several of the others in this guide, including selecting a registered agent), because those business structures don’t require any sort of formal formation process.
This leaves two main options: the corporation and the limited liability company.
The LLC is the more common option, partially because it’s much simpler. There’s not much paperwork involved, and the maintenance requirements basically amount to an annual report. Furthermore, LLC owners still receive the personal asset protection that makes a corporation so attractive as a business type in the first place. For more specific information about starting an LLC, check out our full article on the topic.
For some entrepreneurs, the corporation is the better choice. There’s far more effort involved both in forming one and in maintaining it with the state of Louisiana, but for larger businesses they’re usually the better option, as they allow for more growth and investment than LLCs generally do.
If you would like to know more, check out our “LLC vs Corporation: What Is the Difference?” article. No matter which business structure you choose to form, you can find all the relevant forms on the Iowa Secretary of State’s website or have a professional business formation website do it for you.
5) Take Care of Tax Obligations
The vast majority of businesses operating in Louisiana will need a federal tax ID number (EIN), which can be acquired from the IRS.
According to the Louisiana Department of Revenue, “an LLC is treated and taxed in the same manner for Louisiana income tax purposes as it is treated and taxed for federal income tax purposes. If the LLC is taxed as a corporation for federal income tax purposes, the LLC will be taxed as a corporation for Louisiana income tax purposes. If the LLC is considered a partnership for federal income tax purposes, which is the most common situation, the LLC is treated as a partnership for Louisiana income tax purposes.”
On the state level, there are a variety of tax registration requirements that may or may not apply to your company, depending on the nature of your business. These include taxes like corporate income tax, franchise tax, consumer use tax, telecommunication tax, etc.
Thankfully, Louisiana makes the registration process easy for businesses. With the GeauxBiz platform, you can register your business and find out more information about your business’ specific tax obligations.
Keep in mind that your city and/or county may have taxation requirements as well, so make sure to check with them to make sure you aren’t missing anything.
Here’s some business resources for each of the largest cities in Louisiana:
6) Acquire Business Licenses and Permits
Some states have statewide business licenses that every company needs to acquire, but Louisiana does not.
Still, there are hundreds of state-level, industry-specific licenses and permits that may apply to your company depending on the nature of your business. In Louisiana, you can find out exactly which licenses or permits apply to your business on the GeauxBiz platform. Simply create an account, click “Getting Started,” and select “produce a list of possible federal, state and local licenses and permits required for your business.”
Much like with taxation issues, there’s also the matter of local licenses to consider. You can learn more about county-level occupational licenses right here.
7) Obtain Required Insurance Policies
In order to operate a business with employees in the state of Louisiana, you are legally required to obtain workers’ compensation insurance. Depending on your industry and the nature of your business, you may also need to provide health coverage or some form of liability insurance. Though it is not mandatory, the Louisiana Department of Insurance recommends getting a Business Owner’s Policy (BOP). These plans generally include liability, general auto, property, and workers’ compensation insurance.
You can learn more about these insurance types and how they apply to Louisiana businesses by visiting the Louisiana Department of Insurance website.
It is the employer’s responsibility to get these policies to protect your employees, regardless of what line of business you’re in. Of course, it’s probably a good idea to acquire industry-specific policies to protect your company in other ways, but unemployment and workers’ comp are the ones strictly required by law.
8) Open a Business Bank Account
Whether you start a limited liability company or a corporation, you’ll need to keep your business and personal assets separated.
This is where opening a business bank account comes in. While having a separate checking account for your company isn’t a legal requirement, it makes separating your assets considerably easier, and we always advise that any business owner does so.
9) Develop a Business Website
In this day and age, even strictly local businesses should have a website, because the internet is your first point of contact for many of your customers. Your site doesn’t need to be fancy, but you should put some thought into your domain name, and make sure it’s something memorable and easy to type without misspellings.
If you’re not comfortable designing a site yourself ― and if you also don’t have the budget to hire a professional designer ― there are plenty of website builder tools that can help you put together a solid website. WordPress and Weebly are very easy to use.
10) Don’t Be Afraid to Ask for Help
If you run into problems with any of the steps outlined in this guide, remember that you can always find help.
In this state, the Louisiana Small Business Development Center exists solely to (in their own words) “offer high-quality technical assistance to existing and start-up small businesses, and to small business entrepreneurs in Louisiana at no cost to the client.” With 10 locations across Louisiana, the SBDC is ready and willing to help if you need assistance.
Another excellent resource is the Louisiana chapter of the U.S. Small Business Administration. Their website has information regarding small business events, business resources, press releases, SBA programs, and more.
Conclusion
While there are several vital steps in the process of starting a business in Louisiana, taken individually these steps aren’t terribly complex.
It can seem overwhelming if you consider the entire process all at once, but if you break down these steps and take care of them one at a time, they’re all quite manageable. Keep in mind that you don’t need to go it alone with the DIY option ― if this process becomes overwhelming, or if you simply don’t have the time and energy to devote to these steps ― assistance is available.