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Embarking on the journey to establish your own Limited Liability Company (LLC) in Louisiana unveils a path peppered with various costs that extend beyond the mere filing of initial paperwork. However, don’t let the prospect of expenses discourage you, for the road to LLC formation doesn’t have to be as financially daunting as it may seem at first glance.
In fact, equipped with the right knowledge and resources, such as the invaluable services of ZenBusiness, there are strategic avenues available to navigate this process while optimizing cost-efficiency.
In the following exploration, we’ll break down the components that constitute the cost to form an LLC in Louisiana, shedding light on ways to make prudent and informed decisions for your budding business.
What Is the Cost of Forming an LLC in Louisiana?
The primary expense associated with initiating an LLC in Louisiana involves a $100 fee, which is necessary for electronically submitting your LLC’s Articles of Organization to the Louisiana Secretary of State.
Here’s the LLC Cost Guide for all US States:
Louisiana Foreign LLC Formation Costs
If you currently possess an LLC that’s officially registered in a different state and wish to extend your business operations into Louisiana, it’s imperative to enlist your existing LLC as a foreign entity in the state of Louisiana.
The fee for the registration of a foreign LLC in Louisiana amounts to $150. This process entails the submission of an Application for Authority to Conduct Business in Louisiana (Form 972) in order to successfully register a foreign LLC within the state.
Annual Cost for LLCs in Louisiana
When contemplating the establishment of a Limited Liability Company (LLC) in Louisiana, comprehending the continuous financial obligations tied to LLC maintenance holds paramount importance. Factoring in these expenses allows for a comprehensive estimation of the cumulative costs entailed in operating an LLC within Louisiana.
The key ongoing expenses for a Louisiana LLC encompass the Statutory Agent Fee, which mandates a registered agent for service of process – opting for a professional service may amount to approximately $100 – $300 annually, and the Annual Report, obliging Louisiana LLCs to annually submit a report to the Secretary of State with a corresponding fee of $30 if filed online and $35 if filed by mail.
How Much Does It Cost to Start an LLC in Louisiana With the Best LLC Service?
ZenBusiness LLC Formation Cost
The initial cost for initiating the formation of an LLC in Louisiana amounts to $100, with potential increments based on specific factors. In terms of processing duration, the standard timeline stands at 2 – 3 weeks. However, it’s possible to accelerate this procedure to 5 – 7 days through expedited processing for an additional fee of $50 or to further expedite it to 2 – 3 days at a cost of $100.
ZenBusiness presents a range of three well-structured pricing plans catering to various business formation requirements: Starter, Pro, and Premium.
The Starter option, which comes at no charge apart from state fees, suits fundamental business formation necessities admirably. For a fee of $199 in addition to state fees, the Pro package offers added advantages, including expedited filing and registered agent service.
The Premium plan, priced at $349 plus state fees, represents the most comprehensive choice, encompassing all features of the Pro plan alongside unlimited Worry-Free Compliance, a resource facilitating meticulous adherence to both state and federal regulations.
Furthermore, any plan acquisition entitles customers to a complimentary year of Worry-Free Compliance from ZenBusiness.
Additional Costs When Starting an LLC in Louisiana
Louisiana LLC Name Costs
The expense of naming your Louisiana business ($0) is nonexistent. Your chosen name for your Louisiana LLC will be authorized without any additional charges upon the approval of your Articles of Organization filing by the state.
If you desire to secure your chosen name for a span of 120 days before officially establishing your LLC, you can achieve this by submitting Form 398 and settling the $25 filing fee.
Louisiana Registered Agent Costs
The Louisiana registered agent Fee can be either $0 or $125 per year. Louisiana state law mandates the appointment of a registered agent during the formation of your LLC.
A Louisiana registered agent, whether an individual or a company, serves as the recipient of legal documents and state notifications intended for your LLC. The registered agent must possess a physical address within the state and be accessible during standard business hours.
Opting to serve as your own registered agent or having someone you know to fulfill this role incurs no additional charges.
Alternatively, you have the choice to engage a registered agent service, incurring an annual service fee ranging from $100 to $300. It’s worth noting that these service providers offer supplementary business services and can help safeguard your privacy.
Enlisting a registered agent service becomes particularly advisable:
- If you lack a physical address within Louisiana (as state law mandates the registered agent to possess such an address).
- If you desire to shield your address from public disclosure (certain service providers might allow you to use their address for added privacy, depending on the company you select).
Louisiana Operating Agreement Costs
At no cost, a Louisiana LLC Operating Agreement serves as a written agreement among the members of the LLC. These agreements encompass comprehensive details about the ownership structure of the LLC, its management protocols, and the methodology employed for the distribution of profits.
Both Single-Member and Multi-Member LLCs are advised to construct an Operating Agreement, store it alongside their business documentation, and provide each member with a copy.
It’s commonplace for the majority of websites to levy fees ranging from $50 to $200 for the preparation of LLC Operating Agreements.
Louisiana EIN Cost
The EIN Number, alternately referred to as an Employer Identification Number (EIN) or Federal Employer Identification Number (FEIN), holds no charge.
This unique identifier is employed for purposes such as income tax filing, initiating an LLC bank account, and facilitating employee recruitment (if relevant). While numerous online platforms impose service charges for obtaining an EIN for your LLC, the process can indeed be undertaken without cost.
You have the option to acquire an EIN for your LLC from the Internal Revenue Service (IRS) without incurring any expenses. The online application can be finalized within a matter of minutes.
Louisiana LLC Taxes
The annual expenses for Louisiana LLC owners can significantly fluctuate due to the array of taxes they’re obligated to pay. These encompass:
Federal Income Taxes
When it comes to your Limited Liability Company’s (LLC) federal income taxes, the IRS offers various treatment options.
Single-Member LLCs are considered Disregarded Entities, meaning the IRS doesn’t require the LLC to file a separate federal income tax return. Instead, the owner of the Single-Member LLC is responsible for filing the return and paying the taxes.
Taxation for the LLC depends on the owner’s identity: if an individual owns it, it’s taxed like a Sole Proprietorship, and if owned by a company, it’s treated as a branch/division of the parent company.
Multi-Member LLC Taxes
In the case of an LLC with multiple owners, it’s treated as a Partnership for tax purposes. The LLC needs to submit a 1065 Partnership Return and provide a Schedule K-1 to its owners. Each owner’s share of profits is reported on the K-1, and this income “flows through” to the owners. Taxes on this income are then paid by each owner individually on their personal income tax return (Form 1040).
Husband and Wife LLC Taxes
For husband and wife LLCs in community property states like Louisiana, an option exists to file taxes as a Single-Member LLC, also known as a Qualified Joint Venture, rather than a Multi-Member LLC. This election can be made during the EIN application process or through a request to the IRS if you already have an EIN. If not, the default tax status is that of a Partnership for a husband and wife Louisiana LLC.
Electing Corporate Taxation
Apart from the default tax statuses, an LLC can choose to be taxed like a Corporation. This decision should be made with the guidance of an accountant. There are two types of corporate elections: S-Corporation and C-Corporation.
- S-Corporation Taxation: By filing Form 2553, an LLC can elect to be taxed as an S-Corporation, potentially reducing self-employment taxes, but it’s advisable for established businesses with consistent revenue.
- C-Corporation Taxation: Through Form 8832, an LLC can opt for C-Corporation taxation, which is often beneficial for larger employers seeking healthcare fringe benefits savings, though it’s not commonly chosen.
Louisiana State Income Tax
In Louisiana, tax treatment differs for Single-Member and Multi-Member LLCs. Single-Member LLCs usually don’t file a state-level return, but their owner includes LLC profits or losses in their personal state-level return. Multi-member LLCs might need to file a state-level Partnership return while the owners report profits or losses on their personal state-level returns.
Local Income Tax
Your Louisiana LLC may be subject to local income taxes imposed by your municipality. Seeking professional help to prepare and file local income taxes is recommended, and contacting your municipality directly will help clarify their specific requirements.
Louisiana Sales Tax
When providing services or products to Louisiana consumers, collecting sales tax and obtaining a Seller’s Permit is necessary. This permit, acquired from the Louisiana Department of Revenue (LDR), allows you to charge sales tax. Various terms like resale license, wholesale license, and sales tax permit refer to the same permit. Sales tax registration can be done via the Louisiana Taxpayer Access Point.
Louisiana LLC Payroll Taxes
If your Louisiana LLC employs staff, you must handle payroll taxes, which encompass federal and state income tax withholding, Social Security tax, Medicare tax, Federal Unemployment Taxes (FUTA), State Unemployment Taxes (SUTA), and local/county deductions.
Setting up payroll and managing these taxes can be complex, often necessitating the assistance of a payroll company or an accountant to avoid errors that may result in penalties.
Louisiana LLC Cost FAQs
How Much Does It Cost to Open an LLC in Louisiana?
The initiation of a Louisiana LLC incurs a $100 fee for submitting the requisite Articles of Organization, constituting a one-time payment for the formation documentation. Depending on the nature of your business and its geographical location, certain LLCs might also necessitate a business license in Louisiana, with costs for local business permits differing accordingly.
How Much Does an LLC in Louisiana Cost Per Year?
Louisiana LLCs are obligated to make a yearly payment of $35 for the Annual Report, directed to the Secretary of State, which stands as the sole mandatory annual state fee, ensuring the LLC’s compliance. This requirement applies universally to all Louisiana LLCs.
In addition, if you’ve enlisted a registered agent service, you will also encounter an annual subscription fee, typically around $125 per year. Depending on your business domain and geographical placement, certain LLCs might require a business license in Louisiana, with potential yearly renewal fees for the business permit that need confirmation from your local municipality.
Should I Hire an LLC Formation Service?
While it’s not obligatory to hire a professional service for establishing your Louisiana LLC, you do have the option to manage the formation independently. Yet, for those seeking efficiency and precise filing, enlisting the services of a ZenBusiness is advised.
With a track record of exceptional customer support, they even provide complimentary registered agent services for the initial year, alongside additional offerings like creating an Operating Agreement and handling Annual Report submissions.
In summary, establishing an LLC in Louisiana requires a thoughtful assessment of associated costs. While the state presents a favorable environment for businesses with its regulatory advantages, potential tax benefits, and strategic location, the financial aspects of forming an LLC here encompass filing fees, the appointment of a registered agent, and the potential need for legal or consultancy services.
It’s imperative for entrepreneurs to meticulously balance these expenses against the state’s unique merits, such as its legal framework and regional opportunities, in order to make an informed decision that aligns harmoniously with their business objectives and financial capacity.
- How to Register a Business in Louisiana
- How to Register a Business Name in Louisiana
- Louisiana Anonymous LLC
About the author
Dr. Alexander Sterling, Esq, a distinguished legal scholar with a business law degree and a Doctor of Juridical Science, is a leading expert in business registration and diverse business departments. Renowned for his academic excellence and practical insights, Dr. Sterling guides businesses through legal complexities, offering invaluable expertise in compliance, corporate governance, and registration processes.
As an accomplished author, his forthcoming book is anticipated to be a comprehensive guide for navigating the dynamic intersection of law and business, providing clarity and practical wisdom for entrepreneurs and legal professionals alike. With a commitment to legal excellence, Dr. Alexander Sterling, Esq, is a trusted authority dedicated to empowering businesses within the ever-evolving legal landscape.