If you own a business that was created in a state other than Louisiana, you will need to qualify or register that business in Louisiana if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Louisiana) limited liability company (LLC) to do business in Louisiana.
For Louisiana purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Louisiana. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in Arizona is a foreign LLC in Colorado.
According to Louisiana’s LLC Act, you are required to register your foreign company with the state of Louisiana if you are “transacting business” in Louisiana. What does this mean? Well, like most states, Louisiana’s LLC Act does not specifically define the phrase “transacting business” in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
Certain exceptions may apply and the rules can get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo’s articles on Internet Sales Tax: A 50-State Guide to State Laws.
Like most states, Louisiana’s LLC Act specifies certain activities that do not constitute transacting business in the state. The items listed include:
The Act also specifically states that this list is not exclusive; other activities also may be exempt. For the full, legal description of each of the listed items, check Section 12:1343 of the Louisiana Revised Statutes.
If your LLC’s only activity in Louisiana is one or more of the listed items, you should not need to register with the state.
To register your business in Louisiana, you must file an Application for Authority to Transact Business in Louisianawith the Louisiana Secretary of State (SOS). You can download a copy of the application form from the SOS website. (The form is also referred to by the SOS as Application of Foreign Limited Liability Company.)
To complete the form, you must provide more or less the same information that you need to create an LLC in your home state. More specifically, for a Louisiana application for registration, you need to provide:
You must include a certificate of existence or certificate of good standing with your application. The certificate should be issued by the Secretary of State (or equivalent official) in the state where your LLC is organized. The certificate must be dated within 90 days of the date you submit your application. The LLC Act states that you must deliver duplicate copies of the application to the Secretary of State. The filing fee is $150.
If your LLC transacts business in Louisiana without authority, it cannot bring a lawsuit in any of the state’s courts. In addition, the LLC will be liable for all fees and taxes that should have been paid if the LLC had properly registered, plus penalties. However, not being registered does not invalidate your LLC’s contracts or prevent it from defending a lawsuit in Louisiana. Also, a member of the LLC does not become liable for the LLC’s obligations solely if the LLC fails to obtain a certificate of authority.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Louisiana are similar. You will, however, have to use a different application form (Form #326). See the Louisiana Secretary of State website for forms, information, and filing instructions for registering a foreign corporation in Louisiana.