How to Start a Business in Louisiana (Updated 2023)

If you want to start a business in Louisiana, you have some basic tasks to complete before you get your business up and running. Building your business from the ground up can be exciting. But it's important to complete each step to make sure your business is legal and ready to serve customers.

Here are the key steps to starting your own business in Louisiana.

1. Choose a Business Idea

Every great business starts with a great idea. Take time to find your great idea. At this stage, take into consideration your own interests, skills, resources, and availability. You should also think about the needs and demands of your community when determining whether your business will be profitable. (For more in-depth guidance, read our article on how to evaluate business ideas.)

When you have your idea, create a business plan. Use your business plan to get a better idea of:

• the startup costs
• the competition
• strategies for turning a profit, and
• financing options.

Investors and lenders will want to review your business plan before providing financial assistance. A business plan will also provide a great roadmap to look back on as your business grows and changes.

2. Decide on a Business Legal Structure

Once you have a business idea, you need to choose a structure for your business. The business structure you choose will determine how your business is managed and your taxes are filed. Your structure will also decide your personal liability for business debts.

The most common legal structures for a small business are:

• sole proprietorships
• partnerships
• limited liability companies (LLCs), and
• corporations.

Apart from these common types of businesses, you can also form a limited partnership (called a "partnership in commendam" in Louisiana) or a limited liability partnership (LLP). If you provide special types of professional services, then you can also form specific professional corporations and professional LLCs such as a professional medical corporation or professional dental LLC.

Some businesses decide to form S corporations, which are tax entities. S corporations are only created when you form a corporation, LLC, or other qualified business entity and you elect to be taxed as an S corporation with the IRS.

Read our article on how to choose the best ownership structure for your business for more.

3. Choose a Name for Your Louisiana Business

You must pick a name for your business. You'll want to pick a name that fits your business and is unique and registrable. Louisiana requires you to select a name that's distinguishable—that is, different enough—from any business name that's already on file with the Louisiana Secretary of State (SOS). You can search by business name on the SOS website.

Entity name designators: In your business name, you'll need to include words that indicate what entity type you have—for example, you can include "inc." for corporations and "LLC" for LLCs. You can find out more about these naming requirements in our Louisiana LLC article.

Reserving your business name: You can reserve a name for 120 days by filing an application for reservation by mail or online with the SOS. As of 2023, the filing fee is $25.

Filing an assumed name certificate: If you plan to do business using a name that's different from your legal name, then you must register that name—called an "assumed name," "trade name," or "DBA" (short for "doing business as"). Sole proprietors and general partnerships that use business names that don't include the owners' full personal names must register their trade name with their parish. A corporation, LLC, or other incorporated entity should register their DBA by filing an Application to Register Trade Name, Trademark, or Service Mark with the SOS. Louisiana trade name laws are extensive so you should consult a Louisiana lawyer if you have questions. (La. Rev. Stat. § 51:281 (2023).)

If you do business online, you might want to register your business name as a domain name. In addition, to avoid trademark infringement issues, you should do a federal and state trademark search to make sure the name you want to use isn't the same as or too similar to a name already in use.

4. Register Your Business Entity With Louisiana Secretary of State

Your business registration filing requirements depend on your type of business. You can register your business online through Louisiana geauxBIZ. You can also register by mail or in person. You can find the required documents on the forms and fee section of the SOS website.

• Sole proprietorship: You don't need to file any formation paperwork to establish a sole proprietorship in Louisiana. You become a sole proprietor when you start selling products or providing services.
• Partnership: You don't need to file any organizational documents with the state to create a partnership. But you can choose to file a partnership registration form with the SOS. Although not legally required, all partnerships should have a written partnership agreement that lays out how the partnership will be run and the profits divided. The partnership agreement can be very helpful if there's ever a dispute among the partners.
• Limited partnership: File a Louisiana Partnership Registration Form with the SOS.
• LLP: File an Application of a Registered Limited Liability Partnership with the SOS.
• LLC: To create a Louisiana LLC, you must file articles of organization with the SOS. You must also appoint a registered agent—an individual agent or corporate agent for service of process in Louisiana. In addition, while not required by law, you also should prepare an operating agreement to establish the basic rules about how your LLC will operate. You don't need to file the operating agreement with the state.
• Corporation: To start a corporation in Louisiana, you must file articles of incorporation with the SOS. Although not legally required, you also should prepare bylaws to establish your corporation's internal operating rules.

If you want to elect S corporation tax status, then you must file IRS Form 2553, Election by a Small Business Corporation with the IRS after you register your chosen business entity with the state.

5. Apply for Louisiana Licenses and Permits

Your businesses will likely need to apply for at least one license, permit, or registration. You can find more detailed information in our article on Louisiana business licenses.

Tax registration. If you'll be selling goods in Louisiana, you must register with the Louisiana Department of Revenue (LDR) to collect sales tax. If your business will have employees, you need to register for withholding tax. You can register with the LDR and receive your revenue account number by completing the registration application online via the Louisiana Taxpayer Access Point (LaTAP).

Employer identification number (EIN). If your business has employees or is taxed separately from you, you must obtain an EIN from the IRS. Even if you're not required to get an EIN, there are often business reasons for doing so. For instance, banks often require an EIN to open an account in the business's name and other companies you do business with could require an EIN to process payments. You can get an EIN by completing an online application on the IRS website. There's no filing fee.

Regulatory licenses and permits. You might need licenses and permits related to specific industries, building and construction, the environment, and health and safety, among other areas. Through the geauxBIZ portal, you can create a business license checklist. For information about local licenses and permits, check the websites for any cities, parishes, or counties where you'll do business.

Professional and occupational licenses. The licenses section of the state government's website lists these various professions and occupations that require licenses. The list includes links to the regulatory authority's website where you can learn more.

6. Pick a Business Location and Check Zoning Regulations

One key task in opening a business is picking a location and checking local zoning regulations. Before you commit to a location, verify that the spot is zoned for your type of business. You can find zoning regulations for your town or city by reviewing your local ordinances and contacting your town's zoning or planning department.

You should also take time to calculate the costs of running your business in the desired spot. Weigh the benefits of the location against the operating costs. Refer back to your business plan to evaluate whether you can afford your desired location during your company's early months. If you lease a commercial space, make sure you negotiate terms that'll work for your business in the long term.

An alternative to opening your business at a new location is running your company out of your home. If you decide to run a home-based business, again, make sure you check your local zoning laws. You should also review your lease (if you rent your home) and homeowners association rules (if applicable)—either of which could ban some or all home businesses.

7. Register and Report Business Taxes

Louisiana taxes every kind of business. Your tax obligations will depend on your legal and tax structure. You can file and pay your taxes online with the LDR.

Sole proprietorships: Sole proprietors pay state taxes on business income as part of their personal state income tax returns (Form IT-540).

Partnerships: Partners pay state taxes on their share of the partnership income on their personal tax returns. In addition, some Louisiana partnerships also must file Form IT-565, Partnership Return of Income.

LLCs: Members pay state taxes on their share of LLC income on personal tax returns. In addition, the LLC itself might have to file an additional state tax form. Depending on how your LLC is taxed, your business could need to file a partnership return or a corporation return. Louisiana LLCs are also required to file an annual report with the Louisiana SOS. You can find out more in our article on LLC annual filing requirements.

Corporations: Shareholders must pay state taxes on their dividends from the corporation. A shareholder-employee with a salary also must pay state income tax on his or her personal state tax return. Moreover, Louisiana corporations must file and pay corporation income and franchise taxes. And, finally, corporations must file an annual report with the Louisiana SOS.

If you have employees, you must also deal with state employer taxes. Refer to the LDR website and the Louisiana Workforce Commission website for more information on your employer tax obligations.

You should also review IRS Publications 334, Tax Guide for Small Business, and 583, Taxpayers Starting a Business for more on business taxes.

8. Obtain Insurance for Your Louisiana Business

Business insurance can protect your business and your personal assets from unexpected events, such as personal injury lawsuits and natural catastrophes. You should consider getting general liability insurance to protect your business against claims relating to bodily injury or property damage. Your business might also have a need for cyber liability insurance, which typically covers litigation and settlement fees following a data security breach.

You can talk to a business lawyer or an insurance agent about the different coverage options for your business.

For more, see our article on what types of insurance your small business needs.

9. Open a Business Bank Account

No matter the type of business you form, you should think about opening a separate business account to make it easier to track your income and expenses. For some business types, including LLCs and corporations, a separate bank account is necessary to maintain your liability protection.

Additional Help With Starting Your Louisiana Business

The SOS has a lot of information and resources to help small businesses find the answers they need. Take a look at the frequently asked questions page under the file business documents section of the SOS website. You can find answers on topics covering name reservations, DBAs, state sales tax identification numbers, annual reports, and more.

The Louisiana Economic Development (LED) website offers information and programs to entrepreneurs on how to start and grow a business in Louisiana. The LED website includes a link to the Louisiana Business Hub where you can find resources specific to your industry, location, and business stage.