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Diving into setting up your own Limited Liability Company (LLC) in Louisiana, you’ll encounter a slew of costs that go beyond just the initial paperwork. But don’t sweat it; the financial road to forming your LLC doesn’t have to look scary.
Armed with the right know-how and tools like Tailor Brands, you can find clever ways to keep expenses in check while still sailing smoothly through the setup process.
Let’s delve into what it actually costs to get your LLC off the ground in Louisiana. We’ll highlight some smart moves you can make to ensure your burgeoning enterprise gets the best financial start possible.
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What Is the Cost of Forming an LLC in Louisiana?
Kicking off an LLC in Louisiana starts with a $100 fee. This covers the cost of electronically sending your LLC’s Articles of Organization to the Louisiana Secretary of State.
Louisiana Foreign LLC Formation Costs
If your LLC is registered in another state and you’re planning to expand your business into Louisiana, you must register your existing LLC as a foreign entity there.
The LLC cost for this registration is $150. This fee allows you to submit an Application for Authority to Conduct Business in Louisiana (Form 972), which is necessary to recognize your foreign LLC in the state officially.
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Annual Cost for LLCs in Louisiana
When thinking about starting a Limited Liability Company (LLC) in Louisiana, it’s crucial to understand the ongoing financial commitments needed to maintain your LLC. Accounting for these costs provides a full picture of the total expenses involved in filing an LLC in the state.
Major ongoing expenses for a Louisiana LLC include the Statutory Agent Fee, which requires having a registered agent for the service of process. Hiring a professional service for this could cost between $100 and $300 each year. Louisiana LLCs must submit an Annual Report to the Secretary of State every year. This carries a 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?
Starting an LLC in Louisiana involves an initial cost of $100, which might increase depending on specific factors. Typically, it takes 2 to 3 weeks to process, but you can speed up the process to 5 to 7 days for an extra $50 or even faster, to 2 to 3 days for an additional $100.
Tailor Brands offers several plans for LLC formation services. The Lite plan is the most budget-friendly, covering only the state filing fee and standard processing times. The Essential LLC plan, at $199 plus state fees, includes expedited processing, annual compliance services, and an operating agreement.
To maintain these services, there’s an annual charge of $199. The Elite plan, costing $249 plus state fees, includes everything in the Essential plan along with extra tools and services like a free business domain for the first year, a DIY website builder, an online store, eight free logos, a digital business card, business cards tool, and a social media post maker. The annual fee to continue these services under the Elite plan is $249.
Additional Costs When Starting an LLC in Louisiana
Louisiana LLC Name Costs
There’s no cost to name your Louisiana business; your chosen LLC name gets approved free of charge with your Articles of Organization filing by the state.
If you want to reserve your chosen name for 120 days before formally setting up your LLC, you can do so by filing Form 398 with a $25 fee.
Louisiana Registered Agent Costs
The Louisiana Registered Agent Fee ranges from $0 to $125 per year, as state law requires you to appoint a Registered Agent when you form your LLC.
A Louisiana Registered Agent can be either an individual or a company tasked with receiving legal documents and state notifications on behalf of your LLC. They must have a physical address in the state and be available during standard business hours.
Choosing to act as your own Registered Agent, or appointing someone you know for this role, does not cost anything extra.
On the other hand, you can opt for a Registered Agent service, which typically charges an annual fee of $100 to $300. These services often include additional business assistance and can help maintain your privacy.
It’s especially wise to use a Registered Agent service if:
- You don’t have a physical address in Louisiana (since the agent must have one).
- You prefer to keep your address private (some providers may use their address instead for enhanced privacy, depending on the service you choose).
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Louisiana Operating Agreement Costs
A Louisiana LLC Operating Agreement, which is a written contract among LLC members, is available at no charge. This document includes detailed information on the LLC’s ownership structure, management procedures, and the methods used for distributing profits.
It’s recommended that both Single-Member and Multi-Member LLCs create an Operating Agreement, keep it with their business records, and distribute copies to each member.
Typically, most websites charge between $50 to $200 to draft LLC Operating Agreements.
Louisiana EIN Cost
The Employer Identification Number (EIN), also known as the Federal Employer Identification Number (FEIN), is available at no cost.
This unique number is used for various purposes, including filing income taxes, opening an LLC bank account, and hiring employees, if applicable. Although many online services charge fees to obtain an EIN for your LLC, you can acquire it for free directly from the Internal Revenue Service (IRS).
You can complete the online application for an EIN through the IRS quickly and at no expense.
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Louisiana LLC Taxes
Annual costs for Louisiana LLC owners can vary widely based on the range of taxes they need to pay, which include:
Federal Income Taxes
For federal income taxes concerning your Limited Liability Company (LLC), the IRS provides several treatment options.
Single-member LLCs are classified as Disregarded Entities. This classification means that the IRS does not require the LLC itself to file a separate federal income tax return. Instead, the Single-Member LLC owner must file the return and pay the taxes.
The tax treatment of the LLC depends on who owns it: if owned by an individual, it’s taxed like a Sole Proprietorship; if a company owns it, it’s considered a branch or division of that parent company.
Multi-Member LLC Taxes
For an LLC that has multiple owners, it’s recognized as a Partnership for tax purposes. Such an LLC is required to file a 1065 Partnership Return and issue a Schedule K-1 to each owner. The K-1 outlines each owner’s share of the profits, which then “flows through” to the owners’ personal finances. Owners are responsible for paying taxes on this income individually, reporting it on their personal income tax returns (Form 1040).
Husband and Wife LLC Taxes
In community property states like Louisiana, husband and wife LLCs have the option to file taxes as a Single-Member LLC, termed a Qualified Joint Venture, instead of as a Multi-Member LLC. This choice can be specified during the EIN application process or requested from the IRS if an EIN is already obtained. Without this election, the default tax status for a husband and wife LLC in Louisiana is that of a Partnership.
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Electing Corporate Taxation
Beyond the standard tax statuses, an LLC has the option to elect corporate taxation, a decision best made with the advice of an accountant. There are two corporate tax election options: S-Corporation and C-Corporation.
- S-Corporation Taxation: By submitting Form 2553, an LLC can opt to be taxed as an S-Corporation. This can lead to reduced self-employment taxes and may be suited for businesses with steady profits.
- C-Corporation Taxation: By filing Form 8832, an LLC can choose C-Corporation taxation, which might be advantageous for larger businesses that benefit from healthcare fringe benefits savings, though it is less commonly selected.
Louisiana State Income Tax
In Louisiana, the tax treatment varies between Single-Member and Multi-Member LLCs. Single-member LLCs typically do not file a state-level tax return; instead, the owner reports the LLC’s profits or losses on their personal state tax return.
Multi-member LLCs, on the other hand, may be required to file a state-level Partnership return, while the individual owners declare their share of the profits or losses on their own state tax returns.
Local Income Tax
Your Louisiana LLC might have to pay local income taxes depending on the rules of your municipality. It’s advisable to get professional assistance for preparing and filing these taxes. Contacting your local municipality directly is the best way to understand their specific tax requirements.
Louisiana Sales Tax
When you sell products or services to consumers in Louisiana, it’s essential to collect sales tax and secure a Seller’s Permit. This permit, obtainable from the Louisiana Department of Revenue (LDR), authorizes you to add sales tax to your transactions. It’s known by several names, including resale license, wholesale license, and sales tax permit. You can register for this permit through the Louisiana Taxpayer Access Point.
Louisiana LLC Payroll Taxes
If your Louisiana LLC has employees, you’re responsible for managing payroll taxes. This includes withholding federal and state income taxes, Social Security and Medicare taxes, as well as paying Federal Unemployment Taxes (FUTA) and State Unemployment Taxes (SUTA), along with any local or county deductions.
Setting up and maintaining payroll, given its complexity, usually requires the help of a payroll service or an accountant. This ensures accuracy and helps avoid potential penalties for errors in tax handling.
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Louisiana LLC Cost FAQs
Conclusion
In conclusion, setting up an LLC in Louisiana requires careful consideration of the associated costs. Although the state offers a business-friendly environment with its regulatory benefits, potential tax advantages, and strategic location, the financial commitments of forming an LLC include filing fees, appointing a registered agent, and possibly hiring legal or consultancy services.
Furthermore, streamlined solutions from professional LLC services like Tailor Brands can simplify the process.
Entrepreneurs must carefully weigh these costs against Louisiana’s unique advantages, such as its legal framework and regional opportunities, to make a well-informed decision aligning with their business goals and financial capabilities.
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