Think about your LLC a year from now: raking in profits and taking Louisiana by storm. You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees – before you sell a single product, there are startup costs associated with launching an LLC in Louisiana.
While you’re making plans and dreaming big, make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Louisiana startup fees here.
Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:
Bare Minimum Cost to Start an LLC in Louisiana
- Optional: LLC Name Reservation Fee
- $25 with an optional $30 expedited processing fee
- Required: Articles of Organization Fee
- $100 with an optional $30 expedited processing fee
Overall Louisiana LLC Formation Costs
LLC Name Reservation Fee
First things first: reserving a business name is not required to start an LLC in Louisiana. That said, if you’ve come up with a perfect name but aren’t ready to start your business, the name reservation is a nice option. It costs $25 and gives you a 120-day hold on your desired name. If you’re ready to start your business, though, you’ll save time and money by skipping the reservation and going straight to the Articles of Organization.
Articles of Organization Fee
This is the big one, the most important (and most expensive) form that you’ll file to start your Louisiana LLC. Once your Articles of Organization is accepted, your business is official and recognized by the state. But to submit it, you’ll need to pay a $100 fee and, if you want to submit it quicker, $30 for expedited processing as well. You only file the Articles of Organization once, so once you make this payment, you won’t have to do so again.
Business and Professional Licenses
Even after you’ve filed your Articles of Organization, your LLC may need additional licenses before commencing business in Louisiana. This all depends on the type and location of your business. For example, cosmetologists must acquire licensure from the Board of Cosmetology before operating in the state. Plus, certain cities and/or counties have their own licensure laws, so you’ll need to contact your local government – along with Louisiana’s Professional License page – to find out which licenses you need.
LLC Formation Service
Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an LLC formation service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services (like ZenBusiness and Northwest) offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
Registered Agent Service
Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with Louisiana business law. In short, you need an agent you can trust.
While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2000.
Cost variations depend on the experience and location of the lawyer. But with so many business lawyers available, how do you find the right one for your LLC? On a site like Avvo, you can access a database of Louisiana business lawyers and compare areas of expertise, rates, locations, etc., so you can be confident that you’re hiring the right one.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into Louisiana. Does this describe your company? Then instead of the Articles of Organization, you’ll file an “Application for Authority.” All foreign business entities are required to foreign qualify in Louisiana, or they could incur some pretty severe penalties. At $150, the Application for Authority is a bit pricier than the Articles of Organization, but similarly, it’s a one-time filing and fee.
LLC Annual Fees
So far, we’ve mainly discussed one-time fees, but there are also recurring fees for Louisiana LLCs, primarily associated with filing Annual Reports. Your LLC will be required to file an Annual Report every year before its “anniversary month,” or the month in which it was formed. These reports must be filed online and cost $30, so you can write that expense into your yearly budget.
LLC taxation isn’t overly complicated in Louisiana. The Federal government classifies them as “pass-through” entities, meaning the LLC itself doesn’t pay corporate income taxes; rather, the owners/members report income and losses on their personal returns. Also, Louisiana is one of the states that does not charge its LLCs with a “franchise” or “privilege” taxes.
Still, there are certain circumstances that would require your business to pay specific taxes. For example, if you sell merchandise, you will pay a sales tax, and if you maintain employees, you will need to pay withholding and unemployment taxes.
It’s less common, but if you’ve set up your LLC to be taxed like a corporation, it will be subject to the corporate income tax and a franchise tax. Learn more on the Louisiana Department of Revenue website.
What If I Don’t Pay?
Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
Fail to pay any necessary taxes and you will incur a penalty of 5% of the amount owed for every 30 days it remains delinquent (up to 25%). Fail to file your Annual Report on time and your LLC will lose its good standing with the state. Without good standing, you cannot foreign qualify in most other states, apply for business loans, renew some professional licenses, and more.
If you take too long to reconcile your good standing, pay outstanding taxes, make registered agent changes, or submit other necessary filings, the state can administratively dissolve your business. At this point, you would be unable to continue doing business in Louisiana until you submit all necessary payments and forms, as well as a $75 fee.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in Louisiana.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees – like Annual Reports – so your business doesn’t fall out of good standing.