How to Start an S-Corp in Louisiana


Steve Bennett
Steve Bennett
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Start an S-corporation in Louisiana

Louisiana, popularly known as The Pelican State, offers a bunch of benefits for business owners, especially the state capital Baton Rouge has a lot to offer to the rising entrepreneurs in the state. If you want to start a business in Louisiana, you must choose an appropriate corporate structure. You can have a corporation or a sole proprietorship or set up an LLC in Louisiana. There are a few guidelines that you should be aware of when it comes to starting an S-Corporation. In Louisiana, S-Corporation is businesses’ most common corporate structure, especially start-ups. It was developed in order to give companies limited liability protection while preserving the advantages of being a distinct legal organization.

In this article, you will learn about how to start an s-corporation in Louisiana. You will also learn whether an s-corporate business structure suits your business. Please read all the points carefully before starting your business in Louisiana.

What is an S-Corp in Louisiana?

An S corporation (S-corp) is not a type of corporate entity, unlike a limited liability company (LLC) or other business structures. It’s a tax classification that might result in significant financial savings for both corporations and LLCs but in different ways. S-corp is similar to LLC, except that the IRS treats it as a corporation for tax purposes.

If you want an S corp status for your business, you can always form an LLC to protect your personal assets from business debts. It takes some basic steps to have a successful s-corporation in Louisiana. S-Corps do pay corporate income taxes, but they are still treated as disregarded companies for federal tax purposes.

S-corps pay corporate taxes that LLCs do not have to pay. If you want to have an S-corp status, then we would recommend you have an LLC instead. This will protect your personal assets from your business liabilities and you don’t have to pay any corporate taxes.

–LLCBuddy Editorial Team

Limitation and Requirements of S-Corp in Louisiana

As you have decided to have an S-Corp structure for your business, you must know the limitations and requirements to qualify for S-Corp status. We have listed some important points to consider following for your reference-

  • Be a domestic corporation.
  • Not be an ineligible corporation, such as specific financial institutions, insurance providers, or domestic corporations engaged in overseas sales.
  • Have just one type of stock.
  • Have a maximum of 100 shareholders or members.
  • Have only permitted individuals, certain trusts, and estates as stockholders or members.

If you are qualified for the limitations and requirements, you can apply for an S-Corp in Louisiana.

How to Start an S-Corporation in Louisiana?

To create S-Corp in Louisiana, you must follow the below guidelines that include forming a business name, hiring a Resident Agent, filing your Articles of Organization, creating an operating agreement in Louisiana, requesting an EIN, filing a form 2553.

Step 1: Register a Business Name in Louisiana

After you have decided on the idea to start an S-Corp in Louisiana, deciding the name for your corporation is significant. Legal procedures should be taken into account when choosing your partnership name. Choose a business name that will enable you to develop a strong brand identity.

If you want to set up an LLC, there is a complete guide on Louisiana LLC name guidelines for a proper LLC name. Here are some guidelines you must follow while naming your S-corp.

  • Avoid profanities
  • The name should be available, and no other entity should have the same name in Louisiana.
  • Limit of restricted words that need a license in Louisiana, for example, doctors, attorneys, etc.
  • Do not use a business name that sounds like a government agency or entity (like “police,” “county,” and “state”)

Step 2: Hiring the Louisiana Resident Agent

The next step in starting an S-corp in Louisiana is hiring a Louisiana Resident Agent, a person that accepts legal paperwork on behalf of your business. This person or business will receive important tax forms, legal documents (such as subpoenas), all notices of lawsuits, and other official government correspondence in Louisiana. Forming an LLC and an S-corp will be easier if you have Resident Agent in Louisiana.

Step 3: File Your Louisiana Articles of Organization

The Articles of Organization is an important document to start your limited liability company (LLC). Louisiana Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization. In order for the “Articles of Organization” to be filed, you need to pay a filing fee to the state. In Louisiana, the filing fee is $100.

In California, along with the Articles of Organization, you must send the Statement of Information to file your company. The statement of information is a mandatory document in California, but other states do not have this document.

Step 4: Creating an Operating Agreement in Louisiana

After you have filed your Articles of Organization in Louisiana, the next step is to create an LLC operating agreement in Louisiana. The Louisiana LLC operating agreement is essential and necessary since it will cover your corporation’s important documentation and rules. The operating agreements usually include the following-

  • Article I: Organization
  • Article II: Management and Voting
  • Article III: Capital Contributions
  • Article IV: Distributions
  • Article V: Membership Changes
  • Article VI: Dissolution

After creating the LLC operating agreement, you can benefit in several ways since it will discuss how decisions for the business will be made, including management and member voting structure. For more details about how an operating agreement works, please check Operating Agreement.

Step 5: Request for EIN in Louisiana

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your general partnership. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Louisiana can be through the following:

  • Apply Online- You can apply for EIN online, the most desirable and fastest method for users.
  • Apply by Fax- Another method of obtaining EIN is to fax Form SS-4 (PDF) after entering all the correct information to (855) 641-6935.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

If you would like to be assisted in getting an EIN in the Internal Revenue Service, we can get your EIN for you. Our EIN service is quick and hassle-free. For more details about EIN for your business, check why you need EIN.

Step 6: File Form 2553 for Your S-Corp Business in Louisiana

Once you have obtained your EIN and Articles of Organization to form an S-Corp, you must file Form 2553, Election by a Small Business Corporation, to apply for S-corp status. Filing a form 2553 should be done 75 days after the formation of your S-Corp, or not more than 75 days after the beginning of the tax year in which the election is to take effect.

If your LLS-Corp has passed the deadline of 75 days, you must also file Form 8832, Entity Classification Election, in order to opt to be taxed as a corporation. Then you would send Form 2553 and Form 8832 jointly by certified mail from the USPS. In Louisiana, you can send your form 2553 to the Department of the Treasury Internal Revenue Service Center – Ogden, UT 84201 Fax: 855-214-7520 .

Advantages of Starting an S-Corporation in Louisiana

Filing an S-Corp in Louisiana has numerous benefits and advantages.

  • Writing Off Losses: With S-corp, owners can deduct business losses from their individual income statements. If the company loses money in the first few years, it may balance its other sources of revenue. Even so, understand the shareholder loss limitations set by the IRS.
  • Pass-Through Taxation: Starting an S-Corp is the widely known advantage in forming this kind of business structure since an s-corp uses a pass-through taxation structure. The company does not pay twice the tax in this kind of taxation. Because of this structure, most start-ups and entrepreneurs in Louisiana apply for an S-Corp LLC.
  • Qualified Business Income Deduction: A qualified business income, or QBI, is the total of all qualified items of income, gain, deduction, and loss from any qualified trade or business, including S-Corp. With this, S corp owners may deduct up to 20% of their eligible earnings under the Tax Cuts and Jobs Act.

FAQs

What is an S-Corp?
An S-Corp is a type of business structure that can be used to limit the liability of owners and is recognized by the Internal Revenue Service (IRS).
Is it easy to start an S-Corp in Louisiana?
Yes, starting an S-Corp in Louisiana is relatively simple. The process usually involves filing articles of incorporation with the Louisiana Secretary of State and obtaining an Employer Identification Number (EIN) from the IRS.
How long does it take to start an S-Corp in Louisiana?
The entire process of starting an S-Corp in Louisiana typically takes about six to eight weeks.
How much does it cost to start an S-Corp in Louisiana?
The total cost of starting an S-Corp in Louisiana can vary depending on the specific business needs. Generally, the filing fees and other costs associated with forming an S-Corp in Louisiana can range from $400-$700.
What are the tax benefits of starting an S-Corp in Louisiana?
One of the main benefits of starting an S-Corp in Louisiana is its ability to provide owners with favorable tax treatment. With an S-Corp, the owners can receive distributions from the company’s profits in the form of salary and dividends, which can be taxed at a lower rate. Additionally, S-Corps are not subject to double taxation like other business structures.
What are the benefits of forming an S-Corp in Louisiana over other states?
Louisiana has a favorable tax climate for small businesses and offers certain incentives for businesses that are incorporated in the state. Additionally, the filing and other fees associated with forming an S-Corp in Louisiana are generally lower than in other states.
What are the requirements for forming an S-Corp in Louisiana?
To form an S-Corp in Louisiana, you must file articles of incorporation with the Louisiana Secretary of State, obtain an Employer Identification Number (EIN) from the IRS, and adhere to all other applicable state requirements. Additionally, you must have at least one director and one shareholder, and the company must have a physical address in Louisiana.
Is there a minimum age requirement for forming an S-Corp in Louisiana?
No, there is no minimum age requirement for forming an S-Corp in Louisiana.
What is an S-Corp in Louisiana?
An S-Corp in Louisiana is a type of business entity that offers some of the same advantages of a corporation but with the taxation structure of a partnership. It is the most popular form of business entity in the state.
What are the advantages of forming an S-Corp in Louisiana?
An S-Corp in Louisiana offers several advantages, including limited liability protection for the owners, the ability to distribute profits to owners in different proportions than the ownership interest, and the potential for tax savings.
What is the process for forming an S-Corp in Louisiana?
The process for forming an S-Corp in Louisiana involves filing articles of organization with the Louisiana Secretary of State, registering with the Louisiana Department of Revenue, obtaining an employer identification number, and appointing a registered agent.
What documents are needed to form an S-Corp in Louisiana?
The documents needed to form an S-Corp in Louisiana are the articles of organization, a registered agent appointment form, and an employer identification number application.
What is the filing fee to form an S-Corp in Louisiana?
The filing fee to form an S-Corp in Louisiana is $50.
How long does it take to form an S-Corp in Louisiana?
It typically takes 5-7 business days to form an S-Corp in Louisiana.
What are the requirements for maintaining an S-Corp in Louisiana?
To maintain an S-Corp in Louisiana, an annual report must be filed with the Louisiana Secretary of State and taxes must be paid to the Louisiana Department of Revenue.
Do S-Corps in Louisiana have to have annual meetings?
Yes, S-Corps in Louisiana must have annual meetings where the shareholders vote on important matters related to the business.
Are there any special tax considerations for S-Corps in Louisiana?
Yes, S-Corps in Louisiana are subject to a different tax structure than other business entities, which can offer tax advantages. It is important to consult a tax professional to understand the implications.
What is the Louisiana Employment Security Law?
The Louisiana Employment Security Law is a state law that requires employers to provide unemployment insurance benefits to employees who lose their jobs through no fault of their own.
Do S-Corps in Louisiana have to comply with the Louisiana Employment Security Law?
Yes, S-Corps in Louisiana must comply with the Louisiana Employment Security Law.
What is the Louisiana Corporate Income Tax?
The Louisiana Corporate Income Tax is a state tax on the net income of corporations doing business in the state.
Do S-Corps in Louisiana have to pay the Louisiana Corporate Income Tax?
Yes, S-Corps in Louisiana must pay the Louisiana Corporate Income Tax.
Does the state of Louisiana require S-Corps to have a registered agent?
Yes, the state of Louisiana requires S-Corps to have a registered agent located in Louisiana to receive all legal documents on behalf of the company.
Do S-Corps in Louisiana need to file a DBA?
Yes, if an S-Corp in Louisiana wishes to do business under a name other than its legal name, it must file a DBA with the Louisiana Secretary of State.
What type of insurance does an S-Corp in Louisiana need?
An S-Corp in Louisiana should have liability insurance to protect against claims from third parties, as well as workers’ compensation insurance if it has any employees.
Does the state of Louisiana require S-Corps to publish a notice of formation?
Yes, the state of Louisiana requires S-Corps to publish a notice of formation in a newspaper of general circulation in the parish where the company is located.
What types of licenses and permits does an S-Corp in Louisiana need?
The types of licenses and permits required for an S-Corp in Louisiana depend on the type of business being conducted. It is important to consult a local business attorney to determine which licenses and permits are necessary.
What is the Louisiana Commercial Law?
The Louisiana Commercial Law is the body of state laws that regulate business activities in the state, such as contracts and business organizations.
Do S-Corps in Louisiana have to comply with the Louisiana Commercial Law?
Yes, S-Corps in Louisiana must comply with the Louisiana Commercial Law.
How often do S-Corps in Louisiana need to file taxes?
S-Corps in Louisiana must file taxes annually with the Louisiana Department of Revenue.
Does the state of Louisiana require S-Corps to have an operating agreement?
Yes, the state of Louisiana requires S-Corps to have an operating agreement that outlines the ownership and management of the company.
How can an S-Corp in Louisiana be dissolved?
An S-Corp in Louisiana can be dissolved by filing articles of dissolution with the Louisiana Secretary of State.
Is there any special paperwork required to dissolve an S-Corp in Louisiana?
Yes, to dissolve an S-Corp in Louisiana, an affidavit of dissolution must be filed with the Louisiana Secretary of State.
What is the Louisiana Business Corporation Act?
The Louisiana Business Corporation Act is the state law that regulates the formation and operation of corporations in the state.
Do S-Corps in Louisiana have to comply with the Louisiana Business Corporation Act?
Yes, S-Corps in Louisiana must comply with the Louisiana Business Corporation Act.
What is the Louisiana LLC Act?
The Louisiana LLC Act is the state law that regulates the formation and operation of limited liability companies in the state.
Is an S-Corp in Louisiana subject to the Louisiana LLC Act?
No, an S-Corp in Louisiana is not subject to the Louisiana LLC Act, since it is a corporation, not a limited liability company.

Also Read

Why Louisiana S Corporation is So Important

One of the primary reasons why S Corporations are so important in Louisiana is their favorable tax treatment. Unlike traditional C Corporations, S Corporations are not subject to double taxation. This means that the business itself is not taxed on its profits; instead, those profits are passed through to the shareholders and taxed at their individual tax rates. This can result in significant tax savings for business owners, allowing them to reinvest more of their earnings back into the business.

Another key advantage of S Corporations in Louisiana is the flexibility they offer in terms of ownership structure. While C Corporations are limited to 100 shareholders and are subject to certain restrictions on who can be a shareholder, S Corporations can have up to 100 shareholders and can include individuals, trusts, and certain types of tax-exempt organizations. This flexibility can make S Corporations an attractive option for businesses with diverse ownership structures or those looking to attract outside investment.

In addition to tax advantages and flexibility in ownership, S Corporations in Louisiana also offer limited liability protection for shareholders. This means that the personal assets of shareholders are generally shielded from the debts and liabilities of the business, reducing the risk that a business failure could result in financial ruin for the owners. This can provide peace of mind to business owners and investors alike, knowing that their personal assets are protected in the event of unforeseen circumstances.

Furthermore, S Corporations in Louisiana are often seen as more formal and prestigious entities than sole proprietorships or partnerships. This can be important for businesses looking to establish credibility with customers, investors, and partners. By operating as an S Corporation, a business signals to the world that it is a serious and professional enterprise, committed to compliance with state laws and regulations.

Overall, the importance of S Corporations in Louisiana cannot be overstated. From tax advantages to flexibility in ownership to limited liability protection, these entities offer a range of benefits that can help businesses thrive and grow in today’s competitive marketplace. Whether you are a small family-owned business or a rapidly expanding startup, considering the advantages of an S Corporation structure may be the key to unlocking your company’s full potential.

Conclusion

In conclusion, starting an S-corp in Louisiana is a strategic choice for entrepreneurs seeking the benefits of limited liability and favorable tax treatment. One can successfully establish an S-corp by following the outlined steps, including selecting a unique name, filing the Articles of Incorporation, obtaining necessary licenses, and adhering to state-specific regulations. Ultimately, this corporate structure offers a strong foundation for business growth and protection, making it a worthwhile consideration for those looking to launch a venture in Louisiana.

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