How to start a business in Louisiana [Updated 2024]

So you have a business idea and want to open up shop in Louisiana? With a diverse population of 4.6 million people living in cities like New Orleans, Baton Rouge, and Lafayette, the Pelican State is a great choice for small and emerging businesses. However, while starting a business can be an exciting and rewarding venture, it also requires careful planning and execution.

You’ll need to define your business plan, name your company, and estimate startup costs—and that’s just the beginning of structuring your business for success, which also includes properly registering it and navigating Louisiana’s tax requirements.

If that sounds complicated, never fear—you’re in the right place. With our step-by-step guide, you’ll learn more about setting up a compliant Louisiana business.

1. Name your business

The first step toward establishing your brand identity in Louisiana is choosing the right name for your business. You may want to choose something that evokes your service or product, or which otherwise helps establish your organization’s purpose. 

Here are some key considerations:

• Check name availability in Louisiana. You may have the perfect name picked out, but you need to make sure that the business name is both unique and available for registration in Louisiana. You can search for name availability on the website of the Louisiana Secretary of State (SOS). You can also check corporate names, limited liability company names, trade names, and trademarks with the Secretary of State by phone at (225) 925-4704 or by mail at P.O. Box 94125, Baton Rouge, LA 70804.
• Make sure that the name follows Louisiana state rules. Certain terms are prohibited from business names in Louisiana, and some terms are restricted. For example, only banks can use the term “bank” or “credit union,” and companies with the term “engineer” must get a waiver for use from the Louisiana Professional Engineering & Land Surveying Board.
• Search the US Patent and Trademark Office to make sure your chosen business name hasn’t already been trademarked. 
• Reserve your business name. If you want to secure your chosen business name before you’ve officially registered your business, you can file for a name reservation. The Secretary of State allows you to reserve names for 60 days (in the case of LLCs) or 120 days (for corporations) by filing an application and paying a $25 filing fee.
• Formally lock down your business name through the Louisiana GeauxBiz portal.

It’s also smart to register a web domain name and social media handles using your business name so you can kick off your online presence.

Additionally, you’ll need to register a trade name or "doing business as" (DBA) name if you plan to operate under a name that is different from your legal business name. This is also known as an “assumed name” or “fictitious business name.” You may need to do this if you’re operating as a sole proprietor or as a partnership under a business name that doesn’t contain your name or one of your partners’ names, or if your LLC, LP, or corporation operates under a name that isn’t used on the original business registration. DBA names must also be distinct from other currently registered business names.

2. Explore your funding options

Before launching your business, you'll need to secure the necessary capital to get it off the ground. You may be using your personal savings to fund it via bootstrapping or you may plan to secure lenders and private investors. While the state of Louisiana does not offer specific grants for new business owners, there are various funding options for entrepreneurs:

• Business loans: You can apply for loans from banks or credit unions, including Louisiana Small Business Administration (SBA) loans. SBA offers loans for specific purposes, such as starter loans, disaster relief, and more, so always check to see if one of their loans may apply to your business.
• Investors: Seek investment from angel investors, venture capitalists, or crowdfunding platforms.
• Grants: Look for grants offered by federal or local government agencies, as well as private organizations.
• Louisiana Economic Development (LED): This group facilitates access to capital through the Louisiana Small Business Loan Guaranty Program, and offers various tax credit programs (more on that below).

3. Decide on your business structure 

Next up is a crucial step of business formation—deciding on the best type of business structure for your new enterprise. In Louisiana, there are six business entity types, including sole proprietorships, limited partnerships, general partnerships, corporations, limited liability companies (LLCs), and limited liability partnerships (LLP). Choosing the right structure depends on your business needs, goals, level of personal liability comfort, and tax considerations. Here’s more information on each:

Note that LLCs and corporations must be formally incorporated in the state of Louisiana. LLCs require articles of organization filed with the Louisiana Secretary of State, while corporations require articles of incorporation.

4. Register your business in Louisiana

After deciding on your business structure, it's time to register your business with the appropriate Louisiana state agencies. You must register with:

• The Louisiana Secretary of State
• The Louisiana Department of Revenue
• The Louisiana Workforce Commission

Registration requirements vary by entity types, but Louisiana simplifies it by bundling registration under the Louisiana GeauxBiz portal. Here are some of the common fees you may encounter when registering your business:

5. Decide on a registered agent

A registered agent is the person or entity responsible for receiving official documents and notices on behalf of your business. In Louisiana, businesses are required to have a registered agent, and that individual must have a physical address within the state.

You may serve as your business's registered agent if you have a physical address in Louisiana and are available during regular business hours. Otherwise, you can hire a registered agent for a fee. This service will ensure that you receive important documents promptly by forwarding your mail. Registered agents' pricing typically costs $100 to $300 annually in Louisiana. 

6. Apply for an Employer Identification Number

An employer identification number (EIN), also known as a federal employer identification number, is required for most businesses in the United States, including in Louisiana. You'll need to obtain an EIN if you plan to hire employees, operate as a corporation or partnership, open a business bank account, or file certain federal and state tax returns. You can apply for an EIN by submitting a Form SS-4 to the Internal Revenue Service (IRS) online or by mail. The process is straightforward and free.

Even if you’re not obligated to get an EIN to operate your business, you may need it to open a business bank account or to process certain types of payments to your company.

7. Get up to speed with Business Tax Credits

When you’re starting a new business, you should take advantage of all the resources available to you. The state of Louisiana offers various tax credits and incentives to encourage business growth and investment. Leveraging these credits can help you build a successful business. Here are some of the notable tax credits available in the state:

• Angel Investor Tax Credit: Up to 25% tax credit for individual investors in early-stage, wealth-creating businesses.
• Digital Interactive Media and Software Development Program: A 25% tax credit to qualified, in-state digital media and software development companies, plus 18% credit for eligible production expenses.
• Enterprise Zone Program: Provides either a $3,500 or $1,000 tax credit for each new job created, plus a sales/use tax rebate on capital expenses or 1.5% investment tax credit for eligible expenses. 
• Entertainment Job Creation Program: Provides 15 or 20% tax credit on annual wages to qualified entertainment companies that create at least five “well-paid” net new jobs for residents of Louisiana. 
• Industrial Tax Exemption Program (ITEP): Allows eligible manufacturing facilities to receive property tax exemptions for up to 10 years on certain equipment and improvements.
• Live Performance Production Program: Tax credits of up to 25% for live music and theater productions. 
• Motion Picture Production Program: Tax credits of up to 40% for eligible, in-state film production.
• Music Job Creation Program: Tax credits of 10 or 15% on annual wages for qualified music industry companies that create at least three “well-paid” net new jobs for residents of Louisiana.
• Research and Development Tax Credit: Offers 30% tax credit for businesses engaged in research and development activities.
• Sound Recording Program: Production credits of up to 18% for music and sound production costs.

To take advantage of these tax credits, you'll need to meet specific criteria and follow the application process, as outlined on the Louisiana Economic Development website. LED also offers special programming for entrepreneurs in the state, including mentorship programs, emerging business development, bonding assistance, and more.

8. Stay on top of filing requirements and taxes

It’s critical to stay on top of state and federal tax regulations to keep your business compliant. Businesses selling goods in Louisiana should register with the Louisiana Department of Revenue (LDR) for sales tax collection and, likewise, businesses should register with the LDR for withholding taxes if they have employees.

Your business may require licenses or permits, depending on your business activity. The GeauxBiz website has information about local licenses and permits, but you should also check the websites of the cities, counties, and parishes within which you’ll operate.

Other considerations include:

• State sales taxes: If your business sells taxable goods or services, you must collect and remit sales tax to the Louisiana Department of Revenue. 
• Local sales taxes: Sales tax rates can vary by parish, ranging from 4.4% to 12.95%
• State income tax: Depending on your business structure, you may be subject to Louisiana state income tax. Corporations, LLCs, and partnerships have different tax obligations, so consult with a tax professional.
• Federal income tax: Your business will be subject to federal income tax, with the tax rate dependent on your business structure. For example, sole proprietors pay taxes on business income as part of their personal tax returns, while shareholders pay taxes on dividends from a corporation. Consult the IRS guidelines and consider hiring a tax professional to determine your tax responsibilities.
• Employment taxes: If you hire employees, you'll need to withhold and pay federal and state employment taxes, including Social Security and Medicare taxes (See more on payroll taxes below). State unemployment taxes should be submitted online via the Louisiana Wage and Tax System (LAWATS).
• Annual reports: In Louisiana, LLCs and corporations are required to file annual reports with the Secretary of State's office, which cover their business name, registered agent information, and director/officer/manager names and addresses. If you don’t file for more than three years, your business will be dissolved or have its business rights revoked in Louisiana. Annual reports can be filed via GeauxBiz.

9. Find a payroll solution

When it comes to hiring employees or contractors in Louisiana, there are several important considerations. First, you must correctly classify them to avoid potential fines. Additionally, you should be aware of Louisiana's overtime regulations and entitlements, such as the requirement to pay employees 1.5 times their regular hourly wage for hours worked beyond eight per day or 40 per week. Louisiana also sets its minimum wage at the federal minimum wage rate of $7.25 per hour for covered, nonexempt employees.

Managing payroll is an essential aspect of being an employer in Louisiana, as you need to ensure that your workforce is compensated accurately and punctually. Consider using payroll software solutions like Rippling, which can streamline the time-consuming process of payroll management and help you stay compliant with overtime laws, no matter where your workers are based. With Rippling Time & Attendance, you can effortlessly track employees' hours and receive notifications when someone is nearing overtime. Once hours are approved, Rippling simplifies the payroll process, calculating net pay and taxes in a matter of seconds with just a single click of "Submit.”

If you're expanding your global workforce, Rippling has you covered:

• Easily pay all your employees, regardless of their tax jurisdictions or preferred currency, in a single pay run. 
• Include both hourly and salaried employees, as well as contractors, in your pay runs. 
• Efficiently oversee all your team, systems, and data worldwide from one centralized platform.

10. Support and scale your growing business with Rippling

As your Louisiana business expands, the necessity for an HRIS (Human Resource Information System) becomes increasingly evident. An HRIS is a software solution designed to streamline various HR tasks, including recruitment, employee onboarding, payroll processing, benefits administration, and much more.

The sooner you implement an HRIS, the smoother your scalability efforts will be, especially if you have ambitions for global growth. When you reach that stage, Rippling offers a comprehensive solution to manage your global workforce within a single system. 

• Whether your employees are based in New Orleans or on the other side of the globe, you can seamlessly hire, pay, and manage them.
• Proactively address local, state, and federal compliance issues, complete with a well-defined plan of action.
• Centralize all benefits, such as health insurance, 401(k) plans, and commuter benefits, in a unified system.
• Automate tasks like new hire enrollments, deduction updates, and COBRA administration.
• Effortlessly maintain up-to-date recruiting data, from open positions to new hires, and automate every facet of the hiring process.
• Enjoy the convenience of a single, reliable source of truth for HR analytics, policies, and more.

FAQs about setting up a business in Louisiana

Do I need a business license in Louisiana?

Yes. Your business needs to be registered with the Louisiana Secretary of State, and you should file for a general business license in Louisiana. Additionally, businesses that sell goods or services subject to sales tax need to carry resale certificates, also known as “seller’s permits.” Businesses can apply for these certificates for free via the Louisiana Department of Revenue’s LaTAP system. 

Do I need a business bank account when launching a business in Louisiana?

No, you aren’t legally required to set up a separate business bank account when launching a Louisiana business. However, setting one up, along with a business credit card, will help you streamline your business finances and protect your personal assets. If you use your personal account, your personal assets could be at higher risk if your business is sued. Furthermore, if you have employees, you’ll need a business account to run payroll.

Do I need to get business insurance?

You are not required to get business insurance unless you have employees. In that case, the state of Louisiana compels you to carry workers’ compensation insurance or approval for self-insurance. If your business owns any vehicles, then you will also need to have commercial auto insurance.

Many businesses choose to safeguard themselves with liability protection, even though it’s not required. For example, general liability insurance can provide valuable protection should someone be injured in the course of your business activities. If your business provides professional advice or services, professional liability insurance can protect you if allegations of negligence arise. What’s more, should your business encounter unexpected disruptions, such as natural disasters, having the right coverage can help during periods of unforeseen downtime.

What are Louisiana’s state payroll taxes?

The Louisiana Department of Revenue oversees payroll taxes. All employers must withhold income tax from nonresident and resident employees working in-state, except for those who are exempt from income tax withholding. Employers must also pay unemployment tax.

Unemployment compensation tax ranges depending on the employee’s wages and the assigned tax rate, which varies depending on how long employers have been operating. Louisiana employers also pay into federal unemployment tax under the Federal Unemployment Tax Act (FUTA). Employers who pay state unemployment insurance (SUTA) on time get a discount of up to 5.4% on federal unemployment tax.

Personal income tax rates range from 1.85-4.25%.

Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.