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Louisiana Business License Basics

By: Startup 101
Last Updated: November 15, 2024

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Starting a business in Louisiana can seem like a maze of paperwork and regulations. So, when you have a business idea, how do you make it official? From choosing your company’s structure to filing with the right agencies, our guide breaks down Louisiana’s business registration steps into manageable steps.

Related: Starting A Business In Louisiana Checklist

Step 1: Choose a Business Structure

A business structure (also called a business entity) refers to the legal form that a business operation takes. This choice determines how the business is taxed, managed, and the personal liabilities of the owners.

In Louisiana, the primary business structures are sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC). New business owners should study the differences to make the best choice.

Related: Comparison of Business Structures

Sole Proprietorship

A sole proprietorship is a business structure in which one person has complete control over the business decisions. Here, the business and individual are considered legally the same entity.

  • Pros: This is the easiest and least expensive of the four types of business structures to start, as it requires minimal paperwork (typically only registering an Assumed Business Name if one will be used).
  • Cons: The significant drawback is that the small business owner is personally liable for all business debts and legal claims, putting personal assets at risk.

Related: How to start a Louisiana Sole Proprietorship

General Partnership

An informal business structure is one in which two or more people conduct a business together.

  • Pros: In a general partnership, two or more individuals jointly own and operate the business. Partners share profits, losses, and decision-making responsibilities.
  • Cons: Similar to a sole proprietorship, partners in a general partnership have unlimited personal liability for the business’s debts and legal claims.

Corporation

A business structure that is a separate legal entity from the individual.

  • Pros: Limited liability protection for shareholders and the ability to raise capital by issuing shares.
  • Cons: Most complex to set up and administrative requirements such as holding meetings, appointing a Louisiana registered agent, and more.

Limited Liability Company (LLC)

A business entity that provides liability protection with ease of operation.

  • Pros: Limited liability protection with fewer administrative requirements than corporations.
  • Cons: More complex and costly setup than sole proprietorships or general partnerships.

In addition to these four, there are two other types of business structures that aren’t commonly chosen by most Louisiana businesses.

Limited Liability Partnership (LLP): A partnership where some or all partners have limited liability.

  • Pros: Partners are protected from personal liability for the actions of other partners.
  • Cons: More complex to set up than general partnerships.
  • Best for: Professional service firms like law offices, accounting firms, and medical practices.

Limited Liability Limited Partnership (LLLP): A lesser-used structure combining elements of limited partnerships and LLPs.

  • Pros: Provides liability protection to both general and limited partners.
  • Cons: Not recognized in all states and may have complex regulatory requirements.
  • Best for: Real estate investment firms and family businesses with passive investors.

Each structure has unique tax implications and ongoing requirements. When choosing a structure, business owners should consider their specific industry, growth plans, and management preferences. Consulting with a legal or tax professional can help ensure the best choice for your specific situation.

Step 2: Select a Business Name

The next step in the registration process is choosing a name for your Louisiana business. The requirements vary depending on the type of business structure chosen.

Sole Proprietorships and Partnerships: A sole proprietor or partnership using the owner(s) full first and last name; no registration is needed. However, if a specific business name is desired (e.g., “John Smith’s Plumbing” instead of just “John Smith”), you must register a Louisiana Trade Name with the Parish Clerk of Court where your business is located.

Corporations and LLCs: These entities select their names during the formation process. One important consideration when picking a name is that the name must be unique within Louisiana. Louisiana business name search can be done with the Louisiana Secretary of State to check availability.

Step 3: Federal Employer Identification Number (FEIN)

A Federal Employer Identification Number (FEIN), also known as an Employer Identification Number (EIN), is a unique nine-digit identifier issued by the Internal Revenue Service (IRS) for businesses.

You need an FEIN if:

  • Your business has employees
  • You’ve formed a corporation, partnership, or multi-member LLC

Sole proprietorships or single-member LLCs without employees typically use the owner’s Social Security number for tax purposes, though they can register for an FEIN if they want to.

Obtaining an FEIN is straightforward and free of charge. The quickest method is to apply online through the IRS website, which typically takes just a few minutes. For those who prefer alternative methods, applications can be submitted by mail or fax using Form SS-4, though these options may take longer to process.

How to Apply for a FEIN

Step 4: Professional Licensing

Several professions in Louisiana require specific licenses before offering services. Common licensed professions include:

  • Physical therapists
  • Interior designers
  • Private investigators
  • Cosmetologists
  • Barbers
  • Massage therapists
  • Architects
  • Accountants
  • Nurses
  • Teachers

To determine if your profession requires licensing, visit the Louisiana Professional and Occupational Licenses database for a list of regulated professions and their respective licensing boards.

Step 5: Louisiana Revenue Account Number

Regardless of business structure, most new businesses in Louisiana will need to obtain a Louisiana Tax Account Number from the Louisana Department of Revenue. This unique identifier is used for various tax purposes, including sales tax collection and employee withholding.

Who needs to register:

  • Sales tax: If your business sells tangible personal property or services in Louisiana, you’ll need to collect and remit sales tax.  
  • Income tax: If your business has income from Louisiana sources, you may need to pay income tax.  
  • Employer withholding tax: If your business has employees, you’ll need to withhold federal and state income taxes from their paychecks and remit these taxes to the government.  
  • Other taxes: Depending on your specific business activities, you may be subject to other taxes, such as property or franchise taxes.

To register or learn more, visit the GeauxBiz website, follow the prompts to create your business profile, and obtain your Tax Account Number.

Step 6: Resale Certificate

A Louisiana Resale Certificate allows businesses to purchase merchandise intended for resale without paying sales tax at the time of purchase. Instead, the final consumer will pay the sales tax when they buy the product.

Who needs it:

  • Retailers
  • Wholesalers
  • Manufacturers (for components they will incorporate into finished products)

You must first have a Louisiana Tax Account Number to get a Resale Certificate. Once you have this, you can apply for a Louisiana Resale Certificate through the Louisiana Department of Revenue.

Step 7: Local Business Licenses

While the state of Louisiana doesn’t require a general state business license, many local jurisdictions have their own licenses or permits. Here’s a brief overview of local licensing requirements in a few cities:

  • New Orleans: Businesses in Orleans Parish need an Occupational Business License or a General Business License.
  • Baton Rouge: A Business Registration Application is required for all businesses.
  • Shreveport: An Occupational/Business License from the City’s Revenue Division is necessary for all businesses.
  • Lafayette: Home-based businesses must obtain a Home Occupation Permit in addition to regular business licensing.

These are just examples, and requirements vary widely across Louisiana’s parishes and municipalities. In addition, some jurisdictions may have specific rules for home-based businesses, zoning restrictions, or industry-specific permits.

To ensure compliance:

  1. Contact your local city hall or parish office
  2. Inquire about business licensing requirements
  3. Ask about any additional permits needed for your specific business type and location

Step 8: Local Building & Zoning Permits

When establishing a business location in Louisiana, it’s important to understand and comply with local building and zoning regulations. These rules ensure that businesses operate in appropriate areas and meet safety standards. Here’s what you need to know:

Zoning Laws: Zoning laws dictate where certain types of businesses can operate. Before leasing or purchasing a property, check with your local zoning department to ensure your intended use is permitted in that area.

Building Permits: If you plan to construct a new building or modify an existing one, you’ll likely need building permits. These ensure that any changes meet local building codes and safety standards.

Certificate of Occupancy: This document certifies that your building is compliant with building codes and zoning laws and is safe for occupancy. It’s typically required before you can open for business.

Home-Based Business Regulations: Some areas have specific rules for home-based businesses. For example, in New Orleans, home-based businesses may need a Home Occupation Permit in addition to regular licensing.

Special Use Permits: Certain businesses might require special use permits if they don’t fit typical zoning categories or might impact the surrounding area.

Health Department Approvals: Food-related businesses often need additional approvals from the local health department.

To navigate these requirements:

  1. Contact your local planning or zoning department. Many cities in Louisiana have a Department of Safety and Permits or a similar office that handles these matters.
  2. Inquire about regulations for your specific business type and location.
  3. Determine which permits you’ll need before finalizing any property agreements.
Take the guesswork out of figuring out what licenses and permits are required to start your business with license research packages from Bizee and LegalZoom.

For only $99, you can save a lot of time and know your business complies with local, state, and federal requirements.


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