Starting a business in Louisiana is always a good idea, given its positive stats regarding startups. If it’s a place you are looking to start a business in, there are multiple legal aspects you must keep in mind.
Starting any business has various stages. From a bird’s eye view, the legal obligations you need to fulfill before you start a business in Louisiana play a major role in deciding its success. With all the paperwork, it’s easy to miss out on some aspects. This can become a serious violation of Louisiana laws.
In this article, we have jotted down the legal aspects and challenges of starting a business in Louisiana so you don’t miss out on any paperwork.
Why Choose Louisiana for Your Business?
Before moving to the legal aspects of setting up a business in Louisiana, let’s dive into some numbers regarding startups and their performance.
- Louisiana is the 9th best state in the US when it comes to affordability.
- It also has the 6th lowest unemployment insurance costs.
- 75%–80% of the startups in Louisiana survive their 1st year in profit.
- A whopping 471,240 small businesses operate in Louisiana.
These stats are proof of the business-friendly environment in the state. So, if you have your legal bases covered, your business in Louisiana won’t have any major obstacles in its way.
Louisiana Business License
When you start a business anywhere, you need some sort of legal permission from the local government of the place. In Louisiana, this license is mandatory for establishing a business. If you skip this part, you can easily get arrested in Louisiana. We don’t want that at all!
In Louisiana, this license is obtained from the Secretary of State. For different corporation forms, there is a unique license. To learn which license best suits you, you can contact the office of the Secretary of State. The paperwork, permits, and documentation differ for every corporation form.
Remember, this is you registering your business with the government. This process can differ for different entities. However, the basic information you will need to provide stays the same, such as:
- The basic business details
- The business name
- Registered agent information (the person who will be in contact with the Secretary of State)
The General Business License
In Louisiana, all startups must file for a general business license. For each city, there is a different business license. If you are looking to do business in multiple cities, you have to get a license from each city separately.
Acquiring a Business Bank Account
A verified payment method is essential for setting up any business in Louisiana. This helps you maintain the liability protections gained after registering your business. A business bank account will also help you in separating your finances from the business ones. If your personal and business finances are in the same account, it puts your assets at risk if your business gets sued in the future.
To open a bank account, you will need an EIN (employer identification number). This is also referred to as the Federal Tax ID. EIN is a 9-digit number issued by the IRS.
Note: You should wait for the LLC to be approved by the Secretary of State before applying for an EIN. In fact, this is one of the last things you will do when setting up a business in Louisiana.
Choosing a Business Structure
License, permit, and other paperwork differ according to your business structure and the city you want to do business in. Therefore, it’s crucial to have a clear understanding of what your business structure is and how you are going to grow it in the future.
Some of the business structures in Louisiana include:
- limited liability company (LLC);
- nonprofit; and
- DBA (Doing Business As).
Tax and Insurance
The tax requirements for your business can get complicated. They mostly depend on the city you are doing business in and the form of your company. There are multiple places you will have to check your tax requirements from. Some of them include:
- Federal Resources (The U.S. Internal Revenue Service)
- The Social Security Administration
- Insure U for Small Businesses
- The Louisiana Department of Revenue
- The Louisiana Workforce Commission
- The Louisiana Department of Insurance
These are the places (both federal and state) where you can get the right information regarding your tax and insurance requirements. In case you fail to fulfill any of these, you can find yourself in a tricky legal position.
How to Fight Your Legal Battle
In case you fail to fulfill any of these mentioned requirements when starting your business, there are high chances you will need to fight a legal battle in court.
In such a case, you must choose a competent legal firm in Louisiana. Having an experienced and knowledgeable attorney is also crucial to winning your legal battles regarding business.
Some of the factors you need to look for when choosing your legal team in Louisiana include:
- Experience with business-related cases
- Experience with permits, licenses, and miscellaneous business paperwork
- Fee schedules
- Diversity in their attorneys
- Reputation with the locals
As great as Louisiana is with startups, you must be aware of the legal challenges you must face when starting a business. You can hire a company to take care of your initial business setups. This will help you ensure that nothing is left unattended that can later cause legal challenges for you and your business. Always have a separate business bank account that only manages your business finances.
Lastly, if you are caught in a violation of some law, make sure you don’t settle for less with your legal team selection. Hire an experienced firm that has business expertise.