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Getting started
Business structure | Business plan | Business name | Registration | Location | Permits Financing | Key vendors | Contacts
Louisiana provides numerous resources and programs aimed at helping businesses get started, be they start-up ventures, existing companies expanding or relocating into new areas of the state, or national corporations moving into the Louisiana market for the first time. In addition to the state agencies, incentives and services detailed throughout this guide, Louisiana boasts an impressive business incubation and technology park network, active local chambers of commerce and regional economic development organizations, a wealth of financial and capital resources, and an academic infrastructure that offers both major research facilities and additional services and assistance to businesses operating in the state.
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Because businesses of all sizes will have basic questions about how to find these resources and how to get started in Louisiana, this section provides a quick overview of the first steps most businesses must take. You'll find additional resources and more extensive information on each topic introduced here in subsequent sections of the guide. In addition, new business owners should always seek the guidance of a professional accountant and/or attorney to verify all legal and tax requirements are met before operating a business.
Setting up shop: Nine steps to a solid start
1. Choose a structure
One of the first steps in forming any new business is to determine the type of business structure that you will use. There are several structures to choose from, including sole proprietorship, partnership, corporation, limited liability company and limited liability partnership.
Each has advantages and disadvantages as well as tax consequences of which you should be aware. It's up to you to decide which of these structures best suits your business objectives and your financial situation. You may wish to consult a tax practitioner, accountant, attorney, or one of the many resource organizations identified in advice and assistance.
You will need to register as one of the following types of business in order to operate in Louisiana:
- Individual or sole proprietorship: a business where only you, or your spouse, own the business even though you may have employees.
- Partnership: a business where two or more people own the business jointly.
- Corporation: a business which is treated by law as an entity. It has a life separate from its owners or stockholders. Many corporations begin as sole proprietorships or partnerships.
- Limited liability company: an entity that is an unincorporated association having one or more members organized and filing articles with the Secretary of State. It is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.
- Foreign corporation: A corporation organized outside the state may obtain a certificate of authority to transact business in Louisiana by filing an application with the Secretary of State's Corporations Section and by appointing a registered agent to accept service of process.
2. Develop a business plan
It's hard to overemphasize the importance of a comprehensive, thoughtful business plan. You've got a lot riding on it: outside funding, credit from suppliers, management of your operation and finances, promotion and marketing of your business. A business plan precisely defines your business, identifies your goals, and serves as your firm's resume. The basic components include a current and pro forma balance sheet, an income statement, and a cash flow analysis.
Help in developing an effective business plan is easily available in Louisiana. Start with the Small Business Development Center nearest you or one of the incubators or other resource organizations listed in the Advice and Assistance section of this guide. You can also find tips, suggested outlines, and sample plans online. A great place to start is with outlines like the ones you can find at these Web sites.
Small Business Administration
Community and Development Corp.
Louisiana Small Business Development Center Network
3. Choose a name
The name of your company is also an important legal and business decision. Considerations include appropriate marketing, branding, and property rights. Names must be distinguishable from corporate, limited liability company and trade names already on file, or reserved, in the Louisiana Secretary of State's office.
Before you submit articles of incorporation, articles of organization and trade names, the Secretary of State's office recommends that you conduct a preliminary check of the corporation or trade name. Preliminary checks of name availability may be made by phone or by conducting an online search of the office's Corporations Database. Click on "Name Availability," click on "Search Database"
Do not rely on a preliminary check! If the name you want is available, you should formally reserve it with the Secretary of State's Office or wait for confirmation of your filing prior to obtaining stationery, business cards, phone listings, bank accounts, and so on. Names can be reserved for a fee of $25 and a period of 60 days. Two 30 day extensions are available upon request.
Note: If you are an existing business coming to Louisiana from out-of-state and you have a trade name/trademark/service mark filed with the U.S. Patent and Trademark Office, you should contact an attorney for legal advice. Filings with the Louisiana Secretary of State's office are not cross-checked from state to state or against the federal registrations.
4. Register your business
Corporations, partnerships, and limited liability companies are required to register with the Louisiana Secretary of State's office before they can operate in Louisiana. Information on the requirements and the forms that need to be submitted are easily found on the Secretary of State's Web site.
Unincorporated businesses such as sole proprietorships must register with the Clerk of Court in the parish where the entity is doing business. Contact numbers for parish clerks can be found at the Secretary of State's Web site or in this guide under Resources.
Any business that engages in sales of any kind must also register with the Louisiana Department of Revenue.
5. Obtain an employer identification number
An employer identification number, or EIN, is also known as a taxpayer identification number, or TIN. A sole proprietorship that has no employees and files no excise or pension tax returns and an LLC with a single owner (where the owner will file employment tax returns) are the only businesses that do not need an employer identification number. In these instances, the sole proprietor uses his or her social security number as the taxpayer identification number. All other businesses must apply for a federal EIN.
To obtain an EIN for your business you will need to file form SS-4, Application for Employer Identification Number, with the Internal Revenue Service. If eligible you can apply online, or you can download Form SS-4 and mail it in. Visit the IRS business information page on the Web or call one of the local IRS offices listed in advice and assistance to find out more.
6. Select a location and site
When choosing a location for your business, consider the nature of your service or product and your target market. While retail businesses may desire visibility or easy access for walk-in trade, wholesalers and distributors typically need more space at a lower cost per square foot and truck or loading access. Business and professional services tend to look for office buildings or professional centers.
Louisiana offers a growing market with both new and existing properties in each of these sectors. You may find it useful to consult the directory of industrial parks throughout the state on the Louisiana Economic Development Web site, or you can find searchable databases with detailed information on available properties through several other online resources. Go to Louisiana Online to find out more!
7. Obtain permits and licenses
The proper federal, state and local business licenses and permits allowing a legal entity to operate in Louisiana must be obtained before the start of business, including permits, occupational licenses, certificates of occupancy, and tax identification numbers.
Louisiana has created the First Stop Shop in the Louisiana Secretary of State's office to make this process convenient and understandable for all businesses. The First Stop Shop was set up to streamline the registration, licensing and permitting, and tax process for businesses, allowing most of these functions to be accomplished through one office. It serves as a "licensing information center" that can direct you to the proper state and local licensing and taxing authorities.
Start with the First Stop Shop, where you can get a handy checklist of agencies you need to contact for the permits and licenses you need. The physical office is on the 20th floor of the State Capitol in Baton Rouge, or you can use the phone or Web contacts listed here.
8. Obtain financing
If you are a small business and are unable to obtain sufficient funding through personal and family sources, the U.S. Small Business Administration may be the best place to start looking for the capital you need. The SBA offers several types of loans to prospective small business owners: loans made by private lenders (usually banks) that are guaranteed by the SBA. While the SBA is not a bank, it does have an important function in the commercial lending market, extending guarantees or participation when a bank is unable or unwilling to provide the small business' entire financing by itself.
The State of Louisiana also offers a wide range of programs that provide or support key financing for both start-up ventures and major capital projects. The Louisiana Economic Development Corporation administers several programs for small Louisiana businesses, ranging from loan guarantees, participations and grants to venture capital investment. You can learn more about these and other loan and venture capital programs in Louisiana in the Incentives & Financing section of this guide.
9. Choose key vendors
Whatever your size, certain basic services and suppliers will be critical to your business:
- Legal services. Your attorney will be able to help you comply with the law, check out a business opportunity, prepare legal documents, and negotiate deals. Most legal problems that impact small business are avoidable and are the results of actions taken or not taken in the absence of professional legal advice.
- Banking and accounting. Finding the right financial institution and the right accounting advice-right from the start-will help you handle all of the transactional and recordkeeping necessities of doing business.
- Insurance. Every business should have a general business insurance policy that includes liability and other standard coverages. If you have employees, you are also required to have workers' compensation insurance, and you may also want to offer a group health coverage plan as a benefit. Louisiana has several group health providers who offer a variety of plans to match different business sizes and needs. Some trade organizations also offer special plans for their members. The resources below can help you learn more about your insurance needs.
CONTACTS
Louisiana Small Business Development Centers
(located throughout the state)
(318) 342-5506
Louisiana Secretary of State
Commercial Division, Corporations Section
P. O. Box 94125
Baton Rouge, LA 70804-9125
Ph: (225) 925-4704
Fax: (225) 925-4726
Email: commercial@sos.louisiana.gov
First Stop Shop
P.O. Box 44279
Baton Rouge, LA 70804-4279
Phone: (225) 342-4479 or 1-866-213-6225
Fax: (225) 342-0513
E-mail: fss@sos.louisiana.gov
Louisiana State Bar Association
Louisiana Bankers Association
Society of Louisiana CPAs
Louisiana Department of Labor Office of Workers' Compensation Administration
Louisiana Department of Insurance
Insurance Information Institute
Sources: U.S. Small Business Administration, Louisiana Economic Development "Business Resource Guide," "Guide to Doing Business in New Orleans."
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