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Business Resource Guide


Table of Contents

Introduction

Starting a New Business in Louisiana

Business Registration

Permits and Licensing

Local Taxes

Frequently Asked Questions

Additional Business Resources

Economic Development Contacts

Regional Economic Development Offices

Business Counseling Centers

INTRODUCTION

Starting a New Business in Louisiana

Louisiana is interested in helping you start a new business in or assisting in relocating an existing one to the state. The following section of this guide is aimed at entrepreneurs and small business owners interested in starting or expanding a business. A number of decisions must be made to insure that the newly developed business starts properly and has the maximum opportunity for success.

I. Defining Your Business

Whether you want to open a manufacturing facility, retail outlet or high-tech firm, you must have very specific ideas about what you want to offer. Developing a business plan will help to insure you clearly define your business, products or services, potential customers, financial needs, sales projections and more.

This guide lists numerous resources that can assist in developing a business plan, starting with the LED Regional Representative who can put you in touch with entities within the state such as the small business development centers (SBDCs) at your local university that can work with you in developing a solid plan. The LED Regional Representative, nearest SBDC, as well as numerous other resources can be found in the Business and Technical Assistance section of this resource guide.

II. Legal Considerations

Once a clear description and vision of your new business has been defined, you must decide on the corporate or legal structure of the business. In making this decision, it is wise to contact an attorney and accountant to provide advice on the most effective structure based on your business idea and current financial situation. Each type of business structure has advantages and disadvantages, and it is the expertise of good practitioners that will benefit you in the long run. Examples of corporate structure or legal status for the entity are:

  • Proprietorships - unincorporated business founded by an individual
  • Partnerships - unincorporated business founded by two or more individuals
  • Corporations - an entity that is separate from its owners and is recognized by government as an entity independent of its owners
  • Limited Liability Company (LLC) - an unincorporated association that has the combined benefits of a partnership and a corporation (sub-S).

III. New Business Registration and Licensing & Permitting

Louisiana's First Stop Shop Division can make starting a business in Louisiana easy. It has streamlined the registration, licensing & permitting, and tax process so that all can be accomplished in one office.

Write, phone, fax or e-mail as shown below to find out what is required of you as a new business operator in Louisiana:

Secretary of State
One Stop Shop Division
P.O. Box 94125
Baton Rouge, LA 70804-9125
Phone: (225) 922-2675
Fax: (225) 922-0439
E-mail: fss@sos.louisiana.gov

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Business Registration

Many businesses and professionals are required to register with the State before they can operate in Louisiana. Information on the requirements and the forms that need to be submitted can be found in Adobe Portable Document Format from the Secretary of State's web site at: http://www.sos.louisiana.gov/comm/comm-index.htm. This office will also assist in obtaining an Employer Tax Identification Number.

Examples of forms that can be found at that site include:

  • Articles of Incorporation
  • Initial Report for Louisiana business
  • Application of a Foreign Corporation
  • Articles of Incorporation - Limited Liability Company
  • Trade name, trade mark, and service mark - Registration
  • Partnership Registration
  • Name Reservation for LLC

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Permits and Licensing

The proper federal, state and local business license permits allowing a legal entity to operate in Louisiana must be obtained before the start of business. Resources for each geographic area can be found in this resource guide. However, it is advisable to begin with Louisiana's First Stop Shop in the Secretary of State's office in Baton Rouge.

Contacts at the local level for permitting, occupational licensing, certificates of occupancy, and sales/use & property taxes can be found in the Local Government section of this guide. The local offices will guide you in the right direction on what forms and procedures are necessary to operate in the community in which your business will be located.

The First Stop Shop Division maintains a database of local contacts in the office and can be helpful in obtaining additional information about starting and operating a business in Louisiana. Visit the division's web site at http://www.sos.louisiana.gov/comm/fss/fss-index.htm.

Depending on the type of business, the following licenses and permits may be required:

Certificate of occupancy - This permit is issued by the local or parish government upon determination that your particular type of business is located in the proper zone.

State occupational license - This license is often required for many professions and occupations in Louisiana.

Local occupational license - City and/or parish government issues this license, which is determined by type of business.

Local food permit - This permit is required by the local governing authority for businesses dealing with food, so it is normally obtained through the local health office.

State beverage or tobacco permit - This permit is required of businesses selling beer, liquor, soft drinks, or tobacco.

IV. Taxes

State Taxes

Louisiana law defines several types of taxes that must be either paid or collected by businesses operating in the state. Information on state taxes, forms & filing can be found on the Louisiana Department of Revenue web site at www.rev.state.la.us.

  • Individual income tax - Individuals drawing income in Louisiana pay state taxes.
  • Corporate income tax - Corporations deriving income in Louisiana pay income taxes ranging from 4% - 8%.
  • Corporate franchise tax - Louisiana corporations pay $1.50 per $1,000 income up to $300,000.
  • Unemployment insurance tax - All Louisiana employers are required to pay both state and federal unemployment insurance taxes.
  • Sales & use tax - The state sales & use tax is 4%.
  • Miscellaneous taxes and fees - Such as gas & diesel fuel, and fees for licensing and permits.

The Louisiana Department of Revenue and Taxation has regional offices that can assist businesses in the taxation process. The contact information for your business is outlined in the Regional Government section of this guide.

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Local Taxes

Most parishes and many municipalities have various taxes in support of local government's efforts to provide services to residents and businesses. The following are the local level taxes:

  • Sales & use tax - This tax rate varies by location or use, but has ranged from 1% - 4.5% (combined city/parish)
  • Property tax - Louisiana business owners pay only local property taxes, which vary from location to location.

V. Insurance

Depending on the type and nature of your business, there are many insurance options for both your company and your employees. You will need to be familiar with the following if operating a business in Louisiana:

  • Workmen's Compensation
  • Liability
  • Property
  • Owner Personal (Life, Key Employee, Retirement, etc.)

Louisiana's Department of Insurance can answer your questions about insurance liability in the state. Many frequently asked questions, forms and publications are posted on the department's web site at www.ldi.state.la.us.

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FREQUENTLY ASKED QUESTIONS

1. What are the steps for starting a business?

Louisiana Economic Development has developed six steps to consider in starting a business. They are as follows:

  • Determining Experience - Do you have the burning desire to start and operate a business and do you have the experience in marketing, management, technical competence, and financial know-how necessary to succeed?
  • Evaluating the Risk - Can you take handle the risk associated with starting a business? Do you have the financial resources to undertake an entrepreneurial venture and leave your present employment?
  • Initial Financing - Do you have the financial resources or can you raise the capital required to fund the business? There are no grants to start a business and 100% loans are often non-existent. Are you willing to give up a percentage of the company to raise equity capital for the business?
  • Devising a Business Plan - Do you have a business plan or are you willing to write and follow one? Business plans are critical in the development and operation of a successful business. Contact the SBDC or business incubator in your area for assistance in developing a business plan.
  • Registering Your Business - Once the business plan is complete, it is important to choose the proper legal structure for the business and register the business with all necessary governmental entities.
  • Contact Louisiana Economic Development - Contact LED for firsthand assistance and referrals to the many Louisiana entities waiting to assist you. www.led.louisiana.gov

Checklist of Requirements for Louisiana Businesses

  1. Select a corporate or legal structure for your business.
  2. Complete a new entity filing with the Secretary of State's Commercial Division.
  3. Apply for a federal tax identification number on Form SS-4 (800-829-1040).
  4. Check on all local zoning ordinances and other restrictions affecting your business.
  5. Determine if your business requires a local, state or federal permit or license.
  6. Register for sales and use tax permits with the appropriate local agencies.
  7. File initial report and articles of incorporation with the Secretary of State.
  8. Establish procedures to ensure timely payment of payroll and sales taxes.


Activity
State
Local
Parish
Sales and Use Tax
Yes
Yes
Yes
Excise Tax
Yes
No
No
Unemployment Compensation Insurance
Yes
No
No
Property Tax
No
Yes
Yes
Occupational License
No
Yes
Yes
Certificates of Occupancy
No
Yes
Yes
Food Permits
Yes
Yes
Yes
Alcohol Permits
Yes
Yes
Yes
Environmental Licenses and Permits
Yes
No
No
New Business Registration
Yes
Yes
Yes

2. What is the First Stop Shop?

The First Stop Shop is a "licensing information center" for prospective small business owners. The First Stop Shop gives current and potential business owners a single place to go for licensing information needed to start a business in Louisiana.

One of the innovations provided by the First Stop Shop legislation is the state's licensing liaisons. Every state agency that deals with business or licensing designates an officer or employee to serve as its business-licensing liaison. The primary purpose of the program is to facilitate business by providing a central system for the determination of what licenses and permits must be obtained and maintained by individuals conducting business in the state.

3. Must I register with the Louisiana Department of Revenue?

Any business that engages in sale of any kind must register with the Louisiana Department of Revenue. The web site is http://www.revenue.louisiana.gov.

For more information either contact the regional office listed in the Regional Government section of this guide or the main office: Louisiana Department of Revenue, 225-925-7318. It is located at 617 North Third Street, LaSalle Building, Baton Rouge, Louisiana 70802.

Corporate Income and Franchise Tax information can be obtained by contacting the above website or by calling the Income and Corporate Franchise Tax Section at 225-925-4611.

4. How do I get a federal tax identification number?

Federal Tax ID information: SS-4: Application for Employer Identification Number.

Call toll free at 1-866-816-2065 to get an employer Identification Number (EIN). Employers can also fax EIN requests to the IRS at 1-859-669-5760.

To order a business tax kit, write IRS, PO Box 30529, New Orleans, LA 70190-0529 or call 1-800-829-1040.

To get a copy of the free "Small Business Resource Guide" CD go to http://www.irs.gov/businesses/small/article/0,,id=101169,00.html or call 1-800-829-3676.

5. Do I have to register my business if I am operating as a sole proprietorship?

Sole proprietorships are not regulated by the state. You may be required to obtain a business license from the city or parish in which you are operating.

6. How do I reserve the name for my corporation or entity?

Contact the Corporate Division of the Secretary of State's Office and check the availability of the selected name. If the name is available, you can reserve it pending the completion of the corporation process. Contact the office at: 225-925-4704 or visit their web site at www.sos.louisiana.gov and select "commercial division."

7. How do I make my idea for a business come to reality?

There are a number of steps necessary to transform an idea into a business. First, it is important to have a business plan prepared (or feasibility study) for your business. Assistance for this can be obtained from the Small Business Development Center operating in your area. Also, you can get assistance from universities, local SCORE chapters, community and vo-tech colleges, and other institutions of higher learning.

Once the feasibility for the venture is determined and a business plan is prepared, contact an attorney and accountant for advice on establishing the proper business structure for your business. Next contact the Secretary of State's First Stop Shop. This will allow you to reserve a name for the entity, solidify the legal structure and fill out any required permits and registrations. Contact the IRS for a federal tax identification number and begin the process to secure funding for the venture.

Contact the City and Parish governmental units and file necessary occupational licenses and occupancy permits. Now you are ready to implement the business plan and start your business.

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