How to Start a Limited Liability Partnership in Louisiana | 2024 Guide

Start a Limited Liability Partnership in Louisiana

A Limited Liability Partnership (LLP) is a popular business structure offering the flexibility of a partnership while providing limited liability protection like starting an LLC in Louisiana. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in Louisiana, this comprehensive guide will walk you through the necessary steps, from researching and planning to ongoing compliance and reporting requirements.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Louisiana LLP, all the steps in this article must guide you.

What is a Limited Liability Partnership?

Forming an LLP is like starting an LLC as well. However, there are differences in terms of it. A Limited Liability Partnership (LLP) is a type of business structure that combines elements of partnerships and corporations. It allows multiple individuals, known as partners, to jointly own and manage the business while providing limited liability protection to each partner. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.

LLPs are popular among professional service providers, such as lawyers, accountants, and consultants, as they allow for flexible management structures and profit-sharing arrangements. The partners in an LLP can directly manage the business, unlike forming a Corporation in Louisiana, where a board of directors typically handles the management.

Each partner’s liability is also limited to the extent of their investment, and they are not personally responsible for the negligence or misconduct of other partners. This is a key difference between an LLP and Louisiana General Partnership, where partners have unlimited liability for the partnership’s actions and other partners.

It is suggested that you speak with a legal professional before you begin setting up your limited liability partnership. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited liability partnership.

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Steps in Starting a Limited Liability Partnership in Louisiana

To form a limited liability partnership in Louisiana, you must consider following the below guidelines that include research and planning, choosing an LLP name, designating a Resident Agent, filing for Articles of Organization, drafting a partnership agreement, get an EIN, obtaining necessary licenses and permits, the opening of business bank account and maintain ongoing compliance and reporting requirements. 

Step 1: Research and Planning

Before forming an LLP in Louisiana, you must familiarize yourself with the state’s laws and regulations governing LLPs. Conduct thorough research to determine if an LLP is the right business structure for your needs, and create a detailed business plan outlining your goals, strategies, and financial projections.

Step 2: Choose an LLP Name

Selecting a unique and appropriate name for your LLP is crucial. First, check the availability of your desired LLP name with the Louisiana business registry. Ensure that your chosen name follows Louisiana naming guidelines and requirements, which typically include the use of “Limited Liability Partnership” or “LLP” in the name. You can register and reserve the name with Louisiana Secretary of State if desired.

Here are some guidelines you must follow while naming your LLP in Louisiana- 

  • Be distinguishable from other businesses registered in your state
  • Include the words “Limited Liability Partnership,” “LLP,” or a similar abbreviation.
  • Not include words that are restricted by your state
  • Ensure that your chosen name does not infringe on any existing trademarks or intellectual property rights.

However, to check the availability of your desired LLP name, you can also search the Louisiana Secretary of State business name database and Louisiana Business Name Search. If the name is available, you may choose to reserve it for a specific period of 60 days by filing a name reservation application and paying the online name reservation fee of $25 and mail name reservation fee of $25. If your LLP plans to operate under a name other than its legal name, you may also need to register a fictitious or “Doing Business As” (DBA) name. 

The DBA filing can be done by three methods, online, by mail, and in person filing, which costs around $75 Filing Fee and $300 for 24-hour Expedited fiiling. In addition, the DBA’s validity in Louisiana is ten years, which you can file in the Louisiana Secretary of State.

You can check out how to file a DBA in Louisiana for clearer understanding.

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Step 3: Designate a Resident Agent

In Louisiana, you’ll need to designate a Resident Agent for your LLP. The Resident Agent is responsible for receiving the partnership’s important legal and tax documents. Choose a qualified individual or Louisiana Resident Agent Services to serve as your LLP’s Resident Agent, ensuring that they meet Louisiana requirements.

However, If you plan to become a Resident Agent of your own LLP, follow the steps below. Also, this applies a guideline in hiring your registered agent.

  • Research the requirements in the state where you want to offer your service. Each state has specific criteria, such as having a physical address and being available during normal business hours.
  • Obtain a physical address in the state(s) if needed.
  • Be familiar with the rules, regulations, and compliance requirements for businesses in your state.
  • Create a business plan outlining your services, pricing, and marketing strategy.
  • Register your business entity, such as an LLP, if required.

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Step 4: File a Certificate of Limited Liability Partnership

To officially form your LLP, you must file a Certificate of Limited Liability Partnership with the Louisiana Secretary of State. Obtain the necessary forms and provide the required information, such as the LLP name, principal office address, registered agent’s name and address, names and addresses of partners, and management structure. Pay the required filing fee and submit the completed forms to the Louisiana Secretary of State’s office.

Step 5: Draft a Partnership Agreement

A well-crafted partnership agreement is essential for governing your LLP and protecting the interests of its partners. This document should cover crucial provisions such as roles and responsibilities of partners, profit and loss sharing, decision-making processes, partner admission and withdrawal, and dispute resolution. Consider having the partnership agreement reviewed by an attorney to ensure its completeness and compliance with Louisiana laws.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of Louisiana. The default laws in Louisiana might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain Louisiana Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The application of an EIN can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your specific industry, you may need to obtain Louisiana Business Licenses and permits to operate your LLP. Research your business’s licensing and permit requirements and apply for them accordingly.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in Louisiana.

Step 8: Open a Business Bank Account and Obtain Insurance

Maintaining clear financial records is crucial for any business, so open a separate bank account for your Louisiana LLP. Additionally, obtain the necessary Louisiana Business Insurance, such as general liability insurance, professional liability insurance (if applicable), and workers’ compensation insurance (if you have employees). 

Check the Best Bank for Small Businesses in Louisiana to open a bank account.

Step 9: Maintain Compliance and Reporting Requirements

Stay informed about and comply with relevant laws and regulations to keep your LLP in good standing. File Annual Reports with the Louisiana Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, Louisiana, and local levels.

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Advantages of Forming a Limited Liability Partnership in Louisiana

While the specific advantages of forming an LLP in Louisiana can vary depending on the state’s unique laws and regulations, several public benefits associated with LLPs often apply across jurisdictions. Here are some advantages to consider when forming an LLP in Louisiana:

  • Limited Liability Protection: One of the main benefits of an LLP is its limited liability protection to its partners. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.
  • Pass-through Taxation: An LLP typically enjoys pass-through taxation, which means that the profits and losses of the business are passed through to the partners, who report them on their personal income tax returns. This avoids the double taxation often associated with corporations.
  • Flexible Management Structure: Unlike corporations requiring a board of directors, LLPs allow for a more flexible management structure. Partners in an LLP can directly manage the business and make decisions without needing a formal board.
  • Profit-sharing Flexibility: The partnership agreement can outline the distribution of profits and losses among partners, allowing for a customized profit-sharing arrangement based on the partners’ preferences and contributions.
  • Easier Formation and Compliance: Forming an LLP is generally less complicated and expensive than forming a corporation. Ongoing compliance requirements may also be less burdensome than other business entities, depending on the specific laws and regulations in Louisiana.
  • Professional Credibility: Forming an LLP can enhance your business’s professional credibility, as it demonstrates a commitment to a formal business structure and can offer reassurance to clients, customers, and potential investors.

Bear in mind that the advantages of forming an LLP in Louisiana may vary based on the specific laws and regulations governing LLPs. Researching the applicable laws and consulting with legal or financial advisors is essential to fully understand the benefits and requirements of forming an LLP in Louisiana.

Cost of Forming an LLP in Louisiana

The cost of forming an LLP in Louisiana may vary depending on the required filing fees and any additional services you may need. The filing fee for a Certificate of Limited Liability Partnership typically ranges from $50 to $200, depending on the state.

Can I Form an LLP in Other States?

You can form an LLP (Limited Liability Partnership) in other states. To form an LLP in a different state, you must follow that state’s specific registration requirements and filing procedures. This usually involves filing an application or certificate of registration, paying a registration fee, and obtaining any necessary permits or licenses.

Additionally, you may need to register your LLP as Louisiana Foreign LLC if you plan to conduct business in multiple states. It is advisable to consult with an attorney or a business consultant familiar with the laws and regulations of the state where you plan to form your LLP.

Can an LLP Need to Have One Owner?

An LLP (Limited Liability Partnership) cannot have just one owner. By definition, an LLP is a partnership, which means it requires at least two partners to be formed. If you want a business structure with limited liability protection and only one owner, you may consider forming a Single-Member LLC in Louisiana instead. An LLC can have one or more owners, known as members, and offers limited liability protection and pass-through taxation. The requirements for forming an LLC will vary by state, so consult your state’s laws and regulations.

FAQs

What is a limited liability partnership (LLP) in Louisiana?
An LLP is a type of business structure in Louisiana that limits the personal liability of its partners for the company’s debts or legal obligations.
How is an LLP formed in Louisiana?
In Louisiana, an LLP is formed by filing a registration form with the Louisiana Secretary of State and paying the required fees.
Do all partners in a Louisiana LLP have limited liability?
Yes, all partners in a Louisiana LLP have limited liability protection for the company’s debts and legal obligations.
What are the filing fees for starting an LLP in Louisiana?
The filing fees for starting an LLP in Louisiana are subject to change, but as of this writing, it costs $100 to file the registration form.
Can non-residents start an LLP in Louisiana?
Yes, non-residents can start an LLP in Louisiana as long as they follow the state’s registration requirements.
Can an LLP in Louisiana have only one partner?
No, in Louisiana, an LLP must have two or more partners.
What happens if a partner in a Louisiana LLP dies or leaves the partnership?
In Louisiana, if a partner in an LLP dies or leaves the partnership, the remaining partners may continue the business or choose to dissolve the LLP.
Are Louisiana LLPs required to have a registered agent?
Yes, in Louisiana, all LLPs are required to have a registered agent, who must have a physical street address in the state.
Can a limited liability company (LLC) convert to an LLP in Louisiana?
Yes, a Louisiana LLC can convert to an LLP by filing the necessary paperwork with the Secretary of State and following all state regulations.
Are there annual reporting requirements for Louisiana LLPs?
Louisiana LLPs are required to file annual reports with the Secretary of State and pay the associated fees to remain in good standing.
Can an LLP in Louisiana operate under a different name than the registered name?
Yes, an LLP in Louisiana can operate under a different name than the registered name as long as it files an assumed name registration and pays the associated fees.
How are profits and losses divided among partners in a Louisiana LLP?
In Louisiana, partners can agree on their profit and loss distribution however they see fit in the LLP’s operating agreement.
Do partners in a Louisiana LLP have to report their share of profits and losses on their personal tax returns?
Yes, partners in a Louisiana LLP do have to report their share of profits and losses on their personal tax returns.
Can a partner in a Louisiana LLP be another business, corporation, or LLC?
Yes, businesses, corporations, and LLCs can be partners in a Louisiana LLP, but they may need to be registered to operate in the state.
Are there any special requirements for partners in a professional service LLP in Louisiana?
Yes, partners in a professional service LLP in Louisiana must be licensed professionals and adhere to any industry-specific regulations.
Are members of a Louisiana LLP considered employees, or are they self-employed?
Members of a Louisiana LLP are considered self-employed and must pay self-employment taxes.
Is there a minimum contribution requirement for starting an LLP in Louisiana?
No, there is no minimum contribution requirement for starting an LLP in Louisiana.
Can a Louisiana LLP have foreign partners?
Yes, a Louisiana LLP can have foreign partners as long as they follow any applicable laws or regulations.
Can a partner in a Louisiana LLP still be held personally liable for their own actions?
Yes, partners in a Louisiana LLP can still be held personally liable if their own negligent actions contribute to the harm or damages suffered by others.
Can a Louisiana LLP operate as a non-profit organization?
No, a Louisiana LLP cannot operate as a non-profit organization. Non-profit organizations must be set up through a different legal structure.
Can a partner in a Louisiana LLP be sued individually?
Yes, partners in a Louisiana LLP can be sued individually for their own actions, but not for the actions of the other partners.
Can a Louisiana LLP be sued as an entity?
Yes, a Louisiana LLP can be sued as an entity for its actions or inaction as a business.
Is a written partnership agreement required for Louisiana LLPs?
While not specifically required, it is highly recommended for all Louisiana LLPs to have a written partnership agreement in place.
Can partners in a Louisiana LLP be employees of the business?
Yes, partners in a Louisiana LLP can also be employees of the business and receive a salary or wage for their work.
Are Louisiana LLPs required to have a board of directors?
No, Louisiana LLPs do not require a board of directors. The partners usually manage and make decisions for the business.
Can the partners in a Louisiana LLP decide to convert the business to a different legal structure in the future?
Yes, the partners in a Louisiana LLP can decide to convert the business to a different legal structure in the future as long as they follow the state’s rules and regulations.
How long does it take to form an LLP in Louisiana?
The timeline for registering an LLP in Louisiana can vary depending on the complexity of the partnership agreement and the timeliness of the filing process.
Can Louisiana LLPs be managed by non-partners?
Yes, Louisiana LLPs can be managed by a non-partner designated by the partners.
How can I dissolve an LLP in Louisiana?
To dissolve a Louisiana LLP, the partners must file dissolution paperwork with the Secretary of State and pay any outstanding debts or liabilities.
What is a limited liability partnership?
A limited liability partnership (LLP) is a type of business structure that provides its owners with limited liability protection and pass-through taxation.
How do I form an LLP in Louisiana?
To form an LLP in Louisiana, you need to file a Certificate of Partnership with the Louisiana Secretary of State and pay the necessary filing fees.
Can single-member LLPs exist in Louisiana?
Yes, single-member LLPs are allowed in Louisiana.
What are the advantages of forming an LLP in Louisiana?
Some of the advantages of forming an LLP in Louisiana include limited liability protection, pass-through taxation, and its ability to be managed by its partners.
How many partners are required to form an LLP in Louisiana?
Unlike traditional partnerships, which require at least two partners, Louisiana LLPs can be formed by a single person or multiple partners.
Can LLPs in Louisiana be taxed as corporations?
Yes, LLPs in Louisiana can elect to be taxed as corporations if they meet certain criteria.
What is a registered agent and how do I get one for my LLP in Louisiana?
A registered agent is a person or entity designated to receive legal and tax documents on behalf of a business. You can either appoint a registered agent yourself or use a professional service.
What types of businesses are allowed to form LLPs in Louisiana?
LLPs can be formed by any type of business, including professional service firms like law or accounting.
How do I dissolve an LLP in Louisiana?
To dissolve an LLP in Louisiana, you need to file a Certificate of Cancellation with the Secretary of State and pay any required fees.
Does forming an LLP in Louisiana require any ongoing filings or fees?
Yes, LLPs in Louisiana must file an annual report and pay an annual fee to the Secretary of State to maintain their status.
Can I convert my existing business to an LLP in Louisiana?
Yes, you can convert your existing business to an LLP in Louisiana by filing the necessary paperwork with the Secretary of State.
How is the management of an LLP in Louisiana structured?
The management of an LLP in Louisiana is typically handled by its partners, who have an equal say in the business’s operations and decisions.
What if a partner wants to leave the LLP in Louisiana?
If a partner wants to leave an LLP in Louisiana, they must follow the procedures outlined in the partnership agreement, which may include buying out their share of the business or renegotiating the terms of their departure.
Can LLPs in Louisiana be sued?
Yes, LLPs in Louisiana can be sued for their actions or omissions, but only the assets of the business itself are exposed to liability, protecting the personal assets of the partners.
Do LLPs in Louisiana have to hold annual meetings?
Not necessarily, but it is recommended that LLPs in Louisiana hold annual meetings to review the business’s finances and operations.
Can LLPs in Louisiana have employees?
Yes, LLPs in Louisiana can employ staff and contractors to assist with their business operations.
Who can act as a registered agent for my Louisiana LLP?
A registered agent for a Louisiana LLP can be any person or entity that has a physical address in the state and can be available during normal business hours to receive legal and tax documents.
How do I open a bank account for my LLP in Louisiana?
To open a bank account for your LLP in Louisiana, you will need to provide the bank with a Certificate of Good Standing or your filed Certificate of Partnership.
How is an LLP in Louisiana taxed?
In general, Louisiana LLPs are pass-through entities that are not subject to entity-level federal income tax. However, they do have to pay certain state and local taxes.
What is a partnership agreement and is it required for an LLP in Louisiana?
A partnership agreement is a legal document that outlines the terms and conditions of an LLP’s operation. While not required in Louisiana, it is recommended that all partners have a clear and thorough partnership agreement in place.
Can LLPs in Louisiana get business licenses and permits?
Yes, like any other business, LLPs in Louisiana need to obtain appropriate business licenses and permits to operate legally.
Can LLP partners have different levels of ownership and management responsibilities?
Yes, the partners of an LLP in Louisiana can have different levels of ownership and management responsibilities according to their roles and contributions to the business.
What is the liability protection provided by an LLP in Louisiana?
The liability protection provided by an LLP in Louisiana means that the personal assets of the partners are protected in the event of the business being sued or experiencing financial difficulties.
How do I file an amendment for my LLP in Louisiana?
To file an amendment for your LLP in Louisiana, you need to complete and file the necessary forms with the Secretary of State and pay the required fees.
Can LLPs in Louisiana obtain liability insurance?
Yes, LLPs in Louisiana can obtain liability insurance to provide additional protection for their business and its partners.
Can an LLP in Louisiana operate in other states?
LLPs in Louisiana can operate in other states using the same business name, provided they are registered to do so in the other state.

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Conclusion

Starting an LLP in Louisiana may seem daunting, but you can successfully establish and run your business with thorough research, planning, and compliance with legal requirements. Feel free to seek professional assistance from legal or financial advisors when needed to ensure your Limited Liability Partnership’s smooth operation and growth in Louisiana.

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