In Louisiana, you may incorporate a S corporation (S corp) by founding a limited liability company (LLC) or a corporation and then choosing S corp status from the IRS when applying for your EIN.
An S corporation is a tax categorization, not a company structure, according to the IRS. The S corp classification is used to lower a company’s tax burden.
In our How to Start a S Corp in Louisiana tutorial, we’ll walk you through the steps.
Table of Contents
Considerations Before Forming a S Corp
You must examine the following things before founding a S corporation:
Is a S corporation the best option for your company?
S corporation limitations
Why is an LLC the ideal structure for the S corporation tax status?
Are the tax benefits of a S corporation good for you?
Is a S Corporation the Best Business Structure for You?
Restrictions on S Corporations
S corporations are restricted to one class of stock and 100 stockholders, among other things. For more information, see our What Is a S Corporation? guide.
Why is an LLC the best structure for S Corporation tax status?
As entrepreneurs, we feel that incorporating a S corporation via an LLC is the best option since the benefits of founding a corporation are offset by S corp limitations. LLCs are also less difficult to manage than corporations.
Are S Corporation Tax Benefits Right for You?
You must determine if the S corp tax status is preferable to the default LLC tax status for your company. Read our LLC vs. S corp tutorial to fully grasp the tax benefits of a S corp.
How to Form a S Corporation
There are two major methods to form a S corporation:
When requesting your employee identification number, organize an LLC and obtain S corp tax status from the IRS (EIN)
By creating a company and applying to the IRS for S corp status
We do not advocate forming a company with the S corp tax status since it undermines all of the advantages of forming a corporation.
Forming an LLC and Choosing S Corp Status in Louisiana
To form an LLC and elect S corp status, follow these five simple steps:
Step 1: Give Your LLC a Name
Step 2: Select a Registered Agent.
Step 3: Submit the Articles of Incorporation.
Create an Operating Agreement in Step 4
Step 5: Obtain an EIN and submit Form 2553 to elect S Corporation tax status.
Step 1: Give Your LLC a Name
The first and most significant step in forming an LLC in Louisiana is deciding on a name.
Make sure your name conforms with Louisiana naming regulations and is readily searched by prospective customers.
1. Follow these Louisiana LLC naming guidelines:
The word “limited liability corporation” or the acronyms LLC or LC must appear in your name.
Your name cannot indicate that the LLC was formed for any illegal or non-outlined reason in its Articles of Organization.
Certain terms must be included with permission:
The terms “engineer,” “engineering,” “surveyor,” and “surveying” must be approved by the Louisiana Professional Engineering and Land Surveying Board (or any variations).
Any of the following terms must be approved by the Louisiana Commissioner of the Office of Financial Institutions: bank, banker, banking, savings, safe deposit, trust, trustee, building and loan, homestead, or credit union.
Unless the LLC is an independent insurance agency or brokerage company, your name cannot contain the term “insurance.”
The word “doing business as” or the abbreviation “d/b/a” cannot appear in your name.
Your LLC’s name cannot include terms that may be confused with a government organization (FBI, Treasury, State Department, etc.).
Your name must be distinct from any other current company in the state. This lists reserved names in Louisiana.
The phrases “low-profit limited liability company,” the abbreviation “L3C,” or the abbreviation “l3c” must appear in the names of low-profit limited liability corporations.
2. Is the surname legal in Louisiana? To determine whether your chosen LLC name is available, utilize the business filings search on the Louisiana Secretary of State website.
3.Before creating an LLC in Louisiana online, you must first complete a Name Reservation Form, which may be done online or in paper copy. Prior to formation, you must apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) if your reservation is authorized.
4. Is the URL still available? We suggest that you check to see whether your company’s name is accessible as a web domain. Even if you don’t intend to construct a company website right away, you may want to purchase the URL to prevent others from gaining it.
Step 2: Select a Louisiana Registered Agent
Your Louisiana LLC must have a registered agent.
A registered agent for your LLC will accept legal papers and tax notifications on your behalf. When you submit your LLC’s Articles of Organization, you will name your registered agent.
Many company owners opt to use the services of a registered agent. Many of these firms will incorporate your LLC for a modest price and provide free registered agent services for the first year.
Consent to Appointment of a Louisiana Registered Agent
In Louisiana, registered agents must agree to their appointment by signing the Articles of Organization of the LLC in front of a notary public.
Step 3: Submit the Louisiana LLC Articles of Organization to the Secretary of State.
To properly register an LLC, the Louisiana Articles of Organization are utilized.
Step 4: Draft an Operating Agreement for your LLC.
An LLC operating agreement is a legal document that defines your LLC’s ownership and member responsibilities.
Step 5: Apply for an EIN and fill out Form 2553 on the IRS website.
An EIN is a number assigned by the US Internal Revenue Service (IRS) to companies in order to identify and tax them. It is basically a business’s Social Security number.
When you apply directly with the IRS, EINs are free.
Select S Corporation Tax Status
The IRS will give a link to Form 2553, the Election by a Small Business form, during the online EIN application process.