Setting Up a Business Partnership in Louisiana

Louisiana recognizes several types of partnerships: General Partnerships, Limited Partnerships (LP), and Limited Liability Partnerships (LLP). Each structure offers different liability protections and tax implications. General partnerships provide no liability protection, while LLPs offer some protection for partners. Consider your business needs, risk tolerance, and growth plans when selecting the appropriate structure. Consult with a business attorney to understand the implications of each option.

Choose a unique name for your partnership that complies with Louisiana naming requirements. For LLPs, the name must contain 'Limited Liability Partnership' or 'LLP.' Conduct a name search through the Louisiana Secretary of State's database to ensure availability. Consider trademark issues and domain name availability for your online presence.

While not legally required in Louisiana, a written partnership agreement is strongly recommended. This document should outline ownership percentages, profit and loss distribution, management responsibilities, dispute resolution procedures, and exit strategies. Without a written agreement, your partnership will be governed by the default provisions in the Louisiana Civil Code, which may not align with your intentions.

Create a document detailing each partner's initial and ongoing capital contributions to the business. Specify the type of contributions (cash, property, services), valuation methods, timing of contributions, and how capital accounts will be maintained. This agreement helps prevent future disputes about ownership stakes and financial obligations.

Prepare a buy-sell agreement that establishes procedures for handling ownership changes due to a partner's death, disability, retirement, or voluntary exit. Include valuation methods for partnership interests, payment terms, and funding mechanisms (such as life insurance). This agreement provides stability and continuity for the business during ownership transitions.

Document the day-to-day operational procedures for your partnership, including decision-making processes, meeting schedules, voting rights, record-keeping requirements, and internal reporting procedures. Clear operating procedures help prevent misunderstandings and ensure consistent business operations.

For LLPs, file a Certificate of Partnership with the Louisiana Secretary of State. General partnerships are not required to file formation documents but may file a Statement of Partnership Authority. For LPs, file a Certificate of Limited Partnership. The filing fee is approximately $100-$150 depending on the partnership type. Forms are available on the Secretary of State's website.

If operating under a name different from the legal name of the partnership or partners, file a Fictitious Business Name Statement (also called 'doing business as' or DBA) with the parish clerk of court where your business is located. Publication requirements may apply in certain parishes. Fees vary by parish but typically range from $25-$50.

Apply for an EIN from the Internal Revenue Service (IRS). This is required for partnerships regardless of whether you have employees. The EIN is used for tax filing purposes and opening business bank accounts. Apply online through the IRS website at no cost, and you'll typically receive your EIN immediately.

Open a separate business bank account for your partnership using your EIN and partnership documentation. Keeping business and personal finances separate is crucial for liability protection and proper accounting. Prepare a Business Bank Account Resolution authorizing specific partners to conduct banking activities on behalf of the partnership.

Register with the Louisiana Department of Revenue for applicable state taxes. Partnerships must file annual information returns, though the partnership itself doesn't pay income tax. Partners report their share of income on individual returns. If selling goods, apply for a Sales Tax Permit. Also register for employer taxes if hiring employees.

Research and obtain all necessary business licenses and permits at the state, parish, and local levels. Requirements vary based on your business activity and location. Contact your local parish clerk's office and city hall to determine specific requirements. Professional services may require additional licensing from state boards.

Ensure your business location complies with local zoning ordinances. Contact your local zoning department to verify that your intended business activities are permitted at your chosen location. Home-based businesses may face restrictions or require special permits in certain areas.

Secure appropriate business insurance coverage. General liability insurance is recommended for all partnerships. Consider professional liability insurance, property insurance, business interruption insurance, and workers' compensation insurance (if you have employees). Louisiana requires workers' compensation coverage for businesses with employees.

Establish proper accounting and record-keeping systems to track income, expenses, assets, liabilities, and partner capital accounts. Louisiana partnerships must maintain certain records, including financial statements, tax returns, and partnership meeting minutes. Consider hiring an accountant familiar with partnership taxation.

Create a compliance calendar to track ongoing filing requirements. Partnerships in Louisiana must file annual reports with the Secretary of State (for LLPs and LPs) and annual tax returns. Set reminders for renewal deadlines for licenses, permits, and insurance policies to maintain good standing.