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Advantages of Incorporating a Business in Louisiana
What makes Louisiana such an attractive state for new businesses? The answer lies in another question – What would you be looking for when establishing a startup company Louisiana? Different people have different perspectives but most businesses would agree on the following:
- A state that offers advantages and benefits
- A destination with a strong and reliable infrastructure
- A skilled and dedicated workforce
The good news is that Louisiana provides all of the above and much more. Small and medium enterprises in the state are not only growing through sales and services within the state and nation but also through exports that totaled $65.1 billion in 2015.
Advantages of setting up an LLC or a Corporation
As one of the top registered agents in the state, we can help you register a new business in Louisiana as this will ensure you are able to leverage all types of business gains and state provided incentives and grants. Let’s take a quick look at why Louisiana is considered one of the best places for establishing a business:
Advantage#1: Salient benefits of Corporation or LLC formation
Corporation
- Change in Ownership: If you register a new company in Louisiana as a Corporation and then convert to an S Corporation, sale, purchase, as well as gifting of stock can facilitate changes in ownership. These changes can take place without affecting the business of the corporation.
- Independent Life: One of the salient advantages of an S Corporation in Louisiana is that it enjoys an independent life. The business entity will continue operation undisturbed even if it experiences incapacitation of one or more stockholders or faces the death of one of its stockholders.
LLC
- Limited Liability: An owner of an LLC startup company in Louisiana, will be able to enjoy limited liability protection, which means claimants can sue the LLC and not the owner or investors.
- Flexible Profit Distribution: An LLC has the benefit of being able to select different ways of distribution of profits.
- No Minutes of meetings: Unlike a corporation, a startup company in Louisiana will not be required to maintain any minutes of the meetings or resolutions.
Advantage#2: Business Incentive Programs
What other benefits does the state of Louisiana offer businesses? In fact, there are several programs that you can benefit from after you register a new business in Louisiana. These include tax credits, loans and grants, and several other incentives. Let’s look at some of the most popular benefits:
- The Enterprise Zone: The EZ program as it is known is basically an incentive program that revolves around creation of new jobs. If your startup company in Louisiana qualifies for this program then you can benefit from franchise as well as income tax credits. You can derive a maximum of $1,000 in tax credits for each new job being created.
- Louisiana Industrial Ad Valorem Tax Exemption Program (ITEP): This is a state incentive program that provides tax incentives to those businesses that are into manufacturing. As a part of this program, you can benefit from 100% property tax abatement for an initial term of five years, which can be extended to three more years.
- Small Business Loan and Guaranty Program: This is another beneficial program that you can leverage on if you register a new company in Louisiana. Most often than not, small businesses require funding assistance and this program provides loans varying from $5,000 to $1.5 million. The program is being administered by Louisiana Economic Development through Louisiana Economic Development Corporation (LEDC).
Apart from the above mentioned programs, there are several other business incentive programs in Louisiana including Small and Emerging Business Development (SEBD) Program, Research and Development Tax Credit, Economic Development Award Program, Quality Jobs Program, Micro Loan Program, Inventory Tax Credit Program, and Small Business Loan Program among others.
Are there any Disadvantages of Incorporating in Louisiana?
You are probably wondering if there are any disadvantages of establishing a startup company in Louisiana. As such, there are no disadvantages except for the time taken to process the registration or incorporation documents and the specific disadvantages of a business like limited life of an LLC. As a state that provides positive business climate and plenty of incentives, the disadvantages for forming an LLC or corporation in Louisiana is definitely not a deterrent in business growth.