Many self-employed Louisiana residents are eager to start their businesses. The simplest and most rational solution to this issue is to join the ranks of sole proprietors.
Organizing and managing a business in this format is the least difficult in America and has no service pitfalls. Although, future business owners will have to adhere to certain norms. Also, be prepared that you will have to face some restrictions regarding the functions of your sole proprietorship.
So, the main task of this manual is to help you answer the essential question – is the business format of an individual enterprise right for you? And, of course, we will tell you which aspects to pay attention to while opening a sole proprietorship and how to set up a business structure in this vein properly.
The Proper Way To Start Business As The Louisiana Sole Proprietor
There is no algorithm for organizing the business work of an individual entrepreneur in Louisiana as for LLC. In addition, the state does not charge additional service fees for the formation or management of this type of business or company. Are you looking to become an individual business owner and start a sole proprietorship in Louisiana? – Just start working!
Though, you still have to go through several additional legal formalities. These service stages are optional. Although many sole proprietors prefer not to neglect them, compliance with these formalities guarantees the legal protection of their interests.
Applying For DBAs
Almost every company and business owner prefers doing business as a DBA. There are many benefits to running a business under an assumed name compared with an entity or LLC. We are talking primarily about creating the business image of your company. Potential clients and consumers will find this approach more professional and give you more confidence. It turns out that a company that uses the real name of its owner is often not competitive.
Let’s clarify that a company owned by sole proprietors can use the DBA to open and manage a business bank account. Customers will appreciate it as one more advantage in favor of the business owner, so they feel more comfortable.
If you are going to launch an enterprise in Louisiana as a sole entrepreneur, then know the features of such registration. So, in this case, you should not register the fictitious name of your company with the Secretary of State of Louisiana. You can choose a name other than your real one and use it without confirmation from the state authority. But if you want to have exclusive rights on the name, get permission to register a special trademark.
But first, of course, make sure that the name is available, and so you can take it for your company. You can find out this information if you go to an online resource Louisiana Business Filings Database.
Clarification & Compliance with Tax Requirements
You can run your business in this format and not hire third-party employees. In this case, you do not need to obtain an EIN (Federal Tax Identification Number) because your Social Security number will replace it. Of course, it would be correct to take care of your confidentiality and still use the EIN and not the SSN.
The nature and the structure of the business activity of individual entrepreneurship determine the list of tax requirements that the state will put forward (as with LLC).
What types of tax fees are paid by sole proprietors, who conduct business in the Louisiana State? These can be excise taxes, sales and premium tax, service tax, and some other business fees. The amount and form of the tax payment depend on the business field. You will find all the updated information about that if you launch the official website of the Louisiana Department of Revenue on your PC.
Open the Business Tax Page there and you will find out all the details of taxes that are relevant to your business. You can submit documents for the registration of a company and make tax payments via service Louisiana File Online.
Business Licenses & Permits
If you conduct business in the state of Louisiana, so you must have several licenses and/or permits to legally carry out your activities. But you are not required to have a general license if you are engaged in sole business activities in this US state – and this is good news for you.
What types of permits will you need to work as an individual entrepreneur in Louisiana? It all depends on the type of your company, and what exactly you are doing (selling goods, services and in which economic field it all goes) It’s easy to find out.
You just need to go to the Internet portal geauzBIZ to discover full information about all types of licenses that are relevant to your business. This web resource is pretty convenient, and with its help, you will quickly figure out your list of permissions.
And don’t forget about local licenses. They are also available in any city in the state of Louisiana. So, if you work in large cities of this state, such as New Orleans, in this case, you should be aware of the special requirements for registration and operation of the enterprise.
You can get a consultation about local licenses if you contact the county or city government.
Louisiana Sole Proprietor: The Notion & Essence
A sole proprietor is not a legal entity! But any corporation and limited liability company (LLC) has this status. As a sole proprietor, you run the business alone (register and manage it on your behalf). It is worth noting that this gives the business owner advantages, though, imposes additional obligations and responsibilities on him.
Make Sure to Pay Attention to the Following Three Aspects
There are obligations to pay taxes to the state
A business owner and an individual entrepreneur are the same people. It means that filing tax returns is not a requirement, as with an entity or LLC. You need to declare your income and expenses and fill out the declaration of an individual;
Business owners who are registered as sole proprietors have the right to enter into contracts on their behalf, unlike an entity. Also, receiving profit from clients, in checks they can indicate their name in the recipient column;
Flexible terms of business management
The advantage difference between individual entrepreneurship and any entity is the ability to combine work and personal assets. Whereas corporations and LLCs must separate personal assets from company assets. It has several positive and negative aspects. For example, if you have financial difficulties, creditors can seize or confiscate your personal property (house, car, etc.). In the case of corporations and LLCs (or any entity), creditors do not have this freedom, as their powers only apply to business assets.
Of course, the structure of doing legal business as a sole proprietor is greatly simplified while in Louisiana. You don’t even have to pay any commission fees provided for the entity or LLC. At the same time, based on the nature and structure of the business activity that you conduct, you will all have to go through a series of entity stages.
The issues of taxation, obtaining licenses, and permits require more detailed consideration. Also, pay attention to the possibility of obtaining and using DBA. These aspects are vital, as their omission can result in unnecessary legal penalties for you.
We have prepared this manual so that you can think over the structure of your business to the smallest detail. Manage it correctly and get more legal profit!