Louisiana Entity Types Guide
⚜️ LOUISIANA
Complete guide to Louisiana’s unique business structures – from civil law partnerships in commendam to L3Cs, benefit corporations, and professional entities
Civil Law Tradition
Partnership in Commendam
LLC Formation Fee
$100
Corporation Fee
$105
Social Enterprise Option
L3C & Benefit Corp
Louisiana Entity Types – The Civil Law Difference
🎯 Louisiana’s Unique Legal Heritage
Louisiana’s civil law tradition (derived from French and Spanish law) means our business entities have unique terminology and rules not found in other states. While we’ve adopted modern LLC and corporate statutes similar to other jurisdictions, our partnership law remains rooted in the Civil Code, giving rise to structures like the partnership in commendam (Louisiana’s limited partnership).
The Louisiana Entity Universe
Unincorporated
- Sole Proprietorship
- General Partnership
- Partnership in Commendam (LP)
- Registered LLP
Limited Liability Companies
- Standard LLC
- Low-Profit LLC (L3C)
- Professional LLC (PLLC)
Corporations
- Business Corporation (BCA)
- Benefit Corporation
- Nonprofit Corporation
- Professional Corporations (PC)
Professional Entities
- Professional Law Corporation
- Medical/Dental Corporation
- Accounting/CPA Corporation
- Chiropractic Corporation
- Professional LLCs (some fields)
Special Purpose
- Educational Cooperatives
- Industrial Development Corps
- Economic Development Corps
Governing Law
| Entity Type | Primary Statute |
|---|---|
| General Partnership | Civil Code, Title XI – Partnerships (Art. 2801 et seq.) |
| Partnership in Commendam (LP) | Civil Code, Art. 2837 et seq. |
| Registered LLP | Title 9 R.S. – Registered Limited Liability Partnerships (R.S. 9:3432 et seq.) |
| Limited Liability Companies | Title 12, Chapter 22 (R.S. 12:1301 et seq.) |
| Business Corporations | Title 12, Chapter 1 – Business Corporation Act (R.S. 12:1-101 – 1-1705) |
| Benefit Corporations | R.S. 12:1801 et seq. |
| Nonprofit Corporations | R.S. 12:201 et seq. |
| Professional Corporations | Title 12 (separate chapters: law R.S. 12:801–816, medical 12:901–915, dental 12:981–995, etc.) |
Key Louisiana-Specific Features
✅ What Makes Louisiana Different:
- Civil Code Partnerships: Civil Code Art. 2801 defines general partnership as a juridical person, distinct from its partners – terminology and concepts rooted in civilian tradition
- Partnership in Commendam: Louisiana’s version of limited partnership, with general partners and partners in commendam (limited partners)
- L3C (Low-Profit LLC): Louisiana is one of the few states authorizing low-profit LLCs for social enterprises
- MBCA-Based Corporate Law: Modern Business Corporation Act (effective Jan 1, 2015) substantially tracks Model Business Corporation Act
- Benefit Corporation Option: Dedicated benefit corporation statute (R.S. 12:1801–1824) for mission-driven businesses
- Professional Entity Flexibility: Multiple professional entity chapters (law, medical, dental, accounting, chiropractic) with PC and PLLC options
Quick Comparison: Louisiana Entity Types
This table provides a high-level comparison of Louisiana’s business structures. Scroll horizontally on mobile devices.
| Factor | Sole Proprietorship | General Partnership | Partnership in Commendam (LP) | LLP | LLC | L3C | Corporation | Benefit Corp | Nonprofit | PC/PLLC |
|---|---|---|---|---|---|---|---|---|---|---|
| Liability Shield | ❌ None | ❌ Joint & several | ⚠️ GPs: none; LPs: limited | ✅ Yes (except own acts) | ✅ Yes | ✅ Yes | ✅ Yes | ✅ Yes | ✅ Yes | ✅ Yes (except own malpractice) |
| Tax Default | Individual (Schedule C) | Pass-through (K-1) | Pass-through (K-1) | Pass-through (K-1) | Pass-through (or elect C-corp) | Pass-through (or elect C-corp) | C-corp (or elect S-corp) | C-corp (or elect S-corp) | Tax-exempt (501(c) if qualified) | C-corp or S-corp (or pass-through if PLLC) |
| Owner Restrictions | 1 person only | 2+ persons | 1+ GP, 1+ LP | 2+ partners | 1+ members | 1+ members | 1+ shareholders | 1+ shareholders | N/A (members/directors) | Licensed professionals only |
| Filing Required? | No (optional trade name) | No (optional registration) | ✅ Yes (written contract filed with SoS) | ✅ Yes (application with SoS) | ✅ Yes (Articles of Organization + Initial Report) | ✅ Yes (Articles + Initial Report) | ✅ Yes (Articles of Incorporation) | ✅ Yes (Articles of Incorporation) | ✅ Yes (Articles of Incorporation) | ✅ Yes (Articles per profession) |
| Formation Fee | $0 (SoS) | $0 (if unregistered) | Varies (contract filing) | $125 | $100 | $100 | $105 | $105 | Varies | $105+ |
| Annual Maintenance | None | None (if unregistered) | Varies | $125 annual renewal | $30 annual report | $30 annual report | $30 annual report | $30 annual report + benefit report | $10 annual report | $30 annual report |
| Best Use Cases | Solo consultants, freelancers, minimal risk | Small partnerships, low-formality needs | Real estate, oil/gas, passive investors + active GP | Law firms, accounting firms, professional groups | Most small/mid-sized businesses, real estate | Social enterprises, impact investing, PRIs | VC-backed startups, going public, equity financing | Mission-driven businesses balancing profit & impact | Charities, foundations, advocacy groups | Licensed professionals (lawyers, doctors, CPAs, etc.) |
Unincorporated Entities – Partnerships Under Louisiana Civil Law
Sole Proprietorship
A sole proprietorship is not a separate juridical person under Louisiana law; it’s simply an individual doing business under their own name or a trade name.
Key Features
- No filing required with Louisiana SoS to “create” the entity
- Optional trade name registration (parish clerk of court)
- Full personal liability for all business debts
- Tax treatment: Schedule C on personal return
Best For
- Solo consultants and freelancers
- Low-risk service businesses
- Testing a business idea before formalizing
- Situations where liability exposure is minimal
⚠️ No Liability Protection: Sole proprietors are personally liable for all business debts, torts, and obligations. If your business has any liability risk (employees, physical premises, professional services), consider an LLC or corporation.
General Partnership (Civil Code Art. 2801)
Civil Code Art. 2801: A partnership is a juridical person, distinct from its partners, created by a contract between two or more persons to combine their efforts or resources in determined proportions and to collaborate at mutual risk for their common profit or commercial benefit.
🎓 Civil Law Terminology: Louisiana’s partnership definition differs from common law states. The partnership is a juridical person (a legal entity separate from its partners), but partners still have joint and several liability for partnership obligations.
Formation & Registration
- Created by contract: Partnership arises when parties agree to combine efforts/resources for mutual benefit
- Writing recommended: Though oral partnerships are possible, writing is strongly recommended (and required if immovables/real estate are contributed)
- Optional registration: Under Title 9 “Uniform Partnership Law,” partnerships can register by filing the partnership contract with Louisiana SoS, which gives constructive notice and can affect liability/authority issues
Governance & Liability
🚨 Joint & Several Liability: Each partner is a mandatary (agent) of the partnership for matters in the ordinary course of business. Partners are jointly and severally liable for partnership debts and obligations. One partner’s actions can bind the entire partnership and expose all partners to personal liability.
Profit & Loss Allocation
Default rule: Equal split among partners unless the contract specifies otherwise (Civil Code Art. 2804).
Tax Treatment
Federal tax: Pass-through entity (Form 1065); partners report their distributive share on personal returns (Schedule K-1).
✅ When to Use General Partnership
- Small professional services firms (if LLP/LLC not preferred)
- Family businesses with high trust between partners
- Simple collaborations where formality is minimal
- When all partners are actively involved in management
❌ When to Avoid General Partnership
- Any significant liability risk (use LLC or corporation)
- When you want passive investors (use LP or LLC)
- Professional practices where LLP provides better protection
- Situations requiring equity financing (VCs prefer corps)
Partnership in Commendam (Louisiana Limited Partnership)
🎓 Civil Law Concept: Louisiana’s partnership in commendam is the civilian equivalent of a limited partnership. The term “commendam” comes from medieval Italian commenda partnerships, where passive investors (“commendators”) contributed capital while active partners managed the business.
Civil Code Art. 2837: A partnership in commendam is formed by a contract by which one or more persons obligate themselves as general partners and one or more other persons obligate themselves solely as contributors of capital (partners in commendam).
Structure
- General partners: Manage the partnership and have unlimited personal liability (same as general partnership)
- Partners in commendam (limited partners): Contribute capital but do not participate in management; liability limited to their agreed contribution
Formation Requirements (Critical for Limited Liability)
🚨 Filing Required for Limited Liability: To obtain limited liability for partners in commendam, you MUST:
- Execute written contract specifying the partnership structure, capital contributions, and roles
- File the contract with Louisiana Secretary of State
- Use compliant name: Name must clearly identify it as a limited partnership or partnership in commendam and must not imply that a limited partner is a general partner
Until filed, partners in commendam are liable as general partners.
Limited Partner Control Restrictions
Limited partners cannot participate in control of the business without risking general partner liability. However, Louisiana law provides an extensive “safe harbor” list of actions that do not constitute control:
- Being a contractor, agent, or employee of the partnership
- Consulting with and advising a general partner on the business
- Acting as surety or guarantor for the partnership on specific obligations
- Voting on specified major decisions (dissolution, sale of assets, amendment of contract, admission/removal of partners, etc.)
Liability Cap & Clawback
A partner in commendam’s liability is capped at their agreed capital contribution, but if they receive distributions that render the partnership insolvent, those distributions may be clawed back to satisfy partnership creditors.
Tax Treatment
Federal tax: Pass-through (Form 1065). General partners and limited partners report their distributive share on personal returns.
✅ When to Use Partnership in Commendam
- Real estate investments: Passive investors fund deals managed by active GP
- Oil & gas ventures: Working interests (GP) + royalty/limited interests
- Private equity/VC funds: Fund managers (GP) + investors (LPs)
- Family investment structures: Senior generation as GP, junior as LPs
❌ When to Avoid Partnership in Commendam
- All partners want limited liability (use LLC instead)
- Frequent changes in ownership (LLC is more flexible)
- Professional practices (LLP or PLLC typically better)
- When simplicity/low formality is a priority
Registered Limited Liability Partnership (LLP)
A general partnership can become a Registered Limited Liability Partnership (LLP) under R.S. 9:3432 et seq. by filing an application with Louisiana SoS.
Formation
- File application with SoS stating: partnership name, principal office address, number of partners, nature of business
- Name requirement: Must include “registered limited liability partnership,” “R.L.L.P.,” or “L.L.P.” as the last words/letters
- Filing fee: $125 (initial registration)
- Annual renewal: $125/year; registration is for one year and must be renewed annually
Liability Protection
✅ LLP Liability Shield: Partners in an LLP are NOT personally liable for partnership obligations arising from errors, omissions, negligence, incompetence, or malfeasance of another partner or employee. Each partner remains liable for their own acts/omissions.
Governance & Tax
An LLP remains a partnership under Civil Code Art. 2801; all partnership provisions still apply (management, profit-sharing, fiduciary duties, etc.).
Tax treatment: Pass-through (Form 1065); same as general partnership.
✅ When to Use LLP
- Law firms: Lawyers want protection from other partners’ malpractice
- Accounting firms: CPAs shielded from co-partner negligence
- Architecture/engineering firms: Professional liability isolation
- Consulting practices: Multi-partner professional services
❌ When to Avoid LLP
- Solo practitioners (no need for multi-partner shield; use LLC or PC)
- Businesses with significant non-professional liability (real estate, manufacturing)
- When annual renewal burden is unattractive (LLC has annual report but no “renewal” concept)
⚠️ Annual Renewal Required: LLP registration is only valid for one year at a time. Failure to file annual renewal ($125) results in loss of LLP status and reversion to general partnership liability.
Limited Liability Companies – LLC, L3C & PLLC
Louisiana LLC (R.S. 12:1301 et seq.)
Definition (R.S. 12:1302): “Limited liability company” means an unincorporated association having one or more members organized under this Chapter. An LLC is not an incorporated association or corporation.
Formation
Louisiana LLCs are formed by filing Articles of Organization and Initial Report with the Louisiana Secretary of State (geauxBIZ portal).
| Requirement | Details |
|---|---|
| Filing | Articles of Organization + Initial Report |
| State fee | $100 (plus small portal convenience fee if filing online) |
| Name requirement | Must contain “limited liability company,” “L.L.C.,” or “L.C.” (except L3Cs) |
| Registered agent | Required; must have Louisiana street address |
| Initial Report | Functions as first annual report; filed simultaneously with Articles |
Annual Maintenance
- Annual report: Required each year after formation
- Fee: $30 for for-profit LLCs (latest SoS fee schedule)
- Due date: Anniversary of formation
Governance
Louisiana LLCs can be:
- Member-managed: All members participate in management (default if not specified)
- Manager-managed: One or more designated managers run the business; members are passive investors
Governance is defined in the Operating Agreement (not filed with state; kept internally).
Liability Shield (R.S. 12:1320)
✅ Limited Liability: Members and managers are NOT personally liable for LLC debts, obligations, or liabilities solely by reason of being a member or manager. Personal liability arises only from:
- Personal guarantees or torts committed by the individual
- Veil-piercing (alter ego, fraud, undercapitalization – Louisiana Supreme Court has outlined factors)
Tax Treatment
| LLC Type | Default Federal Tax | Can Elect |
|---|---|---|
| Single-member LLC | Disregarded entity (Schedule C on owner’s return) | C-corp or S-corp (Form 8832 or 2553) |
| Multi-member LLC | Partnership (Form 1065, K-1s to members) | C-corp or S-corp |
✅ When to Choose LLC
- Real estate holding: LLCs are standard for rental properties
- Small/mid-sized businesses: Simpler governance than corporation
- Pass-through tax desired: Avoid double taxation
- Flexible profit allocation: Can allocate profits disproportionately to ownership %
- Operating businesses: Retail, service, consulting, etc.
❌ When to Avoid LLC
- Venture capital funding: VCs strongly prefer C-corps
- Going public: Must convert to corporation for IPO
- Employee stock options: Stock options work better in corps
- Certain professions: Some licensing boards require PC/PLLC or restrict LLC use
Low-Profit Limited Liability Company (L3C)
Louisiana authorizes low-profit LLCs (L3Cs) – a specialized LLC structure for social enterprises.
🌱 L3C Concept: An L3C is organized primarily for a charitable or social purpose, with profit as a subordinate objective. The L3C was designed to facilitate program-related investments (PRIs) by foundations, though federal tax law has not given L3Cs special PRI treatment.
Formation
- File Articles of Organization same as regular LLC
- Name requirement: Must include “low-profit limited liability company,” “L3C,” or “l3c”
- Purpose statement: Articles must state the L3C’s charitable/social purpose
- Filing fee: $100 (same as regular LLC)
Tax Treatment
⚠️ No Special Federal Tax Status: L3Cs are taxed identically to regular LLCs under federal law (pass-through by default; may elect C-corp). The IRS has not granted L3Cs any special tax treatment or automatic PRI qualification.
Governance & Compliance
L3Cs operate under the same Louisiana LLC law (Title 12, Ch. 22) as regular LLCs. The L3C designation is primarily a signaling mechanism to impact investors and foundations.
✅ When to Use L3C
- Social enterprises: Mission-driven businesses seeking impact investment
- Foundation PRIs: Want to attract foundation program-related investments
- Hybrid models: Balancing charitable mission with earned revenue
- Impact branding: L3C name signals social purpose to stakeholders
❌ When to Avoid L3C
- Pure charitable work: Use 501(c)(3) nonprofit instead
- Profit maximization: Use regular LLC or corporation
- VC funding: VCs typically won’t invest in L3Cs (mission constraints)
- No PRI need: If not seeking foundation PRIs, regular LLC is simpler
Professional Limited Liability Companies (PLLC)
Louisiana allows professional LLCs for certain licensed professions. For example, R.S. 12:982.1 defines professional LLCs for dentistry and ties them into professional regulation.
Key Points
- Profession-specific statutes: Check Title 12 and licensing board rules for your profession (law, medicine, dentistry, accounting, etc.)
- Ownership restrictions: Typically, only licensed professionals in the same field may be members/managers
- Licensing board oversight: Must comply with board rules on entity structure, ownership, control, and professional liability insurance
- No malpractice shield: PLLC does not shield individual professionals from personal liability for their own malpractice
PC vs PLLC: Some professions (law, medicine, dentistry, accounting) can choose between professional corporation (PC) or professional LLC (PLLC). PLLCs offer LLC flexibility with pass-through tax default; PCs offer corporate structure with S-corp or C-corp tax. Consult your licensing board and tax advisor.
Louisiana Corporations – BCA, Benefit Corps & Nonprofits
Business Corporations Under the BCA (R.S. 12:1-101 – 1-1705)
Louisiana adopted a modern Business Corporation Act (BCA) effective January 1, 2015, which substantially tracks the Model Business Corporation Act (MBCA).
Formation
| Requirement | Details |
|---|---|
| Filing | Articles of Incorporation |
| State fee | ≈$105 (online filing via geauxBIZ) |
| Name requirement | Must contain “corporation,” “incorporated,” “company,” “limited,” or abbreviation (Corp., Inc., Co., Ltd.) |
| Registered agent | Required; must have Louisiana street address |
| Shares | Must specify authorized shares in Articles |
Annual Maintenance
- Annual report: Required
- Fee: $30 for for-profit corporations
Governance (MBCA-Based)
Louisiana’s BCA provides a comprehensive corporate governance framework:
- Shareholders (Part 7): Elect directors, approve major transactions, exercise voting/inspection/appraisal rights
- Board of Directors (Part 8): Manage business and affairs; may delegate to officers and committees
- Officers (Part 8A): CEO, CFO, Secretary, etc.; appointed by board
- Unanimous governance agreements: Shareholders may enter agreements that modify corporate governance (e.g., eliminate board, allocate voting rights disproportionately) – gives LLC-like flexibility for small corps
Shareholder Rights & Remedies
✅ Strong MBCA Protections:
- Dissenter/appraisal rights (R.S. 12:1-1301 et seq.): Shareholders dissenting from major transactions (mergers, asset sales, etc.) can demand fair value for their shares
- Oppression remedies: Oppressed shareholders may seek judicial dissolution, buyout, or other relief
- Derivative actions: Shareholders can sue on behalf of corporation for breach of fiduciary duty by directors/officers
Tax Treatment
| Tax Election | How It Works |
|---|---|
| C-Corporation (default) | Entity-level tax on corporate income (federal 21% + Louisiana corporate tax); dividends taxed again to shareholders (double taxation) |
| S-Corporation (election) | Pass-through tax (no entity-level tax; income flows to shareholders on K-1); must meet IRS eligibility (≤100 shareholders, all U.S. individuals/estates/trusts, one class of stock) |
✅ When to Choose Corporation
- Venture capital funding: VCs require C-corps (preferred stock, option pools, etc.)
- Going public (IPO): Must be a corporation
- Employee stock options: ISOs and stock option plans work better in corps
- Retained earnings: C-corp structure allows accumulating earnings without pass-through tax to owners
- International operations: Corporations have well-established cross-border tax and legal frameworks
❌ When to Avoid Corporation
- Pass-through tax desired: LLC is simpler for pass-through (S-corp has eligibility restrictions)
- Flexible profit allocation: LLCs can allocate profits disproportionately; corps cannot
- Minimal formality preference: Corporations require board meetings, bylaws, minutes, resolutions
- Real estate holding: LLCs are standard for rental properties (avoid double taxation on appreciation)
Benefit Corporations (R.S. 12:1801–1824)
Louisiana has a dedicated Benefit Corporation statute for businesses that want to balance profit with public benefit.
🌱 Benefit Corporation Definition: A “benefit corporation” is a business corporation that has elected to be subject to the Benefit Corporation Chapter and has not terminated that status. A benefit corporation must have a corporate purpose of creating general public benefit (material positive impact on society and environment), in addition to any specific purposes under the BCA.
Formation & Election
- At formation: Include benefit corporation election in Articles of Incorporation
- Post-formation: Amend Articles to elect benefit corporation status (requires shareholder approval)
- Filing fee: Same as regular corporation (≈$105)
Key Requirements
1. General Public Benefit Purpose
Corporate purpose must include creating general public benefit – a material positive impact on society and the environment.
May also identify one or more specific public benefits (e.g., environmental protection, human health, economic opportunity).
2. Stakeholder Consideration Duty
Directors must consider the effects of decisions on:
- Shareholders
- Employees
- Customers
- Community and society
- Environment
- Long-term interests of corporation
3. Benefit Report
Must prepare an annual benefit report assessing the corporation’s overall social and environmental performance against a third-party standard (e.g., B Lab’s B Impact Assessment).
Report must be delivered to shareholders and may be made publicly available.
4. Benefit Enforcement Proceeding
Shareholders have the right to bring a “benefit enforcement proceeding” to enforce the benefit corporation’s purpose and duties.
This gives shareholders a remedy if directors ignore the social mission.
Tax Treatment
⚠️ No Special Tax Treatment: Benefit corporations are taxed identically to regular corporations (C-corp or S-corp election). The benefit corporation election does not confer nonprofit or tax-exempt status.
✅ When to Choose Benefit Corporation
- Mission-driven businesses: Want legal protection for stakeholder-oriented decisions
- Impact investors: Seeking capital from investors who require benefit corporation or B Corp certification
- Branding/marketing: Benefit corporation status signals commitment to social/environmental mission
- Long-term mission lock: Benefit status survives ownership changes (e.g., acquisition)
❌ When to Avoid Benefit Corporation
- Profit maximization focus: Benefit duties may conflict with short-term profit goals
- Traditional VC funding: Some VCs hesitate due to stakeholder duties
- Benefit report burden: Annual reporting against third-party standard is time-consuming
- Charitable mission only: Use 501(c)(3) nonprofit instead
Nonprofit Corporations (R.S. 12:201 et seq.)
Louisiana nonprofits are governed by the Nonprofit Corporation Law (R.S. 12:201 et seq.).
Formation
- Articles of Incorporation meeting R.S. 12:203 requirements (name, purposes, registered office, directors, members or lack thereof)
- Purpose statement: Articles must state the nonprofit’s purposes (charitable, educational, religious, scientific, etc.)
- Filing fee: Varies (check current SoS fee schedule)
Annual Maintenance
- Annual report: Required under R.S. 12:205.1
- Fee: $10 (nonprofit annual report fee)
Federal Tax-Exempt Status
State vs Federal: Forming a Louisiana nonprofit corporation does not automatically grant federal tax-exempt status. To obtain 501(c)(3) or other tax-exempt status:
- File IRS Form 1023 (501(c)(3) application) or Form 1024 (other exemptions)
- Meet IRS requirements for charitable/exempt purposes, governance, and operations
- Obtain IRS determination letter confirming exemption
Governance
Nonprofits are typically governed by a board of directors (not shareholders). Some nonprofits have voting members who elect the board (similar to shareholder structure).
✅ When to Choose Nonprofit Corporation
- Charitable mission: Exclusively charitable, educational, religious, or scientific purpose
- Tax-deductible donations: Want donors to get tax deductions (requires 501(c)(3))
- Grant funding: Most foundation grants require 501(c)(3) status
- No profit distribution: No owners/shareholders; all revenue reinvested in mission
❌ When to Avoid Nonprofit Corporation
- Owner profits: Nonprofits cannot distribute profits to members/directors
- Hybrid earned revenue + mission: Consider L3C or benefit corporation instead
- Political campaigns: 501(c)(3)s cannot engage in political campaign activity (use 501(c)(4) or for-profit)
- Equity investors: Cannot issue stock/equity; use for-profit structure
Professional Entities – PCs & PLLCs
Louisiana law authorizes professional corporations (PCs) and, for some professions, professional limited liability companies (PLLCs) for licensed professionals.
⚠️ Licensing Board Oversight: Each profession’s regulatory board (Louisiana State Bar, Louisiana State Board of Medical Examiners, Board of Dentistry, State Board of CPAs, etc.) has specific rules on entity structure, ownership, control, and professional liability insurance. Always consult your licensing board before forming a professional entity.
Professional Law Corporations (R.S. 12:801–816)
Purpose & Ownership
- Purpose: Organized solely for the practice of law
- Shareholders: Only “qualified persons” (licensed Louisiana attorneys, or entities composed of licensed attorneys) may be shareholders
- Directors/Officers: Must be qualified persons
Formation
- File Articles of Incorporation with Louisiana SoS (same as regular business corporation, but designate as professional law corporation)
- Fee: ≈$105
- Name: Must comply with Louisiana State Bar rules (typically includes attorney/partner names or “A Professional Law Corporation”)
Liability
🚨 No Malpractice Shield: A professional law corporation does not shield individual attorneys from personal liability for their own malpractice or negligence. The PC limits liability for other attorneys’ malpractice and for general business debts, but each attorney remains personally liable for their own professional acts.
Professional Medical Corporations (R.S. 12:901–915)
Purpose & Ownership
- Purpose: Practice of medicine and podiatry (R.S. 12:904)
- Shareholders: Only licensed physicians (MD, DO) or podiatrists; must be licensed in Louisiana or meet reciprocity requirements
- Directors/Officers: Must be licensed physicians/podiatrists
Formation & Compliance
- File Articles of Incorporation with Louisiana SoS
- Comply with Louisiana State Board of Medical Examiners rules on professional corporations
- Maintain professional liability insurance as required by board
Professional Dental Corporations & PLLCs (R.S. 12:981–995)
PC vs PLLC Option
R.S. 12:982.1 explicitly authorizes professional limited liability companies for dentistry, in addition to professional corporations.
- Professional dental corporation: Corporate structure; C-corp or S-corp tax
- Professional dental LLC: LLC structure; pass-through tax default
Ownership & Governance
- Shareholders/Members: Only licensed dentists
- Board/Managers: Must be licensed dentists
- Comply with Louisiana State Board of Dentistry rules
Professional Accounting Corporations (R.S. 12:1011–1025)
Purpose & Ownership
- Purpose: Practice of public accountancy
- Shareholders: Only licensed CPAs or public accountants
- Directors/Officers: Must be licensed CPAs or public accountants
Formation & Compliance
- File Articles with Louisiana SoS
- Comply with Louisiana State Board of CPAs rules on firm structure, ownership, and professional liability insurance
Professional Chiropractic Corporations (R.S. 12:1051–1060)
Purpose & Ownership
- Purpose: Practice of chiropractic
- Shareholders: Only licensed chiropractors
- Directors/Officers: Must be licensed chiropractors
Professional Entity Comparison Matrix
| Profession | PC Available? | PLLC Available? | Statute | Licensing Board |
|---|---|---|---|---|
| Law | ✅ Yes | ⚠️ Check Bar rules | R.S. 12:801–816 | Louisiana State Bar |
| Medicine / Podiatry | ✅ Yes | ⚠️ Check Board rules | R.S. 12:901–915 | LA State Board of Medical Examiners |
| Dentistry | ✅ Yes | ✅ Yes (R.S. 12:982.1) | R.S. 12:981–995 | LA State Board of Dentistry |
| Accounting / CPA | ✅ Yes | ⚠️ Check Board rules | R.S. 12:1011–1025 | LA State Board of CPAs |
| Chiropractic | ✅ Yes | ⚠️ Check Board rules | R.S. 12:1051–1060 | LA Board of Chiropractic Examiners |
| Other professions | Consult Title 12 and licensing board for your specific profession | |||
PC vs PLLC vs LLP – Which to Choose?
| Factor | Professional Corporation (PC) | Professional LLC (PLLC) | LLP |
|---|---|---|---|
| Structure | Corporation (BCA) | LLC (Ch. 22) | Partnership (Civil Code + Title 9) |
| Tax default | C-corp (can elect S-corp) | Pass-through (can elect C-corp/S-corp) | Pass-through (partnership) |
| Governance formality | High (board, bylaws, minutes, etc.) | Medium (operating agreement) | Low (partnership agreement) |
| Annual maintenance | $30 annual report | $30 annual report | $125 annual renewal |
| Liability shield | Yes (except own malpractice) | Yes (except own malpractice) | Yes (except own malpractice) |
| Best for | Traditional professional firms; S-corp tax planning | Modern professional firms; pass-through simplicity | Law/accounting firms; partnership culture |
Special Purpose Entities
Educational Cooperatives (Title 17)
Louisiana law authorizes educational cooperatives under Title 17 (Education) for schools and educational institutions.
Purpose
- Cooperative organization of educational institutions
- Shared resources, services, and purchasing power
- Promotion of educational programs and collaboration
Powers (R.S. 17:2804)
Educational cooperatives have the power to:
- Sue and be sued
- Own, lease, and dispose of property
- Enter contracts
- Employ staff and agents
- Exercise other powers necessary to carry out educational purposes
Conversion (R.S. 17:2817)
Louisiana law allows conversion of educational corporations into cooperatives under specified procedures.
Best for: School districts, charter schools, colleges, and educational consortiums seeking cooperative governance and resource sharing.
Industrial or Economic Development Corporations (R.S. 12:951–972)
Louisiana authorizes industrial or economic development corporations to promote industrial and economic development within the state.
Purpose
- Promote, encourage, and assist economic development
- Acquire, develop, and lease industrial sites and facilities
- Provide financing and technical assistance to businesses
- Collaborate with local governments and economic development agencies
Formation & Governance
- File Articles of Incorporation with Louisiana SoS
- Governed by board of directors
- May be nonprofit or for-profit depending on structure and purposes
Powers
Development corporations have tailored powers to:
- Acquire and develop real property for industrial use
- Issue bonds and other securities to finance development projects
- Enter public-private partnerships with local governments
- Provide loans, grants, and technical assistance to businesses
Best for: Local governments, economic development agencies, and public-private partnerships focused on job creation, infrastructure development, and regional economic growth.
When to Use Special Purpose Entities
✅ Educational Cooperatives
- School district consortiums
- Charter school collaboratives
- College/university joint programs
- Regional educational service agencies
✅ Development Corporations
- Industrial park development
- Downtown revitalization projects
- Business incubators and accelerators
- Workforce development initiatives
Federal Compliance – CTA/BOI & Real Estate AML
Corporate Transparency Act (CTA) & Beneficial Ownership Information (BOI)
✅ Major Update (March 26, 2025): FinCEN issued an interim final rule that removed BOI reporting requirements for all U.S. companies and U.S. persons under the Corporate Transparency Act.
- Domestic Louisiana entities (LLCs, corporations, partnerships formed in Louisiana): NO BOI reporting required as of March 26, 2025
- This is a massive simplification for Louisiana businesses – you no longer need to file beneficial ownership reports with FinCEN
Foreign Reporting Companies (Still Subject to BOI)
⚠️ Foreign entities registered in Louisiana: Entities formed under foreign law (e.g., Canadian corporation, Cayman Islands LLC) that register to do business in Louisiana are still BOI reporting companies unless they qualify for a statutory exemption.
BOI Deadlines for Foreign Reporting Companies
| Registration Timing | BOI Filing Deadline |
|---|---|
| Already registered before March 26, 2025 | April 25, 2025 |
| Register on or after March 26, 2025 | 30 days after registration becomes effective |
CTA Exemptions (Foreign Entities)
Foreign entities may qualify for exemptions if they meet criteria such as:
- Large operating company: >20 full-time U.S. employees, >$5M gross receipts/sales, physical U.S. office
- SEC-registered issuer
- Regulated entities: Banks, credit unions, broker-dealers, investment companies, etc.
- See FinCEN’s full exemption list at fincen.gov
CTA/BOI Summary by Entity Type
| Entity Type | BOI Reporting Required? |
|---|---|
| Louisiana LLC (domestic) | ❌ No (exempt as of March 26, 2025) |
| Louisiana Corporation (domestic) | ❌ No (exempt as of March 26, 2025) |
| Louisiana General Partnership (domestic) | ❌ No (exempt as of March 26, 2025) |
| Louisiana Partnership in Commendam (domestic) | ❌ No (exempt as of March 26, 2025) |
| Louisiana LLP (domestic) | ❌ No (exempt as of March 26, 2025) |
| Foreign entity registered to do business in Louisiana | ✅ Yes (unless exempt) |
FinCEN Real Estate Anti-Money Laundering (AML) Rule
Separate from CTA/BOI, FinCEN has issued a Residential Real Estate Rule targeting non-financed (“all-cash”) transfers of residential real estate to legal entities or trusts.
Key Points:
- Effective date: Final rule issued Aug 29, 2024; reporting requirement effective December 1, 2025
- Trigger: Applies when a legal entity or trust purchases residential real estate with cash or private financing (no institutional mortgage)
- Reporting person: Title/settlement agent or attorney handling the closing must file a Real Estate Report with FinCEN, disclosing beneficial ownership information
- Exempt transactions: Direct purchases by individuals (not entities) are outside the rule
⚠️ For Louisiana LLCs buying residential real estate: If your Louisiana LLC purchases residential property for cash (or private financing with no institutional mortgage), the closing agent will be required to file a Real Estate Report with FinCEN starting December 1, 2025. This is separate from BOI reporting under the CTA (which no longer applies to domestic LLCs).
Louisiana Annual Reports & State Compliance
Regardless of federal CTA/BOI status, all Louisiana entities must maintain state compliance:
| Entity Type | Annual Report Required? | Fee | Due Date |
|---|---|---|---|
| LLC (for-profit) | ✅ Yes | $30 | Anniversary of formation |
| L3C | ✅ Yes | $30 | Anniversary of formation |
| Corporation (for-profit) | ✅ Yes | $30 | Anniversary of formation |
| Benefit Corporation | ✅ Yes + Benefit Report | $30 | Anniversary of formation |
| Nonprofit Corporation | ✅ Yes | $10 | Anniversary of formation |
| LLP | ✅ Annual Renewal | $125 | Anniversary of registration |
| General Partnership (unregistered) | ❌ No | N/A | N/A |
| Partnership in Commendam | ⚠️ Check SoS requirements | Varies | Varies |
🚨 Failure to File Annual Reports: Louisiana SoS will administratively dissolve or revoke LLCs, corporations, and LLPs that fail to file annual reports or renewals. Reinstatement requires back fees, penalties, and compliance filings. Keep your annual reports current to maintain good standing.
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