For people in Louisiana who are starting a business, there are four main types of business formation to choose from. Each of the different forms has its advantages and disadvantages; some of them are free or inexpensive to establish while others provide benefits with regard to taxation or the liability of the owner. It is possible in most situations to begin with a business in one form and transition later into another form. The four main types of business are sole proprietorships, partnerships, limited liability companies and corporations.
Louisiana business owners might wonder whether they are vulnerable to audits or regulatory procedures. Any business could be subject to these, but there are steps a company can take to reduce the likelihood of such a thing happening. Companies can also protect themselves if they do face audits or regulatory procedures.
Louisiana residents who are considering which one of the various types of legal business entities to use for their enterprise may want to consider creating a limited liability company, or LLC. An LLC is a business structure that is permitted by state law.