In Louisiana, businesses are allowed to incorporate, thereby becoming their own legal entities. After incorporation, buying and selling property, assenting to contracts and exercising legal rights are considered acts of the business itself and not its owners. A business seeking to incorporate in Louisiana must file with the Secretary of State in accordance with established guidelines.
Benefits of Incorporation in Louisiana
Certain benefits inure to a business in Louisiana that has incorporated over one that has not. First, a corporation's liabilities can never go beyond the amount invested in the business by the owners. With unincorporated businesses, personal property of owners can be liquidated in order to satisfy the liabilities of the business. Also, creditors in the Gretna area typically prefer to deal with corporations, since a loan is an investment more easily evaluated when the credit-worthiness of various owners is not an issue. Lastly, the ownership stake in a corporation can be apportioned into uniform slices, known as "shares" of stock. This makes it possible to sell ownership investments in more manageable slices.
Costs of Incorporation
Incorporation comes at a price. First, Louisiana may charge a filing fee to process applications for incorporation. Also, the corporation will pay taxes as its own entity. The individual incomes of the owners are still taxed also, and this can mean the same income is taxed twice, known as double taxation. With proper planning and assistance from a local Gretna lawyer, you can avoid this disadvantage.