By now, you probably know what a Limited Liability Company (LLC) is and why it’s a viable business structure for entrepreneurs and small business owners.
Here are the 8 steps to forming an LLC in Louisiana:
1. Choose a name for your LLC and making sure it’s available for use
2. Designate a Registered Agent for your LLC
3. File your Articles of Organization with the Louisiana Secretary of State
4. Draft your LLC’s Operating Agreement
5. Get a Federal Tax ID Number (EIN) for your LLC
6. File your LLC’s Annual Report
7. Obtain business licenses and permits
8. File and pay taxes
While this is basically the process for creating and maintaining an LLC, each state will have its own “quirks” (unique or confusing steps specific only to it). Some states have minor quirks, and some have major quirks.
Which brings us to Louisiana; the state with a lot of quirks! Although we’ve explained all of them in our step-by-step Louisiana LLC Guide, we wanted to point out issues specific to Louisiana’s online filing process, known as geauxBIZ (pronounced “go biz”).
We won’t beat around the bush here: the process of filing your LLC Articles of Organization with Louisiana’s geauxBIZ (the state’s one-stop online filing system) really stinks and can be quite confusing for a lot of people.
Now, not everything we have to say about geauxBIZ is negative, but let’s start with the cons.
First Reason: Bugs and Glitches
To be fair to the guys who made geauxBIZ, the online filing system was launched in early 2016.
While we didn’t expect it to be perfect, we also didn’t expect it to be so bad.
Not receiving your verification email right away when you register was a pain. You also can’t use the back button in your web browser. And the “percentage tracker” (which tells you how far along the application you are) was really off and didn’t make any sense. These were just some of the glitches we saw while using geauxBiz.
Again, geauxBIZ is still a work in progress, and we sincerely hope they can improve it in the near future.
Second Reason: Complicated Processing
Another reason why using geauxBIZ can make you pull your hair out is because of their complicated processing.
What’s so complicated? geauxBIZ asks for lots of extra information in the hopes to make it a “one stop shop” and get you registered with the Department of Revenue and the Workforce Commission (if you have employees). Although this sounds helpful, the questions and extra hoops you have to jump through can be very confusing.
While it’s not unusual for states to ask for extra information when you file your Articles of Organization, Louisiana’s geauxBIZ seems bent on squeezing out the last bit of information from you.
For one, the system asks you to give your Social Security Number (SSN) and an NAICS Code (a unique code to identify a company’s industry). It also doesn’t help that geauxBIZ asks you confusing tax-specific questions, which most people are not 100% sure how to answer.
Third Reason: Federal Tax ID Number Requirement is “Backwards”
This is probably the most confusing part of geauxBIZ.
Why do we say this? It’s because you usually have to form your LLC BEFORE getting a Federal Tax ID Number (EIN) from the IRS. But instead, geauxBIZ requires your EIN before your LLC can be filed. Again, this is completely backwards.
If your LLC is rejected by the state for any reason, it means you now have an EIN attached to the wrong LLC. You then have to cancel your EIN with the IRS and go through the LLC online filing process all over again.
So instead of fixing this issue, the state has a very weird “work-around” which requires you to file a name reservation, then get your EIN, then “convert” your name reservation to a an online registration. I know this might not sound too bad to read, but the steps, the information, and the instructions aren’t clearly stated in geauxBIZ. The filer has to first recognize the issue, call the state, and then be told the proper steps.
Because of all the issues with geauxBIZ’s’ online LLC filing, we actually recommend to our readers to file their LLC by mail in our Louisiana LLC Guide.
Positive Things about geauxBIZ
Although we “bashed” geauxBIZ above, it’s not entirely evil.
Merging 3 different agencies (Secretary of State, Department of Revenue, and Workforce Commission) into one smooth online filing process is quite an undertaking. So what they have so far is pretty impressive considering all that is going on the behind the scenes.
Once your LLC is formed (if you file by mail, you can “connect” it to a geauxBIZ account later), it’s really easy to manage your Annual Report and other filings from the state.
Another positive thing about geauxBIZ is it’s a step in the “paperless direction”. Although this can be challenging for a lot of people who are not very comfortable with computers, it will make filings with the state faster and easier as time goes on and the system improves.
The purpose of geauxBIZ is moving in the right direction. There’s still a lot of bugs and quirky things (most importantly, that “backwards” EIN step), but in time, we think geauxBIZ can become a really nice system.
If you’re comfortable with computers and you don’t mind spending more time jumping through some hoops (in order to have everything digital), then we recommend using geauxBIZ.
If you’re not comfortable with computers or the internet in general, we recommend creating a geauxBIZ account, but don’t form your LLC online. Instead, form your LLC with a paper filing, and then later you can “connect” it to your account. This will make the the filing process a lot easier, and help you avoid the unnecessary name reservation and “backwards” EIN step.
Have you used geauxBIZ yet? If so, what are your thoughts? Leave them in the comment section below.