By Jake Lawson, LLC Formation Strategist
Let me cut straight to the chase: Yes, you can form a general partnership in Louisiana, and it’s relatively simple to do. But after 15 years helping over 1,200 entrepreneurs make business structure decisions, I’m going to tell you something most guides won’t—general partnerships are usually a terrible idea.
Here’s the reality check: Louisiana is one of the few states that actually requires you to file paperwork to form a general partnership. You’re doing the same amount of work as forming an LLC, but getting none of the protection. It’s like buying a motorcycle helmet made of paper—technically it’s headgear, but it won’t save you when things go wrong.
And in Louisiana, with its unique legal system and business environment, the risks of partnerships can be even more complex than in other states.
What Is a Louisiana General Partnership? (The Unvarnished Truth)
A general partnership is a business structure where two or more people agree to run a business together and share profits, losses, and—here’s the kicker—unlimited personal liability for business debts and legal problems.
Unlike most other states, Louisiana didn’t adopt the Uniform Partnership Act. Instead, they have their own set of partnership laws starting at Louisiana Revised Statutes Section 9:3403. This means Louisiana partnerships operate under different rules than partnerships in other states—adding another layer of complexity to an already problematic business structure.
But here’s what really gets me: Louisiana actually requires you to file a Partnership Registration Form with the Secretary of State and pay a $100 filing fee. You’re not avoiding paperwork. You’re not saving money compared to an LLC (which costs the same $100). You’re just choosing to get zero legal protection for the same amount of effort.
The Partnership “Advantages” (And Why They’re Not Really Advantages)
Let me address the two things people always mention as partnership benefits:
“Advantage” 1: Pass-Through Taxation
Reality check: LLCs have the exact same tax treatment.
Multi-member LLCs are taxed identically to general partnerships. Both file Form 1065, both distribute K-1s to owners, both avoid double taxation. The tax “advantage” of partnerships completely disappears when you compare them to LLCs.
“Advantage” 2: Simple Setup
Reality check: Not in Louisiana, and not really anywhere.
In Louisiana, you’re filing the same paperwork as an LLC formation. Same state filing fee. Same need for an EIN. Same need for partnership/operating agreements. Same license requirements. Where exactly is the simplicity?
The “simple setup” myth needs to die. You’re getting none of the benefits with all of the risk.
The Partnership Disadvantages (The Real Story Nobody Wants to Tell You)
Now let’s talk about what actually matters:
Disadvantage 1: Unlimited Personal Liability
This is the deal-breaker, and it’s why I rarely recommend partnerships to anyone.
In a general partnership, every partner is personally liable for all business debts and legal judgments. Not just their share—all of it. If your business partner signs a $50,000 contract and the business can’t pay, creditors can come after your personal house, car, bank accounts, and retirement savings.
Even worse: in Louisiana, with its unique community property laws, this liability can potentially extend to your spouse’s assets too.
Disadvantage 2: Joint and Several Liability
Here’s something most guides bury in fine print: in a partnership, you’re not just liable for your own actions—you’re liable for everything your partners do.
Your partner gets the business sued for $100,000? You’re on the hook. Your partner makes a bad business decision that creates debt? You’re responsible. Your partner does something illegal in the course of business? Congratulations, you’re potentially liable too.
Disadvantage 3: Credibility Issues
General partnerships often look less professional than LLCs to:
- Potential clients and customers
- Banks and lenders
- Vendors and suppliers
- Insurance companies
When you’re trying to land that big contract in New Orleans or Baton Rouge, “Smith & Jones Partnership” sounds less established than “Smith & Jones LLC.”
Disadvantage 4: The Conversion Nightmare
Starting as a partnership thinking you’ll “upgrade later” is expensive and complicated. Converting to an LLC requires:
- Filing new formation documents
- Getting a new EIN
- Updating bank accounts
- Reapplying for licenses
- Redoing contracts and agreements
- Updating insurance policies
- Revising marketing materials
It’s a bureaucratic mess that can take months and cost thousands in fees and lost time.
Louisiana Partnership vs. Multi-Member LLC: The Real Comparison
Let me break this down with actual facts:
| Factor | General Partnership | Multi-Member LLC |
| Louisiana Filing Fee | $100 | $100 |
| Annual Report Fee | $30 | $30 |
| Personal Liability Protection | None | Complete protection |
| Tax Treatment | Form 1065, K-1s | Form 1065, K-1s (identical) |
| Credibility | Lower | Higher |
| Banking Relationships | More complicated | Straightforward |
| Partner Disputes | Complex under LA law | Clear legal framework |
Look at those numbers. Same cost, same paperwork, same taxes. The only difference is that the LLC protects your personal assets while the partnership leaves you completely exposed.
When a General Partnership Might Make Sense (The Very Short List)
After 15 years in this business, I can think of exactly two scenarios where I might consider recommending a general partnership:
Scenario 1: Professional Partnerships with Specific Requirements
Some professions (law, accounting, medicine) have licensing requirements that might necessitate partnership structures. But even then, Limited Liability Partnerships (LLPs) are usually better options.
Scenario 2: Very Temporary Arrangements
If you’re testing a business idea for a few months with a friend and plan to formalize quickly, a partnership might work as a short-term solution. But I’d still probably recommend an LLC.
That’s it. Two scenarios, both with better alternatives. For everyone else, an LLC is the obvious choice.
How to Form a Louisiana General Partnership (If You Absolutely Insist)
Look, I’ve made my feelings clear about general partnerships. But if you’re determined to ignore my advice, here’s how to do it:
Step 1: Choose Your Partners Carefully
Think about this decision seriously. You’re about to become financially liable for these people’s business decisions. Choose people you’d trust with your house keys—because effectively, you are.
Step 2: Create a Partnership Agreement
Draft a comprehensive partnership agreement covering:
- Ownership percentages
- Profit and loss distribution
- Management responsibilities
- Decision-making processes
- Dispute resolution procedures
- Exit strategies and dissolution terms
This isn’t optional. Louisiana courts will default to statutory provisions if you don’t have an agreement, and you probably won’t like those defaults.
Step 3: File the Partnership Registration Statement
Louisiana requires you to file a Partnership Registration Form with the Secretary of State. You can file online through the GeauxBiz system or by mail.
Required information:
- Partnership name
- Business address
- Partners’ names and addresses
- Business purpose
- $100 filing fee
Step 4: Get an EIN from the IRS
All partnerships must obtain an Employer Identification Number for tax filings. Apply online at irs.gov—it’s free and takes about 10 minutes.
Step 5: File for a DBA (If Needed)
If you want to operate under a name different from your registered partnership name, file an Application to Register Trade Name with Louisiana’s Secretary of State. Cost: $75.
Step 6: Research License and Permit Requirements
Check with Louisiana state agencies and local municipalities for industry-specific licenses. Requirements vary by business type and location.
Step 7: Open Business Bank Accounts
Keep business and personal finances separate. Banks will typically require:
- Partnership agreement
- EIN confirmation letter
- State filing confirmation
- Photo ID for all partners
Step 8: Set Up Record Keeping and Accounting
Maintain detailed financial records and prepare for annual tax filings. Consider hiring a CPA familiar with Louisiana partnership law.
The Louisiana LLC Alternative (What I Actually Recommend)
Instead of a general partnership, here’s what I recommend for Louisiana entrepreneurs with business partners:
Form a multi-member LLC.
Why? The benefits are overwhelming:
- Identical tax treatment to partnerships
- Complete personal asset protection for all members
- Professional credibility with clients and vendors
- Simpler banking relationships
- Clear legal framework for disputes and operations
- Same filing cost as partnerships ($100)
You get all the benefits of partnership taxation with none of the liability nightmares.
Louisiana-Specific Considerations for Business Partnerships
Having worked with numerous Louisiana businesses, here are state-specific factors to consider:
Louisiana’s Unique Legal System
Louisiana operates under a civil law system derived from French law, unlike other states’ common law systems. This affects how business relationships and liabilities are interpreted.
Community Property Implications
Louisiana is a community property state. Business liabilities in partnerships could potentially affect marital property in ways that don’t apply in other states.
Oil and Gas Industry Considerations
Louisiana’s significant energy sector often involves partnerships with complex liability issues. LLCs provide better protection for these high-risk ventures.
Hurricane and Natural Disaster Risks
Louisiana businesses face unique natural disaster risks. Partnership structures provide no asset protection when disasters create business liabilities.
Cultural Business Environment
Louisiana has a strong culture of family businesses and close partnerships. While this is positive, it can lead to informal arrangements that create legal problems later.
Common Louisiana Partnership Mistakes That Cost Money
After observing numerous business formations, here are mistakes that consistently cause expensive problems:
Mistake 1: Handshake Agreements
Louisiana’s unique legal system makes written partnership agreements even more critical. Verbal agreements lead to expensive legal disputes.
Mistake 2: Ignoring Community Property Rules
Not understanding how partnership liabilities interact with Louisiana’s community property laws can affect spouses’ assets unexpectedly.
Mistake 3: Inadequate Insurance Coverage
Partnership structures provide no liability protection, making comprehensive insurance coverage absolutely critical—and expensive.
Mistake 4: Poor Record Keeping
Louisiana requires annual reports for partnerships. Poor records lead to compliance problems and potential penalties.
Mistake 5: Not Planning for Disasters
Louisiana businesses must plan for hurricanes and floods. Partnerships provide no asset protection when disasters create business interruption claims.
The Tax Reality: Partnerships vs. LLCs in Louisiana
Let me clear up the biggest misconception about partnership taxation:
Multi-member LLCs are taxed identically to general partnerships in Louisiana.
Both structures:
- File Form 1065 informational returns
- Issue K-1s to owners
- Avoid double taxation
- Allow pass-through of profits and losses
- Qualify for the same business deductions
The tax treatment is absolutely identical. Any guide suggesting partnerships have tax advantages over LLCs is either outdated or incorrect.
Louisiana Partnership Annual Reporting Requirements
Unlike most states, Louisiana requires general partnerships to file annual reports. This adds ongoing compliance costs and eliminates the “simple maintenance” argument for partnerships.
Annual requirements include:
- Filing annual report with Secretary of State
- Paying $30 annual fee
- Updating registered agent information
- Maintaining current partnership information
These are the same requirements as LLCs, further eliminating any simplicity advantage of partnerships.
When to Consider Other Business Structures
While I usually recommend LLCs over partnerships, sometimes other structures make sense:
Limited Liability Partnership (LLP)
For professional services where partnership structure is required, LLPs provide better protection than general partnerships.
Corporation
If you plan to raise investor capital or eventually go public, corporate structures might be better long-term.
Limited Partnership
For certain investment or real estate ventures, limited partnerships can provide tax benefits and investor protection.
But for most Louisiana small businesses with multiple owners? Multi-member LLC is the optimal choice.
My Bottom-Line Recommendation for Louisiana Entrepreneurs
After 15 years helping over 1,200 entrepreneurs, here’s my honest advice for Louisiana business partnerships:
Skip the general partnership. Form a multi-member LLC.
The $100 filing fee is identical. The tax treatment is identical. The paperwork is nearly identical. But the LLC provides complete personal asset protection while the partnership leaves you completely exposed.
Louisiana’s unique legal environment and natural disaster risks make personal asset protection even more critical than in other states. Don’t gamble with your family’s financial security to save zero dollars.
Ready to Make the Smart Choice?
I know I’ve been critical of general partnerships in this guide, but that’s because I’ve seen too many entrepreneurs choose the “traditional” option and regret it later when legal problems arise.
Your business partnership deserves better than the bare minimum protection. Your family deserves better than unnecessary financial risk.
If you’re ready to form a Louisiana multi-member LLC (the choice I actually recommend), check out our complete Louisiana LLC formation guide for step-by-step instructions.
If you want professional help with formation, services like Northwest Registered Agent can handle the paperwork efficiently and affordably.
But whatever you do, don’t let the myth of “partnership simplicity” trick you into choosing inadequate protection. Louisiana’s business environment is too complex and risky for unprotected business structures.
Questions about your specific Louisiana situation? After 15 years of helping entrepreneurs navigate these decisions, I’ve seen most scenarios. Feel free to reach out—I’m always happy to provide straight advice about business structure choices.
Remember: the goal isn’t to start a business as traditionally as possible. The goal is to start a business that protects your future while positioning you for success.
Jake Lawson is an LLC Formation Strategist with over 15 years of experience helping entrepreneurs make smart business structure decisions. He’s guided more than 1,200 businesses through formation processes and has particular expertise in Louisiana’s unique legal environment. His insights have been featured in StartupNation, Global Entrepreneurs Network, and FinTech Weekly.