USA – LOUISIANA Law and Practice Contributed by: Jeffrey P. Good, Susan M. Tyler and B. Trevor Wilson, Jones Walker LLP
LLCs offer pass-through taxation (avoiding double taxation of corporate structures), limited liability protection for all members, management flexibility (member-managed or manager-man - aged) and minimal corporate formalities. They can be structured as disregarded entities, part - nerships, or corporations for federal tax purpos - es, providing significant planning opportunities. Limited partnerships offer similar tax benefits but require at least one general partner. S corpo - rations provide pass-through taxation but have significant restrictions on ownership. C corpora - tions face double taxation but may be advanta - geous for foreign investors seeking to minimise FIRPTA exposure. 5.3 REITs REITs are available in Louisiana. REITs must sat - isfy specific requirements under federal tax law. Several Louisiana-focused REITs have emerged in recent years, particularly in the healthcare, multifamily and industrial sectors. 5.4 Minimum Capital Requirement There is no minimum capital requirement under Louisiana law for entities used to invest in real estate. However, adequate capitalisation is advisable from both a business and legal per - spective to maintain the limited liability protec - tion offered by corporate structures. 5.5 Applicable Governance Requirements There are no special governance requirements for real estate investment entities; the general rules of governance for the various types of enti - ties apply. However, certain best practices have evolved, particularly for entities holding signifi - cant real estate assets.
For LLCs, operating agreements typically address management structure, voting rights, capital calls, distribution schedules and transfer restrictions. For corporations, standard corpo - rate governance applies, including board over - sight, officer responsibilities and shareholder rights. The Corporate Transparency Act, which became fully effective on 1 January 2024, imposes ben - eficial ownership information reporting require - ments on most entities, including those used for real estate investment. However, enforcement remains unknown at this time pending possible additional rule making. 5.6 Annual Entity Maintenance and Accounting Compliance Annual maintenance costs for real estate invest - ment entities in Louisiana typically include nomi - nal state filing fees, any fees to a commercial registered agent, accounting and tax preparation fees, entity level tax filings and local business licence fees. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time Louisiana law recognises several types of grants that allow a person to occupy and use real estate. The right of exclusive use of real estate may be granted by a lease of improved or unimproved real estate for a term not exceeding 99 years. A grant of servitude establishes the (usually non- exclusive) right of an estate or person to use real estate for specific purposes, such as passage or access. Servitudes may be predial or personal.
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