Incorporation: Understanding Local Regulation for Businesses in Chicago
When it comes to incorporating your business, understanding local regulation is essential for success, especially for businesses located in Chicago3 min read
When it comes to incorporating your business, understanding local regulation is essential for success, especially for businesses located in Chicago. Incorporating provides your business several benefits, such as its own separate identity, limited liability to protect its directors, officers, and owners from being personally liable for the company’s debt, and the ability to secure more funding. In addition, large corporations often incorporate to create limited liability subsidiaries, to turn private businesses into public corporations, and to restructure their finances. However, understanding the local regulations when it comes to incorporating a business in Chicago is paramount to protecting your business and making sure you comply with local laws.
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To fully understand the process of incorporating, it helps to know the sections and steps involved in the process. Incorporation is the act of forming a corporation to separate the business entity from its owners. The process itself is typically the same from state to state. The only difference is the amount of time it takes to filing the paperwork, the requirements to comply with local regulations, and the fee to pay to acquire the approval permit.
If you’re looking to incorporate your business in Chicago, the first step is to register with the Illinois Secretary of State and the State Business Services department. This is done by filing articles of incorporation with the Secretary of State’s office, which outlines all of the required information about the company, such as the name, address, and purpose of the business. The articles of incorporation will also be used to create the issuing of the stock, which grants certain rights to shareholders in the company.
After the articles of incorporation are filed, the next step is to create the company’s bylaws. These are rules and regulations governing the company's operations and management, and should be drafted by a qualified legal committee. Bylaws outline the company's strategy, how the company will be managed and who will be involved in its management, and a number of other components. Furthermore, it would be wise to review the local regulations on taxation and labor related issues that might apply to your company, and create internal procedures to comply with these regulations.
For businesses in the city of Chicago, there are additional requirements that must be met. Businesses must register with Chicago-specific agencies, such as the Department of Business Affairs and Consumer Protection (BACP) and the Department of Buildings. For convenience, Chicago has created the BACP Zoning page that can be used to help you determine which zoning laws your business should follow. Additionally, business owners must apply for all applicable permits and licenses, and create an Employers Identification Number (EIN) for tax purposes.
Finally, it is worth noting that incorporation can also offer additional protection for the company and its owners. For large companies, creating a Limited Liability Corporation (LLC) to serve as a subsidiary of a larger corporation can help protect the parent from creditors in the event of bankruptcy or other financial difficulty. Additionally, there are certain tax advantages to creating an LLC that can help your business save money in the long run.
Incorporating your business is a smart move, and understanding the local regulations in Chicago is essential for protecting your business and complying with the law. Fortunately, the experienced attorneys at UpCounsel provide cost-effective legal services, in addition to the guidance needed to incorporate your business and comply with local laws. Whether you need a one-time consultation or an entire freelance Legal Department, UpCounsel is here to help your business get started.
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