C-Corporations: A Guide to Understanding Local Regulations in Chicago
The Popularity of C Corps in the US: Legal Recognition and Tax Savings2 min read
C corps have become one of the most popular forms of business entities in the United States in part due to their legal recognition and more importantly, the potential tax savings. However, understanding and navigating local regulations in Chicago can be a challenge for any business. This article seeks to provide a comprehensive overview of the local laws in Chicago that entrepreneurs need to be aware of when forming a C Corp.
C Corps are separate legal entities distinct from their owners. This means that if the corporation is sued, the owners and managers are generally not personally liable for the company’s debts and obligations. From a tax perspective, the C Corp is seen as an entirely independent entity and can be taxed separately from its owners. In most cases, the C Corp pays its own taxes on profits, while individual shareholders are responsible for paying taxes on the dividends they receive from the corporation.
In order to form a C Corp in the state of Illinois, entrepreneurs must first submit their Articles of Incorporation to the Secretary of State. This document is a formal statement the describes the C Corp, its purpose, its registered office, and the names of its officers, directors, and shareholders. In addition to the Articles of Incorporation, entrepreneurs must also complete the C corp Questionnaire and submit the C Corp Business Registration. Both of these documents can be obtained from the Secretary of State’s website.
In addition to state regulations, businesses must also abide by local ordinances and laws. The laws in Chicago which are most relevant to businesses are the Employer Shared Responsibility payments, the Minimum Wage law, Sick Leave law, and Right to Work law. These laws vary depending on the size of the business, so it’s important to consult with an experienced lawyer to ensure that your company is in compliance with all applicable laws.
Once the business is registered, entrepreneurs must obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN is a nine-digit number used to identify a business for tax and other business purposes. The EIN is also required to hire employees, open a bank account, and apply for business loans.
It’s important to stress that the laws and regulations surrounding C Corps can be very complex. An experienced attorney is usually the best option for any business looking to understand and comply with local laws. A good lawyer will be familiar with the local laws in Chicago and will be able to advise the business accordingly. UpCounsel’s network of experienced lawyers can help businesses of all sizes navigate the C Corp registration process, ensuring that the business complies with all applicable laws and regulations.
The rules and regulations surrounding C Corps can be quite confusing and it’s essential that all entrepreneurs seeking to form a C Corp understand the local laws in Chicago. From obtaining an EIN to understanding employer shared responsibility payments, entrepreneurs should seek out an experienced lawyer who can help ensure compliance with all applicable state and local laws. With the help of UpCounsel’s network of experienced lawyers, business owners in the Chicago area can ensure a smoother C Corp registration process.