Creating an LLC in Chicago: A Guide for New Businesses
Starting a Business in Chicago? Create an LLC3 min read
If you’re thinking about starting a business in the Greater Chicago area, there’s no doubt you’ve heard that it’s important to create an LLC. The acronym stands for Limited Liability Company—a legal entity, formed by filing a document with the state, that protects you from being personally liable for debts or harm that your business might incur. Thus, making it an essential step for new businesses owners.
Creating an LLC is no small task; however, becoming knowledgeable about it, seeking counsel, and understanding all of the steps involved will give you a leg-up in starting your new business. Among all of the other decisions you’ll be making in the formative stages of launching your venture, forming an LLC will likely be one of the most important. So, without further ado, let’s dive into how to create an LLC in Chicago.
Choose a Name for Your LLC
The first step in creating your LLC is selecting an appropriate name. In Illinois, the name you chose must contain certain terminology, such as “Limited Liability Company” or one of its abbreviations (e.g., LLC or L.L.C.). Your LLC's name also can’t be already taken by another company in the state (for a complete list of rules and guidelines, follow this link).
File the Articles of Organization
After choosing a name for your LLC, you’ll then have to file the Articles of Organization with the Illinois Secretary of State. This filing will legally create your LLC. The form requires you to provide basic contact information and initial filing fees. Depending on the type of LLC you’ve chosen to create, the articles might also require you to provide additional information, such as the name and address of the company’s registered agent.
Create an Operating Agreement
While an operating agreement isn’t required by law, forming an LLC in Chicago requires that all owners—known as members—establish an LLC operating agreement. This document sets forth the rules and the regulations that the members have agreed to abide by.
Get an EIN
Next, you’ll need to get a federal Employer Identification Number (EIN) for the LLC from the IRS. This is a nine-digit number that will identify your business for tax purposes.
Obtain Local Business Licenses
Any type of business in the Chicagoland area needs certain licenses and permits from the local government. It’s important to take the time to research what kind of permits will be necessary for your business, as requirements vary based on the type of industry and the city or municipality in which you’ll be operating.
Open a Business Bank Account
Many businesses require their LLC members to open a separate business bank account. This helps to keep the company’s finances organized and separate from personal finances. When opening a bank account as an LLC, you’ll likely need to provide the bank with copies of your Articles of Organization, your operating agreement, and your business EIN.
Secure Legal Counsel for Your Business
The sheer number of steps involved in creating an LLC can be daunting, and hiring experienced legal counsel is a great way to get a handle on some of the most complicated issues involved. North Siders looking for counsel that understand local regulations should check out UpCounsel. This online platform provides businesses of all sizes access to experienced lawyers who specialize in the complexities of Chicago’s local business regulations. UpCounsel’s network of attorneys offers high-quality legal services on demand, with experienced business attorneys boasting an average of 14 years of experience.
Though the process of creating an LLC in Chicago can be somewhat overwhelming, taking the time to learn the requirements and understanding which steps need to be taken will give your business the best opportunity to succeed. From selecting and registering your name to obtaining licenses and hiring experienced legal counsel, forming an LLC doesn’t have to be a confusing or overwhelming task. With a little bit of knowledge and the right resources, you can be well on your way to launching your business.