Everything You Need to Know About C Corps in Chicago
Incorporating a C Corporation (C Corp) in Chicago comes with various responsibilities and benefits for businesses3 min read
Incorporating a C Corporation (C Corp) in Chicago comes with various responsibilities and benefits for businesses. It is wise to understand all the aspects associated with the C Corp incorporation process. Therefore, you need to be aware of the frequently asked questions surrounding this business structure to ensure you make the right decision for your company.
In this article, we'll discuss everything you need to know about incorporating a C Corporation in Chicago, from the definition to the pros and cons of the business structure. We will also provide answers to common questions about operating a C Corp in Chicago and suggest ways to access experienced legal counsel about setting up your new business.
What is a C Corporation?
A C Corporation is a business owned by shareholders who enjoy limited liability and who are issued stock. Unlike other corporations, C Corps double tax profit at the corporate and personal level. However, some C Corps in Chicago may qualify for certain benefits, such as lower tax rates. In general, the C Corp structure is common for larger corporations that need to raise capital or for businesses that plan to expand and potentially go public.
What Are the Different Types of C Corporations in Chicago?
Chicago-based C Corps are regulated by state laws and filing requirements. To form a C Corp in the city of Chicago, business owners must incorporate and register the business with the State Department of Business Services. Depending on the nature of the business, there are three different types of C Corps available:
General C Corps: Designed for most businesses, general C Corps allow unlimited shareholders and offer many advantages. The shareholders have limited liability in the case of company lawsuits or debts.
Subchapter S Corps: Subchapter S Corporations (S Corps) receive special tax treatment since the profits are not taxed at the corporate level—only at the personal level. This structure is helpful for small business owners who wish to reduce their taxes and still have limited liability.
Closely Held Corporations: Closely held corporations are generally created by a few owners, and the shares cannot be resold without the company’s permission. As with the other two types of C Corps, shareholders of closely held corporations have limited liability.
What Are the Benefits of Forming a C Corp in Chicago?
When you decide to form a C Corp in Chicago, there are many benefits you and your business can enjoy. First, the C Corp structure offers limited liability protection from public debts and actions brought against the corporation. Secondly, you will be able to keep your business as a separate entity and limit personal financial losses. Thirdly, C Corps may be able to access additional capital through the issuance of stocks.
What Are Some of the Disadvantages of Forming C Corps in Chicago?
Forming a C Corp in Chicago also has its drawbacks. Since corporate profits are taxed twice in C Corps, business owners may be taxed at higher rates and have a larger tax bill. Furthermore, the paperwork, filing fees, and requirements for closing a C Corp when compared with other corporation types are more complex and higher.
What Is the Process of Setting Up a C Corp in Chicago?
The process of setting up a C Corp in Chicago involves several steps. First, decide on the business structure and choose a unique name for your business. Then select a board of directors and shareholders before electing an officer to manage the business. Finally, file the appropriate documents with the State Department of Business Services and register with the IRS.
Where Can I Get Help With Setting Up My C Corp in Chicago?
The best way to get help with setting up a C Corp in Chicago is to reach out to experienced business attorneys. At UpCounsel, we provide access to pre-vetted lawyers experienced in Missouri state law who can help you make an informed decision about settign up your C Corp. Whether you need a single consultation or full-time legal services, our network of experienced business attorneys can provide the help you need.