Forming an LLC in Chicago, Illinois
Forming an LLC in Illinois requires the same procedures as forming a business entity in any other state3 min read
Forming an LLC in Illinois requires the same procedures as forming a business entity in any other state. However, if you are based in Chicago, there are specific steps you should take. This guide will walk you through the main steps for forming an LLC in Illinois as a business owner from the Chicago area.
When it comes to protecting yourself and your business from potential liability, incorporating your business with a Limited Liability Company (LLC) is a great way to do that. It is important to be aware that LLCs are subject to certain restrictions, including specific requirements for filing paperwork and paying taxes. And while researching how to set up an LLC may seem daunting, the process is largely the same regardless of the state in which you do business.
If you are looking to incorporate your business in Illinois, here are the steps you should take to get started.
Choose a Business Name
The first step in forming an LLC in Illinois is to choose a name for your business. The name must be distinguishable from any other business in Illinois and cannot include any language implicitly or explicitly claiming corporate status.
You can begin your search by using the Illinois Secretary of State's corporation database search tool. You should also check the United States Patent and Trademark Office (USPTO) database to make sure the name you are planning on using won't infringe on any existing trademarks.
File the Articles of Organization With the Secretary of State
The next step is to file the Articles of Organization with the Secretary of State. This document will provide basic information about your company, including its name, office address, and member details (if any). The Secretary of State will use this information to create a "Certificate of Good Standing" which your business will need to do business in Illinois. There is a fee for filing the Articles of Organization ($150).
Prepare an Operating Agreement
Once the Articles of Organization are filed and the LLC is officially formed, you should prepare an operating agreement. This document will set forth the rights and responsibilities of each owner and should be tailored to meet the specific needs of your business.
It is important to note that some states, including Illinois, require an operating agreement to be in place before the LLC is officially formed.
Obtain an EIN
Once the operating agreement is in place, you will need to obtain an Employee Identification Number (EIN). An EIN is a unique nine-digit number that serves as a federal income tax identification number and allows the IRS to identify your business for tax purposes. You can apply for an EIN online, free of charge, using the IRS website.
Understand Illinois Tax Requirements
In addition to the federal taxes that apply to all LLCs, you will also need to familiarize yourself with any applicable state taxes. In Illinois, LLCs must pay the state's corporate income tax and state payroll taxes (if any employees are hired).
Register With the State for Other Taxes and Licenses
LLCs in Illinois also need to register with the state for any applicable taxes and licenses. Depending on the nature of your business, this could include registering for sales and use taxes, employer taxes, professional services taxes, and more.
Hire a Tax Professional
Finally, you should consider hiring a tax or legal professional to help you comply with all applicable regulations. A competent professional will be able to assist you with understanding your tax and business requirements and help ensure that your business is properly organized and compliant. Moreover, a tax professional will be able to provide advice and guidance on how to maximize your business's profitability, minimize tax liabilities, and ensure ongoing compliance with all applicable laws and regulations.
For experienced business owners looking to form an LLC in Illinois, the process is relatively simple. By familiarizing yourself with the steps outlined above, you can ensure that your LLC is established correctly and that you remain in compliance with all applicable regulations.