When starting a business in Chicago, the most common decisions business owners have to make is whether they should form an LLC or Inc. The exact type of entity your company should adopt requires careful consideration and thought. An experienced legal advisor can help you make an informed decision about which is best suited for your business. This article will provide an overview of LLC vs Inc formation for businesses in Chicago, with answers to frequently asked questions.

The Basics of LLCs and Corporations

Before exploring the differences between LLCs and Incs, let’s take a brief look at the basics of each.

A limited liability company (LLC) is the most popular legal entity structure for small businesses in the United States. LLCs provide business owners with certain advantages, such as liability protection, pass-through taxation, and relative flexibility in the management of the business. LLCs are governed by state law and the internal operating and management protocols of the business.

On the other hand, Incs (also referred to as corporations) provide more restrictive structures than LLCs. Business owners who form a corporation are required to adhere to strict rules regarding corporate governance, compliance, and the management of the company. Corporations may also offer tax advantages and potential for growth.

LLC vs Inc: Frequently Asked Questions

What is the Difference Between an LLC and an Inc?

The primary differences between an LLC and an Inc are found in the structure, management protocols, and financial reporting of each entity. LLCs merely need to present business a tax return to the IRS, while corporations are required to abide by the general corporate regulations and may need to adhere to certain requirements for corporate governance, risk management, and other areas. Additionally, LLCs are typically taxed using pass-through taxation, meaning that any profits or losses are reported on the owners’ individual tax returns. On the other hand, corporations are subject to double taxation, meaning that they are taxed on corporate profits and then again when distributions are made to stockholders.

Which One is Best for My Business in Chicago?

The best entity structure for your business will depend on the size and goals of your business, as well as your tax objectives. It is advised that you speak with a qualified legal advisor in order to make an informed decision. An attorney who focuses on business law in Chicago will be able to provide you with tailored advice regarding the LLC vs Inc decision.

Which One Operates Better in Chicago?

Each entity structure has its own particular advantages and disadvantages, and the best one for your business will depend on your specific goals and objectives. To make an informed decision, it is advised to consult with a qualified business attorney who is familiar with the local laws and regulations regarding LLCs and Incs in Chicago.

Are There Other Options for Businesses in Chicago?

Depending on your business’s size and goals, there may be other entity structure options which may be more suitable for your business. For example, a business may consider partnerships, limited partnerships, Series LLCs, or sole proprietorships. A qualified business attorney can provide you with tailored advice and guidance on which is best for your business based on the goals and objectives.

Getting Legal Counsel on LLCs and Incs in Chicago

Business owners seeking legal advice and guidance on whether their business should form an LLC or Inc in Chicago should consider UpCounsel. UpCounsel is a platform which connects business owners with experienced business lawyers who specialize in guiding businesses through their legal matters. At UpCounsel, you can find qualified attorneys with an average of 14 years of experience who can provide you with the legal counsel needed to make an informed decision.