How to Start an LLC in Chicago: What You Need to Know
Starting a business in Chicago can be an exciting and rewarding endeavor3 min read
Starting a business in Chicago can be an exciting and rewarding endeavor. As the third-largest city in the United States, there are plenty of opportunities to launch a business and make your mark. But the process of setting up an LLC (Limited Liability Corporation) can be intimidating and arduous. It's important to understand the legal aspects of forming a business so that you can make sure you're set up for success from the very beginning.
If you're ready to get started, you'll need to understand the intricacies of the LLC process in Chicago. This article will cover what you need to know to launch your business, including the types of entities you'll need to consider, how to choose a business name, registering your LLC, understanding state and local laws, and considering the services of an experienced attorney.
Types of Chicago Business Entities
When setting up an LLC in Chicago, you'll have to decide between two types of entities: an LLC and a C Corp. An LLC is a hybrid structure that blends the best features of corporations and partnerships. It offers the limited liability protection of a corporation while providing tax advantages and the flexibility to make ownership and organizational decisions that suit your business's needs. On the other hand, a C Corp is a fully incorporated entity, meaning it has all the formalities of a corporation and is subject to a range of regulatory requirements.
Choosing a Business Name
Once you have decided which type of entity is best for your business, you'll need to choose a business name. It's important to select a name that won't conflict with other businesses or organizations in the area, and that will represent your business in the best possible way. Your name should be distinctive and easily recognizable, and it should convey the purpose of your business to customers.
You can check the availability of your chosen name by searching the Illinois Secretary of State website. If your name is available, you can reserve it for up to 120 days by submitting a Name Reservation Request. You'll also need to make sure the name isn't trademarked.
Registering Your LLC
Once you have chosen a name, you'll need to register your LLC with the Illinois Secretary of State. The process of registration involves filling out and submitting the necessary paperwork, including the Articles of Organization and the Certificate of Formation. The articles of organization detail the basic information about your business such as its name, purpose, and designated owner(s). The certificate of formation declares the corporate existence of the LLC. The filing fee for these documents depends on the type of LLC you're registering, but is typically between $150 and $500.
State and Local Regulations
Another important aspect of setting up an LLC in Chicago is understanding and complying with state and local laws. For example, Illinois requires all LLCs to keep records of their financial activities and to pay sales taxes on products or services that are offered within the state. You will also need to stay up to date on any changes to the law that could affect your business.
Consulting an Attorney
Forming an LLC in Chicago can be complicated, and you may want to seek the counsel of a knowledgeable attorney. An experienced lawyer can provide valuable guidance on matters such as choosing a business name, selecting the most beneficial entity type, filing documents, and ensuring compliance with relevant laws.
For those looking for legal support in the Chicago area, UpCounsel is a great resource. UpCounsel provides access to a network of experienced business lawyers who can help you navigate the legal aspects of starting and running an LLC. Whether you need every-once advice or an entire team of freelancers, UpCounsel has you covered.