Registering an LLC in Chicago: Things to Consider
Deciding How to Register a Business when Starting a New One in Chicago2 min read
When it comes to starting a new business in Chicago, one of the most important decisions you will have to make is how to register that business. One popular option among new business owners is to register as a limited liability company (LLC). While the LLC formation process is relatively straightforward, there are still a few key things you need to know and consider in order to ensure that your business is properly registered. This article will provide an overview of what the LLC formation process entails as well as the potential advantages and disadvantages of forming an LLC in Chicago.
Formation Requirements
The first step of creating an LLC is to file the Articles of Organization with the Secretary of State. These articles must include the name of the LLC, the address of the registered agent, and the purpose of the business. Once this document is submitted, a registration fee must be paid. After the articles are filed, an Operating Agreement should be prepared. This document outlines the rights and obligations of the members and outlines the rules of the business.
Once the LLC is established, it will need to register with the Internal Revenue Service (IRS) in order to receive its Employer Identification Number (EIN). An EIN is required for the LLC to file taxes and open a business banking account. Lastly, the LLC will need to register with the Illinois Department of Revenue for sales tax collection purposes.
Advantages of LLC
An LLC offers its members several advantages over other business structures. For one, the limited liability that LLCs provide offers protection to the members from the debts and obligations of the company. The LLC structure also allows for greater flexibility in management, as members can determine their own voting rules and how profits are distributed. Lastly, an LLC does not have to pay corporate taxes, allowing its members to claim their respective profits or losses on their personal tax returns.
Potential Risks
While LLCs offer a number of advantages, there are also some potential risks and drawbacks that should be considered. One of the primary risks associated with LLCs is that they are not afforded the same protection as corporations. As such, members can be held personally liable for debts or obligations that the company is unable to pay. Additionally, LLCs are subject to more regulations and oversight by the state than other business entities.
Getting Professional Guidance
When it comes to forming an LLC in Chicago, it is always a good idea to seek out professional legal guidance. Doing so can ensure that your LLC is in compliance with all applicable laws and regulations. UpCounsel's network of experienced attorneys can provide the advice and counsel you need to help you navigate the process. Whether you just need one-time advice or an entire freelance legal department, UpCounsel can provide you with access to high quality attorneys on demand. Our online attorneys profile client reviews and ratings for your review, and business attorneys have an average of 14 years experience.
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