Start-Up Business Owners: How to Get Started on Setting Up Your LLC in Chicago
to promote your product or service Starting a Business: Exciting Milestones and Beyond3 min read
Starting a business comes with a range of exciting new milestones, from the creative process of crafting the business’s mission and vision to designing a logo and catchy website. But the road to launching the business also comes with plenty of legal formalities, including creating a Limited Liability Company (LLC). An LLC offers business owners the agility and freedoms of a sole proprietorship while still providing the liability protection of a corporation.
The process for forming an LLC can be overwhelming, and business owners should make sure to adequately research the legal requirements and formalities of forming and maintaining an LLC in their home state. Those located in Chicago should enlist the help of a knowledgeable business and corporate attorney to not only ensure the legality of your LLC formation, but also to ensure compliance with local regulations.
With that said, here’s a primer on getting started on creating an LLC in Chicago:
Choose Your Business Name
The business name you choose should reflect the core values and goals of your business. Not only will this affect how you’ll be remembered by your customers (so try to pick a name that sticks!), but also the next steps in registering the LLC. Your business name must be distinguishable from any existing LLCs or corporations within the same state. This name will be reflected in the articles of organization for your LLC.
If you’re setting up an LLC in Chicago, the Illinois Secretary of State has a list of requirements for the name of your LLC. In short:
• Your LLC name must include an appropriate “entity indicator”, such as “LLC” or “L.L.C.”
• The name cannot include any restricted words, like “insurance”, “bank” or “attorney”
• The name must also not be misleading
To make sure you’re in the clear name-association-wise, it’s best to do a quick search of existing LLC business names in your state before committing to your LLC’s name.
File Your Articles of Organization
Once you’ve settled on an LLC name, the next step is to file your articles of organization with the Secretary of State. This is the official document that legally establishes the LLC. Your articles of organization should include each state-mandated elements, including:
• Company name
• Business purpose
• LLC duration
• Owner information
• Manager information
• Mailing address
• Financial close date
When filing articles of organization with the Illinois Secretary of State, you’ll need to pay a filing fee. Typically, the fee for a Chicago LLC is around $150.
Set Up Your Operating Agreement
Your LLC’s Operating Agreement establishes key and often complex internal processes and regulations, including rules about decision-making, voting rights, and management structure. While this document isn’t required by law for your LLC to exist, having a well-crafted operating agreement will protect the rights of all members within the LLC.
To set up your LLC’s operating agreement, it’s best practice to consult with an experienced business attorney, who’ll be familiar with local regulations and protocols. An attorney will adequately account for the individual needs of your business, so you can be confident the document fully reflects your LLC’s desires.
Create Your Registered Agent
In most states, all LLCs must appoint a Registered Agent. This individual—or business—assumes responsibility for accepting legal documents (such as eligibility lawsuits or tax forms) on behalf of your LLC. Though a third-party service can serve as your registered agent, typically, this job falls to the LLC owner themselves.
Secure Your LLC’s EIN
Your LLC is now legally established! The next step is to secure your Employer Identification Number (EIN) from the IRS. Your EIN is relatively straightforward to obtain, and depending on your business structure, you can apply for an EIN with the IRS using the online form or by mail.
Final Thoughts
Establishing an LLC is no easy task, and it is advised that you consult an experienced corporate attorney for guidance throughout the entire process. A trusted attorney will help you understand the standard protocols and regulations you’ll need to follow according to your state and local laws, so you can set up your LLC safely and securely—and move on to the other exciting elements of launching your business.
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