Starting a Consulting Business in Illinois
Starting a consulting business in Illinois? The steps for this process are determined by the type of business format you want to establish.3 min read
3. LLCs and Corporations
4. Business Planning
5. Name Your Business
6. Assumed Business Name Filing
7. Forming a Limited Liability Business
Starting a consulting business in Illinois? The steps for this process are determined by the type of business format you want to establish. The types are sole proprietorships, partnerships, LLCs, and corporations.
With a sole proprietorship, you're the only owner of your business. This is a common way for people to go into business. Millions of Americans operate in this manner. With sole proprietorships, there's no need to file paperwork with the government. No approval is needed to run your business as an Illinois sole proprietor.
All that's required is that when you file your tax return using IRS form 1040, you file a separate sheet called the schedule C. Schedule C reports the profits and losses from the business. If your business earns a profit, you then have to pay federal and state income tax on it.
A partnership is formed when you go into business with someone else. When you form a partnership, both parties share the responsibility for running the business. You also share any profits the business earns and any losses it incurs. The details of how the work, responsibility, profits, and losses are divided need to be carefully listed and recorded in your partnership agreement.
LLCs and Corporations
Many business owners decide to set up their businesses as limited liability companies (LLCs). They may also decide to incorporate their business. Neither of these is required, but they both have unique advantages. These business structures provide protection for your personal assets, so liabilities or debts that come from the business can't cause you to lose your personal possessions. Even if there's only one shareholder, you can still form an LLC or corporation. Your title would then be "shareholder" or "LLC member."
Build a great business by starting with a plan that:
- Zeroes in on your idea.
- Smooths out a solid executive summary.
- Support your efforts in preparing a budget forecast.
- Delve's into the best market for your idea.
Take your time creating this business plan. This improves your chances to succeed in your business. Know, however, that there are many variables you'll have to deal with as you get your business started. Create a plan that's flexible.
Name Your Business
If you choose to operate your business as a sole proprietor in Illinois, you may use your own name or use a trade name or an assumed business name. As a best practice, you should pick a name that's not too close to the name of any other registered business. This will protect you from issues with common and federal laws regarding trademark protections.
To check the availability of your desired business name, search online using the government databases of the Illinois Secretary of State, the U.S. Patent and Trademark Office, and your local county clerk's office.
Assumed Business Name Filing
If you're a sole proprietor and you've opted to use a name other than your legal name, the state of Illinois says you must file a certificate of the assumed business name. This isn't optional in Illinois. To begin the filing process, the assumed business name certificate form is available from the county clerk's office. You go to the county where your business will be located to get it. The cost to file this form is $5.
After you file the form, you must publish your assumed business name in the local paper. It has to stay published for three weeks in a row. After you do this, the publisher will give you a publisher's certificate. You need to file that certificate with the county clerk to complete the process of applying for your assumed name. The contact information for your county clerk's office can be obtained from the Illinois Department of Health.
Forming a Limited Liability Business
Forming an LLC protects your personal assets, such as your house and car. It also guarantees that no other company can use your brand name. Many entrepreneurs choose LLCs as a preferred business format because it gives them the advantages of a corporation while sparing them from the disadvantages, such as having to have a board of directors, having to bring on corporate officers, and double taxation.
If you need help with starting a consulting business in Illinois, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.