Starting up a business in Chicago is no doubt an impressive and potentially rewarding endeavor for both local entrepreneurs and business owners based around the world. Taking those first steps to getting your business incorporated, whether as a limited liability company (LLC), partnership, sole proprietorship, or other form, can be an intimidating additional challenge. Fortunately, with the help of experienced business lawyers and tax advisors, the process doesn’t have to be overly daunting. To ensure a smooth and upright incorporation of your business in Chicago, it's important to know the legal and tax implications of each business formation option, what documents are needed for filing, and when and how to go about filing them.

The incorporation process may vary from state to state depending on local regulations and filing requirements, making it essential that entrepreneurs make it a priority to hire experienced, local legal counsel to guide them through the process. With the right guidance, incorporating your business in Chicago can be relatively straightforward and quick, providing the foundation on which to build your business with legal protection and guidance.

LLC or Other Business Network

The first step for any Chicago entrepreneur looking to incorporate a business is determining which business classification best matches their needs. The most commonly known form of business incorporation is a Limited Liability Company (LLC), which provides personal liability protection, pass-through taxation, and flexibility for how to structure the internal affairs of the business. Other business structures are also available. General and limited partnerships, corporations, sole proprietorships, and cooperative corporations, among other business formations, may provide the necessary legal protection for certain businesses.

The decision should not be taken lightly, as one structure may offer more favorable legal benefits than the other. LLCs, for example, can be modified to include more than one individual owner and may provide for greater protection from debtors and creditors. Corporations, on the other hand, offer their top-level managers and shareholders limited liability protection, and usually offer clearer regulations for how to manage the company’s fiduciary duties. It’s important to consider the pros and cons of each of these business structures and to be mindful of any tax implications associated with your particular business entity.

Business Name and Registration

Once an individual has determined the right formation for their business, the next step is to obtain the necessary registration documents. Businesses will need to register with the state and county governments, as well as, obtain any applicable business licenses depending on the type of business they are starting. A Corporation or LLC should submit a Certificate of Incorporation with the State of Illinois in order to start the process of legal incorporation.

Names are a highly important part of the process and before registering a business, individuals should think of a unique business name that isn’t already being used for another business in the state. To do this, a name search should be conducted to check the availability of the desired name. It should also be noted that business names registered with the state have to be distinguishable from any other names already registered with the state, but should be easily identifiable and remembered by customers.

Hire Experienced Business Lawyers in Chicago

The local business regulations in Chicago may be very different from other parts of the country, which means that hiring experienced counsel to help you incorporate a business in Chicago can be a crucial step in the process. Having access to knowledgeable lawyers with an understanding of the local laws can make a significant difference when working on complicated business matters. Working with an experienced law firm in Chicago that understands the implications of local regulations is a must.

To start the process, an individual should locate and contact an experienced business lawyer who is familiar with the local regulations of Chicago. Legal counsel should be apps about the individual's goal of setting up their own business. Working with experienced attorneys can help individuals avoid common pitfalls like not forming the company properly from a legal or taxation standpoint, which could lead to costly consequences further down the line.

Keeping Accurate Records

It's critical that entrepreneurs maintain thorough records of all company business decisions, such as the minutes from meetings and the actions taken by directors, officers, shareholders and managers. Additionally, individuals should keep copies of important documents and agreements regarding business formation, contracts with employees, vendors, and customers, and other compliance and regulatory documents necessary to ensuring a smooth business operation. Having a organized recordkeeping system in place is essential to staying compliant with state laws and avoiding legal disagreements.

Registration and Reporting Requirements

Entrepreneurs should be mindful of all applicable local, county, and state registration and reporting requirements. In Illinois, businesses are required to register with the Secretary of State in order to receive a Certificate of Good Standing. This certificate gives information on the company's legal status and whether or not the company is compliant with the state’s filing regulations. In addition to the State of Illinois, businesses are also required to register with county governments, depending on their operational activities. It's a good idea to discuss all registration requirements with the attorney prior to filing the paperwork.

Business must also keep up with any applicable quarterly, semiannual, or annual filings, such as, but not limited to the filing of annual reports with the Secretary of State and the submission of employee identification numbers (EINs) to the Internal Revenue Service.

Seek Professional Support Before Incorporating

Forming a business in Chicago can be a — daunting task, but with the help of experienced business lawyers familiar with local regulations, the process doesn’t have to be overly complicated. You’ll want to do plenty of research and ensure that you’ve chosen the right structure for your business, as each formation option provides different benefits and drawbacks. Once you decide on the proper business formation and the desired business name, the lawyers at your disposal can help with the registration documents and ensure that your business is well positioned from a legal and tax perspective.




Business Formation