The Top 5 Things to Consider When Incorporating in Chicago
Whether you’re starting an LLC, corporation, or a nonprofit, incorporating your business is a big decision2 min read
Whether you’re starting an LLC, corporation, or a nonprofit, incorporating your business is a big decision. Not only does it require you to think through the legal and financial aspects of running a business, it also involves understanding the local regulations and laws in your city or state. For entrepreneurs in Chicago, navigating local business regulations can be especially complex, and they need to be aware of the common pitfalls. Here are the five most important elements to consider when incorporating a business in Chicago.
1. Choose the best legal structure for your business
The first step to incorporating a business in Chicago is determining the legal structure of the company. Every business will face its own unique set of risks and rewards, and it’s important to choose a structure that works best for you. In Illinois, the most common legal structures are C-Corps, S-Corps, LLCs, and nonprofits. Each has its own set of advantages and disadvantages, but the most important thing to consider is the tax implications of the various structures, especially in Chicago.
2. Draft the Articles of Incorporation document
The Articles of Incorporation is a document that outlines the legal structure of the business, its basic corporate purpose, and the initial directors of the corporation. It also sets forth the rights of the shareholders and other important information. It’s important to be as detailed as possible to ensure that the Articles of Incorporation will stand up to any legal challenges that may arise.
3. Register with the state and local authorities
Once you’ve settled on the legal structure of your business and drafted the Articles of Incorporation, you’ll need to register with the state. In Illinois, this involves filing the Articles of Incorporation with the Secretary of State. It’s also important to note that many local authorities may require additional registrations and filing fees.
4. Register with the IRS
In addition to registering with the local and state authorities, you’ll need to register with the Internal Revenue Service (IRS). Depending on the legal structure you’ve chosen, there are different forms to fill out. It’s also important to note that if you’re starting an LLC, you’ll need to obtain an Employer Identification Number (EIN) from the IRS.
5. Obtain necessary business licenses and permits
It’s essential for businesses operating in Chicago to obtain any necessary licenses and permits that are required in the city and state. Every industry is different, so it’s important to research the requirements for your specific industry. In some cases, the registration and license process can be lengthy, so it’s important to plan ahead to avoid any delays.
Topics:
