Things to Consider When Forming LLC in Illinois
Forming an LLC in Illinois: Beyond Filing Forms3 min read
Creating a Limited Liability Company (LLC) in Illinois involves more than just filing forms and bringing your business to life with the secretary of state. The nuances of the legal landscape of the state of Illinois should be taken into account to ensure that your business is set up for success. Whether you are a New York based businessperson looking for counsel that understands local regulations or someone looking to begin their business journey in Illinois, there are five things you need to be aware of when filing for LLC in the Land of Lincoln.
First, you should understand the formation process and requirements of your LLC. The actual LLC formation in Illinois is a straightforward process and requires the filing of an Articles of Organization LLC form, which can be completed CPIL (Corporate, Partnership and Limited Liability Company Information System) website. Once you’ve completed and filed your form, the state of Illinois will send you a confirmation letter notifying you of your LLC’s formation. In order for the filing to be approved, certain fields must be filled out in the Articles of Organization form such as: the LLC’s name, address, purpose, registered agent, and designated organizers.
Second, you should obtain the appropriate licenses and permits. To legally do business in Illinois, your newly formed LLC must obtain business licenses from the state. Depending on the nature of your business there may also be licenses and permits required from the local governments in counties or cities you wish to do business in. Furthermore, depending on the industry in which you are entering, there may also be other specific licenses related to the industry that must be acquired.
Third, you should adhere to the operating rules of the LLC. Every LLC is subject to certain laws, regulations, and the operating rules created by the owners of the LLC. These operating rules are written into an LLC Operating Agreement, which outlines the expectations and responsibilities of the owners as well things that will be specific to your LLC such as how new members of the LLC are added, how decisions are made amongst the LLC’s owners, and more.
Fourth, you should understand the tax filing requirements. Filing taxes for an LLC is different from filing taxes for a corporation. Throughout the year, LLCs in Illinois must file quarterly estimated – state and federal – taxes, and a 940 Form once per year. Additionally, LLC owners may be required to pay Illinois’s Business Retention Tax.
Finally, you should have a plan for how the business will be managed. While members of the LLC are generally given the freedom to make their own decisions about running the business, the LLC agreement should be able to provide some sort of written guidance regarding the business’s day-to-day operations. It should also indicate what powers each LLC members have and how voting works.
Setting up an LLC in Illinois requires a little bit more than just filling out some forms. To take full advantage of the potential and opportunities that an LLC can provide, it’s important to have a better grasp on the diverse elements that come into play when forming an LLC. These five considerations will help you to make an informed decision about how to structure and operate your LLC.