If you’ve decided that the business structure you want to start in Illinois limited liability company, you have some decisions to consider.
Limited liability companies are suitable for nearly any type of business besides those in the banking or insurance industries.
An Illinois LLC requires at least eight things you need to know. Here's what you'll need to know about forming an LLC in Illinois:
1. You Need To Draft Articles Of Organization
According to the state of Illinois, a business commences to exist when articles of organization are filed with the Department of Business Services. The articles must contain:
- Limited liability company name
- Address of the principal place of business
- Effective date of the Articles of Organization
- Name of the registered agent and address of registered office
- LLC purpose
- Term of existence
- The names and business addresses of the initial managers or any member having the authority of manager.
2. You Need To File A Fee
Each LLC filing must be accompanied by a fee.
In late 2017, the state reduced many of the LLC filing fees.
“This is a business-friendly law that significantly reduces the cost of forming and maintaining a
Limited Liability Company in Illinois,” Secretary of State Jesse White said.
3. You Need To Determine Your Liability
Arguably the greatest benefit of an LLC is that it is a limited liability corporation. This means that your personal assets are protected and are considered distinct from your business.
Forming an LLC helps you mitigate risks for those assets.
4. You Need To Decide How To Pay Taxes
You have several choices about how to pay taxes for your LLC in Illinois.
For federal income tax purposes, the LLC may be considered a sole proprietorship, a partnership, a corporation, or a subchapter S corporation.
Read this post from the QuickBooks Resource Center to help you better understand how you’d like to pay your taxes.
5. You Need To Decide How To Maintain Your Business\
Annual meetings are not required, nor does the state dictate recordkeeping requirements.
6. You Need To Decide Whether You Want Outside Investments
The QuickBooks Resource Center says it’s difficult for LLCs to obtain outside investment. LLCs can’t be traded on the stock exchange, and investors usually shy away from them in favor of corporations.
7. You Need To Think About The Long Term
In Illinois, an LLC remains intact despite an owner’s death. Arrangements should be made to discuss succession of the organization when a member leaves or dies.
8. You Should Create An Operating Agreement
An operating agreement is unnecessary to create an LLC in Illinois. However, most experts agree it would be wise to create one.
Operating agreements are for internal purposes and detail the business’ financial and functional decisions with rules, regulations, and provisions.
If this post has provoked more answers than questions, please contact us today to help you get started with your new LLC in Illinois.
For more resources, visit:
- A Guide For Organizing Domestic Limited Liability Companies
- What’s an LLC, and Is It Right for Your New Business?
- Forming an LLC in Illinois