HOW TO START AN LLC IN ILLINOIS
Getting started with an LLC in Illinois does not have to be daunting. There are many options to make it easier, including online filing and research choices that can provide knowlege and information that can be used to make an informed decision. Overall, any business takes work, but creating an LLC in Illinois is one of the ways to get a business started and be able to protect the owner, the company, and the customers through proper legal regulation that doesn’t stifle what the company is trying to accomplish.
Naming the LLC
- It’s possible to search online to find a name for an Illinois LLC. Most people have a name in mind anyway, but that name may not be one that they are allowed to use. That can be because another company already has that name, or because some of the words used in it are restricted or prohibited in some way. Prohibited words are generally those that are used by federal and state agencies, so they cannot be used by an LLCs because it could cause confusion and be a risk to consumers. Additionally, it’s important to make sure the domain name is available so the LLC can coordinate its web presence as well as its filing with the state.
Select a Registered/ Statutory Agent
- When an LLC is formed, one of the things that needs to be done is the naming of a registered, or statutory, agent, This can be an individual person or a corporation, but either way there are requirements that must be met. If the registered agent is a person, they must be a resident of Illinois. If it’s a corporation, they have to be authorized to do business in the state. Otherwise, they will not qualify. The registered agent does not have to be a third party, though. It can also be someone in the LLC, including the owner. Incfile offers FREE Registered Agent service for the first year with every package or as a $0 standalone service.
File Articles of Organization
- Illinois requires Articles of Organization for a domestic LLC, and these can be filed online, making it easier for a business to become an LLC in the state. The fee for filing the Articles is $500, which is higher than what is required in many states. These Articles are essential, though, as they define the business and its intent. While not all states call these the same thing, they are required in some form in every state. They also provide valuable information about the business that can be used for tax, insurance, licensing, and other purposes.
Create Operating Agreement
- An operating agreement is not required in Illinois. This is true of most states, although there are some that still require the agreement. Even though the state doesn’t require the agreement, though, it is not necessarily a bad idea to have one. It provides a lot of solid information on the operation of the business, which can be helpful if there are ever problems or concerns. However, the state won’t ask for or require it.
RUNNING YOUR BUSINESS
Getting Your EIN
- An EIN is an employee identification number, issued by the Internal Revenue service. Sometimes it is also called a Federal Tax Identification Number. It’s a unique number issued to each business. You’ll need an EIN to open a business bank account; file Federal and State Taxes; and hire employees.
- Before you get your EIN make sure your new business has been properly formed before applying and be wary of paid sites. EINs are free direct from the IRS.
- The easiest way is to apply online for an EIN. Note, the IRS website has office hours, and is only available Monday through Friday, 7am to 10pm. Yes, we also agree this is one of the most ridiculous things we’ve ever seen. You can call 1-800-829-4933, between 7am to 7pm of your time zone, Monday to Friday. Snail mail: You can download the form and mail it in.
Keeping Business and Personal Accounts Separate
- Get a business bank account for your business. This will help you protect your personal assets from potential creditors and lawsuits, and will also make life a lot easier come tax time.
- Get a business credit or debit card. This will help you keep your expenses separate and easier to track.
- No matter what business you run, accounting software and processes is a must for any small business. If you have an accountant, ask them which software they work with and recommend. A good accounting system is necessary to track income and expenses, so you can easily see if you’re making money and make filing income taxes so much easier.
- Always try and find something that will: sync with all of your bank and credit card accounts automatically – not just downloads, but auto sync; auto-match vendors, customers and other accounts; and let you accept credit cards and ACH drafts with ease. This can be applied for online, as can unemployment.
Setting Up for Taxes in Illinois
- Requirements for setting up an LLC in Illinois include various taxes, and any required licenses and permits. These permits will be different depending on what the LLC does for its actually business dealings, as well as other factors.
- The state requires that an LLC pay unemployment insurance tax, which helps to fund employees when unemployment benefits are needed.
- The employee withholding tax is another state requirement, designed to make sure income taxes are properly paid.
- The state of Illinois requires LLCs to pay sales tax in most cases. However, the LLC may not need to file sales tax if it doesn’t have any goods or services for sale that the state considers taxable. The other tax requirements, though, will remain the same.
Getting Insurance for your LLC
- Hiring employees means needing Workers’ Compensation insurance, which protects both the workers and the company from financial problems and concerns when there is an injury. Other types of insurance are not required by the state, but they may be desired by the LLC for protection and safety. Most companies have at least a general liability policy.
KEEPING YOUR LLC COMPLIANT
FILING A FOREIGN LLC IN ILLINOIS
- A foreign LLC can be registered online in Illinois by filling out the required paperwork and paying the $500 fee. Other requirements may need to be met, depending on the nature of the business and its other locations.
ABOUT HOW TO START AN LLC
I'm an entrepreneur myself. When talking to others who want to start their own business, they often get wrapped up in the nitty gritty of paperwork and forming the company. They forget that what really matters is customers, sales, and profit. That's why I created How to Start an LLC.org: a simple resource and guide so you can spend less time on forming your company, and more time on building it.
My lawyers want me to remind you that I'm not a lawyer and that I'm completely unqualified to offer legal advice. This site is meant to serve as a reference for you on your journey. If you have questions or concerns, please contact a qualified lawyer (or accountant) to help you. Also, as a general rule, never take random legal advice on the internet.