How To Start An Llc In Illinois

Starting a business in Illinois is not something that everyone thinks of. However, with the rising opportunities that are in the state, Illinois is becoming a very attractive state for forming an LLC. In this article, we will provide you with guidance on how to start an LLC in Illinois.

Why Start a Business in Illinois?

Traditionally Illinois has not been noticed as a great location for business. The state often has a budget deficit and does have one of the best financial ratings. However, in recent years this has changed and this has invigorated business optimism and there is renewed interest in the business sector.

In addition, Illinois has the third largest metropolitan area in the United States and the population is considered to have a high disposable income. The state is also known to have well-skilled workers, allowing businesses to find the talent that they need to make the work better.

You can compare Illinois to other states that are nearby in the table below:

One of the biggest problems with the state is that it has a fairly high tax rate. In addition, the costs for filing the Articles of Organisation, which are a key part of the forming LLC process, are relatively expensive compared to neighboring states.

However, it should be noted that while the costs are high compared to nearby states, the costs are not the highest in the United States. And the Annual fee for the LLC is not near the highest in the country, in fact, compared to the average of the US, the annual minimum tax contribution is much lower.

Why Start an LLC in Illinois

An LLC is a business structure that offers significant benefits for both the business owner and the economy as a whole. An LLC business is treated like a different entity to the individual owners. Therefore, if the LLC collects debts that cannot be paid, and creditors seek to claim assets to pay them off, the personal property of the business owner is protected.

In addition, there are some tax benefits. Owners of an LLC are treated like self-employed business owners, which have a better tax burden than those who are owners of corporations. This can offer more disposable income, allowing an individual to have less work, but earn more money.

At the same time, you can register your business name within the state, this will protect your name from being used by another person or business. This means that you can prevent your audience from being confused between your brand and another.

There are also benefits for your business’s cash flow. For example, it is far easier to get access to business bank accounts and private funding as an LLC. And you will find that you will get more respect from suppliers as an LLC, therefore you can get better credit terms from suppliers. For example, you might get better interest rates or longer payment terms.

What you Need Before Starting an LLC in Idaho

Before you can start to register an LLC in Idaho, there are a few things that you need to organize before you get going.

The first thing that you need to do is have a business name. The business name will need to have followed some basic state laws. For example, you need to ensure that you need to have an LLC or Limited Liability Company in the name. You also need to make sure that you have a name that doesn’t include certain restricted words and that the name is available in the state.

The only way to reassure you that the name you have chosen is available in the state. To ensure a business name is available in the state, you can do a business name search. This is a free option that allows you to check for existing businesses with the name which can be the same or slightly different.

In addition, you will need to have a registered agent within the state. The registered agent is a representative in the state who can take paperwork, and be in contact during business hours. The registered agent is required to be a resident with an address in the state. They also need to be available during normal business hours.

You can have someone from your business act as the registered agent. Or you can hire a company that can act as your business’s registered agent. This can be a great option for many businesses as they can also remind you of important filing dates and other information.

Two of the best options include ZenBusiness and Bizee. These are companies that can act as registered agents in numerous states as well. They are also able to help you with the process of registering your LLC in the state.

How Much Does it Cost to Register an LLC in Illinois?

There are numerous costs when it comes to starting an LLC in Illinois. For starters, you will need to reserve your business name, which costs $25. You might also want to use a DBA name, which is another $25. Then you will need to file your Articles of Organization which will cost $150 when you file them online.

If you’re going to register a foreign LLC, then there is an additional cost of $150.

For every year there is also going to be an Annual report fee that is $75.

How to Start an LLC in Illinois

Here are the steps to starting an LLC in Illinois. This isn’t a complicated process, though it does take some time.

Step 1 – Choose your Business Name

The first thing that you need to do is choose what your business’ name is going to be. The best practice is to ensure that you can use any name that you decide upon. There are several ways to do this, but ideally, you want to check that the name is not taken with Google, social media, and a business name search.

You might also need to check on Etsy and eBay sometimes has businesses on the platforms, but they have no other registrations across the internet.

Step 2 – Reserve your Business Name

The formation of the LLC can take several weeks to complete. During that time, your name might be taken. Therefore, you can reserve your business name to ensure that no one can take the name during the process. There is a cost for this, and the reservation doesn’t last forever, so you need to ensure that you start the process for the LLC.

Step 3 – Select a Registered Agent

Now you need to select your registered agent. As mentioned earlier in the article, you can hire a business like ZenBusiness or Bizee to act as your state’s registered agent. What you need to make sure of is that any registered agent has a physical presence in the state. In addition, they should be available during normal business hours.

Step 4 – Certificate of Organization

The next step is for you to file your Certificate of Organization. This document can be submitted online or you can mail the documents to the Secretary of State. The certificate takes a lot of details to complete, you will need to check that you have all the information filled in before you submit the documents.

Step 5 – Operating Agreement

Once you’ve completed the Certificate of Organization, you need to create an operating agreement. This document is not a required document, but it acts as a great way to defuse tension in the business. When there is a disagreement, you can just refer to the operating agreement.

Step 6 – Apply for the EIN

When you’ve completed the above steps and you’ve got the documents for your LLC, then you can collect your IRS Employer Identification Number. This is legally required for those LLCs that have more than one member. And it is also required for those businesses that want employers. The EIN is a free number that can be obtained from the IRS website.

The EIN can also be helpful for opening a bank account and applying for funding from banks, investors, and others.

Taxes in Illinois

In Illinois, LLCs have to pay 1.5% of all their net income as a state tax. This is made payable to the Illinois Department of Revenue. However, you may opt to register your LLC to be taxed like a corporation.

You can speak to an accountant to seek their opinion on what is the best process for your business.

Final Word: How to Start an LLC in Illinois

When it comes to learning how to start an LLC in Illinois, you don’t have to have many qualifications. The process is much easier than some people think. Above are the steps on how to start an LLC in Illinois with some excellent tips to make it work better.