The process of forming an LLC in Illinois can be expedited with the assistance of incorporation firms. They provide services such as researching the availability of names and filing the Articles of Organization with the Illinois Secretary of State.
Illinois LLC names are required to be accompanied by designations such as “LLC”, “L.L.C.”, and “Limited Liability Company”. The state requires that the entity looking to form an LLC must have a name that is not too similar to another existing entity, corporation, and limited liability company. Certain words are restricted in setting up an LLC name in Illinois.
Names that are restricted include:
• Chicago 2016
Additional words that are restricted include union, corporation, corp, Inc., LTD., Limited Partnership, Co., and Limited Partnership. Business formation firms can help research company names and ensure they meet state requirements.
LLC formation also requires registration with the Illinois Department of Revenue. Registered businesses can be allowed to purchase and sell assets, and hire employees. Costs and fees involved in forming an LLC in Illinois include a $500 state filing fee. Expedited fillings can shorten the process to 24 hours.
Illinois LLCs are required to file an annual report with the Illinois Secretary of State after a year from the date of the initial filing. Only members or managers have the authority to sign annual reports, the signatures can be emailed or faxed.
What is an LLC?
LLC refers to a Limited Liability Company, and it is organized by business owners. They have fewer corporate formalities and can be taxed by the IRS as a sole proprietorship, S corporation, or C corporation.
Each state has different requirements and regulations regarding the formation of an LLC. Business owners should check with state laws when considering forming an LLC.
Owners of LLCs are known as members, they can be individuals, corporations, other LLCs, or foreign entities. There is no limit on the number of members an LLC can have. In most states, “single-member” LLCs are allowed, where there is only one owner involved in managing the LLC.
The IRS will treat the LLC as a corporation, partnership, or included in the LLC owners personal tax return. A domestic LLC with at least two members is classified as a partnership for federal income tax purposes unless they file Form 8832 and elect to be treated as a corporation.
LLCs carry tax advantages over other forms of business such as limited partnerships. The owners of an LLC do not assume personal liability for business debt, and any losses of the LLC can be used as tax deductions against active income.
An LLC can be formed through the state business formation process or consulting with LegalZoom.