What kind of legal structure to select will be one of your first selections if you’re thinking about launching a small business in Illinois. A sole proprietorship is frequently the simplest and most economical choice for business owners. In this post, we’ll explain how to form a sole proprietorship in Illinois and address any related queries you might have.
A sole proprietorship is a company that has just one owner and one employee. A sole proprietorship is not a separate legal entity from its owner, unlike a corporation or LLC, which means the owner is solely liable for all of the company’s debts and responsibilities. However, establishing a sole proprietorship is simple and inexpensive because there aren’t any official organizational requirements or papers to file.
The procedures to set up a sole proprietorship in Illinois are as follows:
1. Pick a name for your company. Your company name must be original and not being used by another company in Illinois. To confirm that the name you’ve chosen is available, search the company name database maintained by the Illinois Secretary of State.
2. File a business name registration. You must register your business name with the Illinois Secretary of State if you intend to use a name other than your own. Doing business as registration, or DBA, is what this is known as. Online or postal registration is an option.
3. Acquire all required licenses and permits. You might need to apply for numerous licenses and permits from the state or local government depending on the kind of business you’re launching and where it will be located. You may find out the licenses and permits you require by contacting the Illinois Department of Commerce and Economic Opportunity. 4. Request an EIN from the IRS. For tax reasons, your firm is identified by a unique nine-digit number called an EIN (employer identification number). You will need an EIN to create a company bank account and file certain tax forms, even if you don’t intend to hire any staff. On the IRS website, you can submit an online application for an EIN. 5. Open a company bank account. You should open a different bank account for your business since it’s crucial to keep your personal and professional finances distinct. This will simplify your tax reporting and make it simpler to track your income and expenses.
You might want to think about establishing an LLC (limited liability corporation) if you decide that a sole proprietorship is not the ideal legal structure for your firm. Since an LLC is a different legal entity from its owners, they are typically not personally responsible for the obligations and liabilities of the company. You must do the following actions in order to create an LLC in Illinois: Select a name for your LLC in step one. Your LLC name must be original and unregistered with another Illinois company. To confirm that the name you’ve chosen is available, search the company name database maintained by the Illinois Secretary of State.
2. Save the articles of incorporation. Articles of Organization must be submitted to the Illinois Secretary of State’s office. This legal paperwork creates your LLC and contains details like your company name, address, and registered agent. 3. Acquire any required licenses and permits. Similar to sole proprietorships, LLCs may need to apply for different licenses and permits from the state or local government in order to legally conduct business. 4. Draw up an operational contract. An operating agreement that describes how your LLC will be run, how profits and losses will be split, and what happens if a member leaves the LLC is a good idea even though it’s not needed by law.
The volume of applications received by the Illinois Secretary of State’s office and the precision of your application are two criteria that affect how quickly your filing will be processed. The processing of LLC filings by the Secretary of State typically takes 5 to 10 business days. Processing more quickly is possible for a cost.
The price to register a name as a trademark in Illinois varies depending on a number of variables, such as the type of application you submit and if you work with an attorney. Depending on the type of mark and the number of classes of goods and services you want to register, the costs for submitting a trademark application with the Illinois Secretary of State range from $10 to $300. What Small Businesses Are the Most Lucrative?
Real estate services, legal services, healthcare services, technology services, accounting and bookkeeping services, food and beverage enterprises, and real estate services. Remember that profitability also depends on elements like your company’s costs, your pricing approach, and client demand. Before launching a small business, it’s crucial to conduct extensive market and industry research to make sure your idea is a viable one.