A limited liability company, or LLC, provides legal protections of personal assets similar to what a corporation offers, but is less complex and has fewer fees, formalities and paperwork. Forming an LLC in Chicago is not a complicated process if you follow each of the steps required by the city of Chicago and the state of Illinois. It can be argued that the hardest part of the process is coming up with the original business idea.
Choose a business name that’s both memorable and appropriate for your business. Note that Illinois law requires that the words “limited liability company,” “L.L.C.” or “LLC” be included in an LLC business name. Check with the Cook County Clerk’s office to ensure that your desired business name is available, then with the United States Patent and Trademark Office to verify whether a similar name already has a trademark registered. Also verify whether or not a Web domain is available for your desired business name. While this is not important to the forming of an LLC, you’ll find that it’s very important for the marketing of your new business. Once you’ve decided on a name, consider registering it as a federal and/or state trademark.
Consult with a Chicago-based business attorney to discuss your business plan. While you can create an LLC without an attorney, consulting with someone experienced with the laws and regulations in your locale can be invaluable. An attorney can also point out any local licenses that your specific business may require.
File “Articles of Organization” with the Illinois Secretary of State’s office. This short form asks for the contact information of the LLC members and the name of the LLC. In most cases, this can be done online at the Secretary of State’s website. This website also lists the current filing fees.
Request an EIN, or Employer Identification Number, from the Internal Revenue Service. You can apply for an EIN online and there is no filing fee. The EIN is needed for tax purposes and is required before you can open your new Chicago business.
Apply for a state tax ID number from the Illinois Department of Revenue. All businesses operating in the city of Chicago are required to obtain a state-issued tax ID number. You can register your business online at the Illinois Department of Revenue website.
Obtain a city of Chicago business license. All businesses operating within city limits are required to have a city-issued business license. You can apply for this license online from the city of Chicago website, or in person at the Business Affairs and Consumer Protection office at City Hall.
Open a business checking account at a local bank. You should keep the business finances separate from your personal finances, even if you’re initially the only employee of your company. Try to conduct all of your business-related banking at one location to establish a relationship between your business and the bank. This relationship can be helpful as your business expands and your banking needs grow.
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