Forming a limited liability company, (LLC), might be the right choice for the business you are creating or restructuring if you are looking to protect you and/or the other business owner's personal assets.
Here is why...
Limited Liability means there is a separation between the business’s assets and the owners’ personal assets, shielding personal assets from the business risks. C-Corporations, S-Corporations, and LLCs all provide limited liability protection.
An LLC in Illinois is among the least complex of the many business structures in the state. In comparison to S and C corporations, LLCs have a structure that is fairly flexible. Some of the perks that owners of LLCs enjoy include limited liability, pass-through taxes, and the legal protection of personal assets.
Steps in Forming an LLC
There are five steps in the process of forming an LLC. These steps are as follows:
- Select a Name for your limited liability company.
- Choose an individual or business to act as the Registered Agent.
- File the Articles of Organization.
- Make an Operating Agreement.
- Obtain an Employer ID Number.
Guidelines in Choosing a Name
The first thing you should do is conduct research to make sure you choose an appropriate name for your LLC. This name should be relevant to your LLC's industry, and the name should be easily searchable for the average person.
The entity name needs to include the words "Limited Liability Company" or an abbreviation (e.g.; LLC and L.L.C).
If you want to include a restricted word in the name of your LLC, you will need to fill out more paperwork. To have your request to include a restricted word approved, you may be required to have a licensed individual join your LLC as a member. "Bank," "university," and "attorney" are some examples of restricted words.
Prohibited words cannot be included in the name of your LLC no matter what. "Secret service," "treasury," and "FBI" are a few examples of prohibited words. Words that are typically seen in the names of government agencies tend to be prohibited.
Perform a Name Search
Do a name search on the website of the State of Illinois to make sure the name you've selected for your LLC is original. You should also check to make sure a domain name is also available for your domain name. It is recommended that you buy a domain name for your LLC as soon as possible, even if you're not going to start working on your website today.
You should also keep the professional email address in mind when selecting a name for your LLC. You can sign up for a professional email for your LLC with the help of your website platform host or platforms such as Microsoft Office 365. A professional email will have the domain name of your company (e.g.; "anyname@yourcompany.com").
Many people find the requirements for naming an LLC fairly confusing. The main rules you should keep in mind are to select a name that is original and includes a few of the required words. You can check your LLC's name for originality by submitting a paper form through the mail or by checking the website of the Secretary of State.
File the Paperwork
You can file the form LLC-1.15 to reserve a name. You must submit this completed form to the Secretary of State Department of Business Services. The completed application should be accompanied by the required filing fee. The application should include the name you want to reserve and information about the applicant. For example, the name, address, signature, and title of the applicant should all be included.
Unlike in many other states, the abbreviations "Co." and "Ltd." are not permitted in the state of Illinois for an LLCs name. Names also cannot include "Corporation," "Inc.," "Ltd.," "Limited Partnership," "Corp.," or "L.P."
There is a cost to file a cancellation of a reserved name for an LLC and a filing fee for a transfer of reserved name.
You can use form LLC-1.20 to adopt an assumed name and file it with the applicable filing fee. There is also a fee to file: an application for changing an assumed name, to cancel an assumed name and to renew an assumed name.
If a limited liability company has been administratively dissolved in the state of Illinois, the name cannot be used by another corporation or LLC until three years after the date when the notice of dissolution was issued.
Ready to form an LLC?...
If you know an LLC is the entity you need to form and know you only need to generate specific forms and additional documents, with minimal attorney feedback, then you might want to purchase any one of the PLC, Ltd "Business Essentials - LLC packages" or go to the "About Business Essentials" page to find out more about how to register for a free online account and gain access to view and request other "ad-hoc" online "Business Essentials" virtual legal services.
If you know that you have more complex needs, such as: help with deciding the type of legal entity to form, help with conducting the name and/or TM search and registration, help with preparation of all forms and filing, help with any needed business licenses, help with the drafting of any customized agreements (between owners, founders etc) and, after formation, continued legal advice and guidance for your business - you can contact PLC, Ltd to inquire about a scheduled strategy session to find out more about flat-fee business formation packages and GC services offered. Click here to send an inquiry.