Create a name
You need to give your LLC a good name: one that’s catchy, to attract customers, and one that’s legitimate, for legal purposes. Legally, your company’s name cannot contain any restrictive words, such as doctor, attorney or university, and it has to be distinguishable from any other entity registered in Illinois. As well as this, it must contain the words limited liability company, or some other abbreviation of this. Once you’ve decided, you must make sure to check it’s available, and then be able to commit to it once you put it down in your Articles of Organisation.
What else should I keep in mind for a name?
At some point, if your business is doing good you might want to open a website – even if you don’t want to right now. So it’s beneficial to check if there’s a URL available with your company name and even buying it, to reserve for the future.
Appoint a registered agent
This will be needed to put down on your Articles of Organisation. A registered agent is responsible for doing things like receiving important legal documents on behalf of your LLC, and can be a service or a person – it can even be yourself, because Illinois gives you the opportunity to do that. However, many businesses choose to hire a professional instead, for various reasons.
Should I be my own registered agent?
If you’re considering this option, here are a few things to keep in mind:
- You will need to maintain normal business hours daily, at the specific address you provide (if you run your business from home your home address will be made public)
- You must keep up on important documents, dates and deadlines
- You must be prepared to be served at any time.
File Articles of Organisation
Once you have a name and a registered agent, it’s time to officially form your LLC. In order to do this you must file your Articles of Organisation with the Illinois Department of Business Services Limited Liability Division under the Secretary of State’s office. You can do this with the help of a lawyer or an LLC formation service, or just do it on your own. The cost for filing this will be $150, and the form itself can be found online.
Create an Illinois LLC Operating Agreement
This step is optional, as Illinois does not require you to have an operating agreement, but it is still highly recommended, particularly for multi-member LLCs, and is even compulsory in some states.
Why do you need an operating agreement?
Having an operating agreement is the only way for you and your members to define each of your roles and lock down the management and ownership structure of your LLC. This will prove to be a great help in the future, as it is something you can constantly revisit when a dispute or a lawsuit arrives, helping to end a problem straight away.
What should one have in an operating agreement?
Your operating agreement should specifically outline each member’s responsibility, how and when new members can join, if existing members can leave and transfer their membership, and how profits and dividends will be divided between everyone. These are basic things to ensure smooth sailing – you can, of course, add as many different clauses as you’d like.
Get an EIN (Employee Identification Number)
An EIN is essentially like a social security number for a business, used by the state to track your company’s activity. But apart from this, having an EIN is great for a lot of things. EINs come in handy for things such as opening a business bank account, filing federal and state taxes, and being able to hire employees. You can apply for this through the IRS website.
TRUiC has more handy tips and detailed information on how to start an Illinois LLC. Visit their site to learn more.