Organizing an Illinois Business Entity

Documents Required

• Entity Filing With Secretary of State (LLC, C Corporation, S Corporation Usual Forms)

• Federal Tax ID Application

• State Tax Registration

• Local Tax Registration

• Licensing, If Required

Entity Filing With Secretary of State: Choice of Entity

a. Business Corporation (subchapter C) tax at entity level and 2.5% pass-through tax and franchise tax: qualified small business stock capital gains tax excluded

b. Limited Liability Company taxed once at owner level, 1.5% pass-through tax, $500 fee to file: Sub S business corporation lower fee, but franchise tax and non US owner restrictions

Entity Filing With Secretary of State: Business Corp (C or S)

1. Search to see if proposed corporation name available in Illinois:

https://www.cyberdriveillinois.com/departments/business_services/corp.html

WARNING: State corporate name does not give federal or state trademark rights: check Google and USPTO/state registers, too, to be sure name available

Entity Filing With Secretary of State: Business Corp. (C or S)

2. File Articles of Incorporation online:

https://www.cyberdriveillinois.com/departments/business_services/incorporation/corp_instructions.html

Fee: $281.46

Pdf form, use to check fill-in data: https://www.cyberdriveillinois.com/publications/pdf_publications/bca210.pdf

Business Corporation Internal Organizing Documents (C or S)

Create “Corporate Book” with Articles of Incorporation as filed with SoS and:

1.Shareholder actions to elect Board/Officers, Shareholder agreements

2.Board actions to adopt Bylaws

3.Federal/State tax and other registrations

Entity Filing With Secretary of State: LLC

1. File Articles of Organization online: http://www.cyberdriveillinois.com/departments/business_services/organization/llc_instructions.html

Fee: $614.10

Pdf form to check fill-in items for online form:

http://www.cyberdriveillinois.com/publications/pdf_publications/llc55.pdf

LLC Internal Documents

Create “Corporate Book” with:

1.Articles of Organization as filed with SoS

2.Member Actions to adopt Operating Agreement and elect Managers/other officers (if any)

3.Tax, other registrations

Federal Tax ID Application

• File form SS-4 onlinehttps://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

No filing fee

Pdf of form and instructions available at:

https://www.irs.gov/uac/form-ss-4-application-for-employer-identification-number-ein

Sub S Corporation Election

• File form 2553, available with instructions at:

https://www.irs.gov/businesses/small-businesses-self-employed/s-corporations

No need to file for C corp status or LLC pass-through (no entity level tax) treatment

State Income/Sales/Excise Tax Registration

File through My Tax Illinois online:

http://www.revenue.state.il.us/businesses/register.htm

Pdf of form REG-1, to check fields to fill in online, available at:

http://www.revenue.state.il.us/taxforms/Reg/REG-1.pdf

Need federal EIN to file, do this after SS-4

State Unemployment Insurance Tax Registration

Online registration required within 30 days of organization: Use Illinois Tax Net:

http://www.ides.illinois.gov/Pages/Are_you_a_new_employer_register.aspx

Pdf of form UI-1 available, to check fill ins needed for online form:

http://www.ides.illinois.gov/IDES%20Forms%20and%20Publications/UI-1.pdf

Local Tax Registration

Chicago requires registration: most other cities instead have “general business license”, not so many special taxes)

Chicago Department of Revenue WebTax: https://www.cityofchicago.org/city/en/depts/fin/provdrs/tax_division/svcs/pay_and_file_yourtaxesonline.html

State Licenses

• Many industries have separate incorporation/registration or permit requirements. See generally: https://www.illinois.gov/business/pages/registration.aspx

• Individual licenses (except law) generally available through Department of Financial and Professional Regulation:

https://www.idfpr.com/

Local Licenses

• Licenses required for different lines of business vary by county, city, sometimes township

• City of Chicago licenses, see:

https://www.cityofchicago.org/city/en/depts/bacp/sbc/business_licensing.html

Entity Service Options

Do it yourself: state/local fees, use links in this presentation, copy available if email wprice@growthlaw.com

Legal Service Options

Basic: state fees plus $250 gets LLC or corp organized plus EIN

Corporate Book Setup Package: Articles of Organization, EIN, bylaws or Operating Agreement, initial entity actions, bank resolutions: $500 plus state fees

Deluxe: Setup package plus tax/license forms and registration help: $350/hour, (est. 10 hours) or $3500 flat fee plus state fees

For More Information/CC of Presentation

Contact William A. Price, Attorney at Law

www.growthlaw.com

Tel: 1-800-630-4780

P.O. Box 1425, Warrenville, IL 60555

Email: wprice@growthlaw.com