Every state in the US offers a unique opportunity for aspiring business owners, and Illinois is exception. Starting a business can be a very confusing process, with a lot of forms to fill out and rules to understand. Business law in Illinois controls the process by which you can register a business in the state. The first thing you have to do to start a business is determine what kind of ownership the business will have.
What is Sole Proprietorship?
Founding a business a sole proprietorship (a single owner) or a partnership (two or more owners) requires following certain regulations. Business law in Illinois includes the Assumed Name Act, which states that any business that doesn't use the full proper name of its owners must register with their local county clerks office.
If a sole proprietorship will be paying wages to one or more employees, they must allow follow the procedure to obtain a Federal Employer Identification Number. They must also obtain this number if they will be filing any tax returns for excise tax or taxes on alcohol, tobacco or firearms.
What is a Partnership?
A special type of partnership is a limited partnership. One person, known as a general partner, generally runs these types of businesses day-to-day, however they also are partially owned by limited partners. Limited partners invest money to help the company grow, but they have limited liability if the company fails. Real estate businesses, oil and gas companies and equipment leasing businesses are all business that commonly use limited partnerships.
What is a Limited Liability Company?
Another option for new businesses it that of a limited liability company, or LLC. An LLC is an alternative to a corporation. They offer the same limited liability and flow-through tax treatment but also have more operating flexibility and allow the owners stricter control over the business. This is a good choice for all kinds of companies, the exceptions being insurance companies and banks, which are prohibited by business law in Illinois from being LLCs.
What is a Corporation?
For companies with a more complex setup, a corporation may be the best option. A corporation is a legal entity unto itself. Corporations operate by selling shares of stock that act as certificates of ownership to as many people as they want. These shareholders have a say in the business by electing a board of directors who then elect the primary officers of the corporation. Shareholders have limited liability in the business, making an attractive option to invest in.
