A major consideration when starting a business in Illinois is whether to incorporate or not. There are entrepreneurs who say that incorporation is not necessary, however, there are also those who believe that incorporation is important and useful and that it is a must to incorporate before formally operating an Illinois small business.
To describe the process simply, incorporation is a legal procedure that structures your business as an entity. When your business becomes entity, it will be considered separate from its owner. It will be recognized by the state as independent entity and it will be given its own rights and privileges. With this, it will be able to enjoy benefits and perks.
Business owners have different perspectives as to the usefulness of incorporation. If you want to determine if it’s right for your business, here are 5 solid reasons that will help you decide if your Illinois startup needs to be incorporated.
Quick Note: If you decide to incorporate in Illinois and want professionals to handle all legal paperwork, look into IncFile (for $49) or LegalZoom (for $149). Both are excellent services and have started over 50,000 businesses like yours.
If you’re not the sole owner of your Illinois startup, expect that at some point, conflicts will definitely arise (you’re one of the lucky few if you don’t experience this). Whether conflicts originate from business or personal factors, it would be helpful if you prepare for this ahead of time.
Incorporated businesses are able to issue different types of stock, thus, when issues or problems arise among co-owners, it will be easy to initiate equal sharing of stocks because this feature is innate to incorporated companies.
If you want your Illinois small business to still exist even if it has outlived you or your co-founders, incorporating it would be best. You will have the opportunity to establish perpetual existence because the state of Illinois protects incorporate businesses.
Even if ownership or its management structure changes, the state will allow it to continue operating. As long as your Illinois startup stays incorporated, it’s difficult to dissolve even when one owner dies, transfers, withdraws or sells his/her shares of stock.
As mentioned, when you decide to incorporate your business, you will be able to recreate it into an independent entity, one with its own rights and able to conduct its own transactions. Therefore, if it encounters problems in the future, whether they are of legal or financial origin, you will not be held accountable for anything. Your business will have to deal with its problems on its own.
As part of its rights and privileges, your Illinois small business will have the chance to air its side and the state will respect its right to due process. With this, you and your business are protected if you incorporate.
Finding the right financing options when starting your business is the most difficult and this will be even harder if your business is unincorporated. Investors and financial institutions need assurance and protection and they can only achieve this if they deal with incorporated businesses.
Investors are highly attracted to the ability of incorporated companies to issue different types of stocks so this should be enough to encourage them to invest in your startup. Raise capital easier by incorporating your business.
Business Credibility is one of the most difficult things to establish. It may take years and years to fully gain the trust and confidence of customers. And even then, it can be taken away from you in a glimpse. If you would like to start on the right foot and make a positive impression, then you need to incorporate your Illinois startup.
Having an LLC or Co. after your business name will definitely make a big difference. People will know that your business is recognized by the state as an entity, thus, gaining their trust in the process.
To effectively incorporate your Illinois small business, you need to understand the process and have a little experience.
Incorporation will definitely not be easy for new entrepreneurs like you, however, you can seek assistance from online incorporation services. They’ll be able to help you out, regardless if you plan to form an Illinois LLC or Corporation.
There are numerous online incorporation providers who can assist you and I’m sure you’ve heard about LegalZoom – it’s one of the best online! But aside from LegalZoom, you have many other options left, below is a list of them!
If you’re looking for the right incorporation service, IncFile is the best fit for you!
It offers affordability and quality at the same time and at $49, you’ll be able to take advantage of great features such as a free registered agent service for one full year, one-business day preparation, order tracking in real time and one-on-one business consultations. You can read the review for more info!
CorpNet is a great incorporation provider for entrepreneurs who are looking for mid-level pricing. The incorporation service is also one of the best.
With its affordable pricing of $79, you can use a Business Structure Wizard, free business consultations, free trademark search, free business name search and 24-hour document preparation. You can read the review for more info!
BizFilings is a bit more expensive than the other two incorporation services, but it has the best offering in the market. It has an A+ BBB rating and an excellent track record.
If you wish to use BizFilings, you’ll be able to take advantage of its one-day business preparation and filing, business name verification, registered agent service and a lot more. You can read the review for more info!
These three incorporation services have major differences; for instance, IncFile offers a free registered agent service for one full year while BizFilings only has this for 6 months, for the rest of the remaining months, you’ll have to pay for the service. BizFilings has BizComply which is a compliance tool while IncFile does not have the feature. All these are just some of their differences.
Responsible business ownership means that you care enough for your company and that you are willing to take every measure to protect it.
It also means that you value your customers/clients above anything else and that you will respect their consumer rights as you aim to provide the best and quality products/services. All these things are only possible if you formally and legally register your business before the state of Illinois, in other words, if you incorporate.
Whether you want to incorporate your Illinois small business or not is your choice; you are the only one who can decide for yourself. Aside from taking into consideration the 5 reasons above, you may also want to assess your business needs such as tax obligations, risk liabilities, business objectives and more, so you will be able to come up with a decision.
If you decide to incorporate, you can ask assistance from a professional or use an online incorporation service to make things easier for you. Incorporating your Illinois small business will be challenging, especially if you’re still new in the business.