Step 1) Verify & Secure a Name
The most important step: pick a name! Choose a unique name, not too similar to another registered name, and one that does not contain restricted wording (e.g., banque, banc, etc). Remember to include ‘Limited Liability Company’ or ‘L.L.C.’ in your company name.
Follow these Steps:
- Choose a name, and ensure it is available by conducting a Business Entity Search
- If concerned about trademark issues, perform a TESS System search to check the U.S. Patent office database.
- If needed, request a Reservation of Name Application to reserve your LLC name for 90 days ($300 fee)
Remember, this isn’t optional in Illinois-- it’s mandatory.
Quick Note: Before you commit 100% to a name, you may also want to check that there’s a decent URL available for your business. Use Weebly to search your options. If there’s a quality domain name for purchase, we advise buying it right away. Even if launching a business website isn’t on your radar right now, it’s going to be soon, and you might as well nail down a domain name that’ll make it easy for customers to find you!
Step 2) Choose A Registered Agent
When starting an LLC, you are required to designate a registered agent to handle official documents on behalf of your business. They must be a person residing in Illinois or a business entity legally registered with the Illinois Secretary of State and have a physical address (no P.O. boxes!) where legal notifications can be received. They also must be available during regular Monday through Friday business hours.
Designate a registered agent by electing someone within your company, hiring an outside professional, or starting an LLC through a service (such as IncFile) and receiving a qualified Registered Agent free of charge!
Step 3) File Articles Of Organization
To legally register an LLC in Illinois, articles of organization must be filed with the Secretary of State that declares the basics of your business for the public record. Don’t file until you’re ready!
File your Articles of Organization online or download the form here. Payment must be made by certified check, cashier’s check, Illinois attorney’s check, C.P.A.’s check or money order payable to Secretary of State.
Filing Fee: $150
Step 4) Get An EIN
An EIN, or Employer Identification Number, functions much in the same way as a Social Security Number for individuals. Just as every citizen is required to get a SSN, every business is required to procure an EIN to set up bank accounts, legally hire employees, track business activity, and process taxes.
Register for an EIN at the IRS Website quickly and completely free of charge.
Step 5) Open A Business Bank Account
Setting up your brand’s business account should be the fun part. Banks and credit unions are going above and beyond to attract clients through amazing perks, benefits, and smaller fees. Be sure to shop around and see what’s available. Don’t assume that where you bank personally is the best option.
Speaking of which, make sure that your brand’s business accounts are completely separate from any other accounts of any kind. There should be no muddying of the financial waters. Don’t put yourself, your team, or your company at risk.
Follow these steps:
- Research Small Business Checking Accounts.
- Set up your business bank account!
Step 6) Draft An Operating Agreement
An operating agreement outlines ownership and operating procedures, and adds a layer of safety for your company and lays out duties and responsibilities.
While it is not mandatory, or a legal requirement, it “defines each member or manager’s rights, powers, and entitlements. This includes capital accounts, membership interest, distributions of profit and allocated tax responsibility, etc.” We’d argue this should be a requirement, but the state doesn’t care if you fail due to lack of structure.
Utilize one of these Operating Agreement Templates to get started.
Step 7) Handle Business Taxes & Licensing
This part of the red tape process is where you nail down all the paperwork and fees you’ll need to take care of to get right with the Illinois regulatory environment.
How simple or complex this step is depends on a number of variables like the nature of your business, whether you serve the public, what your physical location is, your number of employees, etc.
Follow these steps: