There are several ways to organize businesses in Illinois. They are Sole Proprietorships, General and Limited Partnerships, Limited Liability Partnerships (LLP), Limited Liability Companies (LLC), "S" Corporations and "C" Corporations.
Before selecting a business type, consult an attorney or accountant for assistance in determining which one is best for your business.
Sole Proprietorship and General Partnership
When a business name is different from the owner(s) full legal name(s), the Illinois Assumed Name Act requires sole proprietorships and general partnerships to register with their local county clerk's office for registration under the Assumed Name Act. Sole proprietors must have a Federal Employer Identification Number if they pay wages to one or more employees, or file any pension or excise tax returns including those of alcohol, tobacco or firearms.
Limited Partnership
A Limited Partnership is an organization made up of a GENERAL PARTNER, who manages a project, and limited partners, who invest money, but have limited liability and are not involved in day-to-day management. Limited partnerships are typically in real estate, oil and gas, and equipment leasing and family partnerships.
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Limited Partnership Section
501 South Second Street
Room 357, Howlett Building
Springfield, Illinois 62756
217.785.8960
TTY: 1.800.252.2904
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Limited Partnership Section
17 North State Street
Room 1137
Chicago, Illinois 60602
312.793.2872
TTY: 1.800.252.2904
Limited Liability Company
A Limited Liability Company (LLC) is the non-corporate form of doing business that provides its owners with limited liability, flow-through tax treatment and operating flexibility through participation in management of the business. The LLC is well suited for every type of business venture, except banking and insurance which are prohibited by Statute. Examples of acceptable businesses are: farming, agricultural services, mining, construction, manufacturing, transportation, wholesale and retail trade, investment companies, insurance agents, real estate brokers, all types of real estate ventures, hotels, personal and business services, automotive sales and services, amusement and recreation, health services, accounting, architecture and other professions, just to name a few.
Limited Liability Partnership
If organized as a Limited Liability Partnership under a specific section of the General Partnership Act, partners are not liable for the debts, obligations and liabilities of, or chargeable to the partnership arising from negligence, wrongful acts, omissions, misconduct or malpractice committed while the partnership is a Limited Liability Partnership.
"C" Corporation
A corporation is a distinct legal entity and is the most complex form of organization. A corporation may sell shares of stock, which are certificates indicating ownership, to as many people as is desirable. The shareholders then elect a board of directors, which elects a president and other officers who run the company on a day-to-day basis. Among the advantages of corporate formation is a limited liability of the shareholder and ease of transferring ownership. If the name of the business includes the word "Corporation," "Inc.","Incorporated" or "Corp.", then the business must be incorporated.
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Business ServicesRoom 328 Howlett Building
Springfield, Illinois 62756
217.782.6961
TTY: 1.800.252.2904
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Business Services
17 North State St., Room 1137
Chicago, Illinois 60602
312.793.3380
TTY: 1.800.252.2904
"S" Corporation
Electing S Corporation status is an option that must be made through the Internal Revenue Service (IRS) when starting a business. In general, an S Corporation passes through income and expenses to its shareholders, who then report them on their own income tax returns. To qualify for S Corp. status, a corporation must meet several requirements, one of which limits the number of shareholders. Get online or contact:
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Business Services
Room 328 Howlett Building
Springfield, Illinois 62756
217.782.6961
TTY: 1.800.252.2904
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Business Services
17 North State St., Room 1137
Chicago, Illinois 60602
312.793.3380
TTY: 1.800.252.2904
