General Guide to Company Incorporation in Illinois
Updated on Tuesday 25th June 2019
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With about 13 million residents, a flourishing and diversified economy, fascinating history and lots of natural resources among many others, Illinois is the 5th largest state in the USA. Being distinguished as the land of Abraham Lincoln, a former president which is known for all the measures and directions he took to abolish slavery, Illinois is also a suitable business location for foreign investors. We have prepared a general guide to company incorporation in Illinois, and additionally, our company formation specialists in USA can offer complete assistance when registering a business in this state, but also in others.
How to incorporate an LLC in Illinois
The business climate and the economic openings in Illinois are only two of the solid considerations why foreigners decide to set up companies and expand their activities in USA. The Secretary of State of Illinois, particularly the Business Division, is in charge of issuing the incorporation certificate for a limited liability company in Illinois. One of the important requirements connected to the company incorporation is the name of the business which must be verified before submitting any documents. Just like for any company formation in USA, a registered agent must be appointed for your LLC in Illinois, as he or she can represent the company from a legal point of view. We mention that in Illinois a company may act as a registered agent, taking into consideration the mandatory condition of having the establishments in the state.
Please keep in mind that, if you decide to enlarge your already registered company in USA and particularly in Illinois, it means that you register a foreign LLC in the state. All the terms and conditions of forming an LLC or any other type of company in Illinois can be solicited and explained by our company formation consultants in USA.
Create an operating agreement with your company in Illinois
Even if it is not a compulsory request, it is thought advisable to register and sign an operating agreement. This represents a legal document which comprises in detail all the aspects and information about the owners of the company, the purpose of the activities and the operations as an LLC in Illinois.
Register for EIN in Illinois
The Employment Identification Number represents the important code for company taxation purposes. The Internal Revenue Service in USA issues the EIN’s for enterprises in Illinois through the local offices, whether if they are established by local investors or by the ones from overseas. Entrepreneurs should be aware of the requirements of the EIN and should comply with the rules and regulations on taxation in USA.
Taxes for companies in Illinois
The state of Illinois imposes the following taxes for companies:
- the state income tax withholding;
- the unemployment insurance tax;
- the employee withholding tax;
- the Illinois sales tax.
If your business will hire staff and if the activities are related to the retail sector, then the fees mentioned above should be measured and considered. Still related to the taxes on companies, it is suggested to hire an accounting firm which will oversee the financial operations, transactions, registered incomes, the costs, and the annual tax filings.
How do I open a bank account for my company in Illinois?
From the beginning, we remark that it is recommended to separate the personal assets from the ones in the firm. This means that a business bank account can be opened at any bank in Illinois, where the account is normally established with a business credit card and varied internet services allowing the entrepreneurs to have access to their finances at any time.
Do I need accounting for my business in Illinois?
Yes, it is highly recommended to have an accounting firm in Illinois that can take care of your daily financial operations. If you cannot afford from the beginning an entire accounting department in the firm, you can choose the services of an accounting firm in USA, including in Illinois. Such a firm can be in charge of the taxes in the firm, payroll, bookkeeping, expenses records, annual financial statements and many more. It is a lot easier to have an accounting firm to be responsible for the financial affairs in the company, and that because the owners can focus better on future investments and the ways in which the company can grow. Here is why it is so important to pay attention to the accounting matters for your business in Illinois:
- A reliable accounting is key to properly running the company in terms of budget and company growth. A better idea of the business is given by the records if properly registered.
- An accountant can properly track the expenses in the firm and comply with the tax requirements.
- Smart business decisions rely on accurate accounting information in the company which includes regular analysis of the financial reports.
- Funding and loans are important to small and medium companies, and concrete financial data is helpful in the firm.
Let us remind you that you can get in touch with our accounting firm in Illinois and plan your business in an accurate and ideal manner, as soon as you start the business.
Special licenses and permits for your business in Illinois
It is a known fact that a business cannot run without the proper licenses and permits. In Illinois, you will have to align with the state, federal and local licenses, and permits, depending on the activities you want to establish in this state. As an example in this sense, if you want to open a restaurant in Illinois, you will have to obtain the signage and the building permits, plus the water permits, alongside food and beverage licenses.
Insurance for companies in Illinois
If you are ready to set up a company in USA, especially in Illinois, you should pay attention to the ways in which you can sign insurance for the business. As an example, the general liability insurance is the most recommended for small and medium businesses in Illinois because it can protect your company from most of the risks that might occur. A general liability insurance covers risks from property damage, or bodily injury, accidents, personal liabilities, legal defense, and judgment. As for the risks which are not covered by the general liability insurance, we mention the damages to customers from professional services, warranties offered by your company, storm or fire damages to personal commercial properties and auto insurance for operated vehicles in the firm. In terms of advantages, it is a known fact that a general liability insurance is not only recommended but it demonstrates that you are completely aware of the necessity of being secured on the business market and skip all the risks that might intervene at a certain point. Moreover, there are customers who feel safe if they know your company is backed up, allowing them to believe in your business from this point of view. This can be a big plus in front of competitors who do not want to get business insurance. It is good to know that a general liability insurance in Illinois covers most of the risks and has low prices: between $300 and $ 1,000 per year, depending on the coverage needs in the firm.
If you want to start a company in USA, and especially if you decide to hire personnel for your enterprise in Illinois, it is recommended to align with the legislation in this matter and keep in mind the following responsibilities:
- confirm that the future employees are qualified to work in USA and particularly in Illinois;
- register each new worker with the representative authorities;
- pay the related taxes for employment;
- respect the rights of the employees as mentioned in the work contract (payment, holidays).
For further explanations in this matter, we suggest you address to our company formation consultants in USA.
Short economy overview
According to statistics, Illinois represents a powerful state due to a high level of economic productivity among the other states of USA. Springfield (the capital of Illinois), Chicago, Peoria, Arlington, Crystal Lake, and Champaign are the representative cities of Illinois and proper business destinations for foreigners. The agriculture and the manufacturing sectors are the strong engines of the economy in Illinois, the state being recognized for the large soybean and corn production in USA. Here are a few statistics to consider when deciding on business in Illinois:
- The unemployment rate in 2018 was down to 4.8% from 5.2%.
- There are more than 350,000 of employees in the health care system in Illinois.
- A total of approximately 1,219,000 firms are registered in Illinois in sectors like transportation, accommodation, retail, construction, mining, agriculture, utilizes, etc.
- The finance and insurance companies in Illinois are above 42,000.
It is good to know that foreign investors can benefit from an experienced workforce in Illinois, in most of the sectors of interest.
If you start a company in USA and you need complete information about incorporation, we invite you to contact our team of company formation representatives in USA.