Friday, August 28, 2009

5 Reasons To Form A Business as an LLC - Part 1

One of the first decisions to make when starting a business is what legal form it should take. In Illinois, businesses can be formed in a variety of manners, each with its own pros and cons. They can range from the simple sole proprietorship all the way up to very complicated publicly traded corporations. For small businesses just starting out Ross Law Office generally recommends forming as a limited liability company (“LLC”). Of course, all situations are different, and an attorney should be contacted to discuss the exact nature of the business being contemplated, but as a general matter, LLCs share many of the positives of other types of entities while limiting to a great extent their negatives. The next several posts will outline 5 reasons we think LLCs are beneficial for small businesses in Illinois:

Reason #1: Formation is quick and simple. While it is required to file Articles of Organization with the Illinois Secretary of State, the process is relatively painless. The owner of the business will need to have a number of questions answered prior to organizing, including who the registered agent will be, whether the business will be “member managed” or “manager managed,” and addresses for the agent, the organizer, and the members/managers. The cost is $500.00 and there is an additional $100.00 fee for expedited filing. It is highly recommended that, in LLCs with 2 or more members, an operating agreement is agreed to by all the members; furthermore, additional organizational paperwork is recommended, but the only step necessary to actually form the company is to file the Articles of Organization.

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