Form a Legal Structure
The legal structure of a business outlines ownership of the company, who holds liability for the company, partner roles, and how taxes are paid.
It is recommended that you consult with an attorney when considering which legal structure works best for you.
Legal structures in Illinois:
- Sole Proprietorship – one person is owner and manager.
- General Partnership – an association of two or more individual co-owners.
- Limited Partnership – a general partner manages the business, with limited partners acting as investors that hold limited liability.
- Limited Liability Company – a non-corporate business format allowing limited tax liability of owners. Learn about the difference between an LLC and a low-profit LLC.
- Limited Liability Partnership – an association of two or more managing partners, with two or more limited partners acting as investors who have limited liability in the company.
- "C" Corporation – a corporation that is taxed separately from its owners and can sell shares of stock. Shareholders elect a board of directors, which elect a company president and company officers.
- "S" Corporation – a corporation that passes through income and expenses to its shareholders. This type of corporation is allowed to have a maximum number of 100 shareholders.
Learn more about each type at https://www.illinois.gov/dceo/SmallBizAssistance/BeginHere/Pages/StepByStepGuide.aspx
Watch John Deere Financial explain the very basics:
For information on filing fees, visit the Illinois Department of Revenue Business Registration website.
Not sure what Illinois government department you need? Try https://www2.illinois.gov/business
Check out this nationwide tool: www.bizfilings.com/toolkit
Read a transcript of the SCORE podcast on franchising at https://www.score.org/resource/podcast-franchising.
Get an EIN and an IBT
A Federal Tax ID number is known as an EIN, or an Employer Identification Number. This number will identify your business at the federal level. The business should be legally formed by the time you apply for an EIN. If a business fails to file a federal tax return three years in a row, the EIN is automatically revoked.
Visit www.irs.gov and click on file. Then, click on business and self-employed Tax Center. Next, under “most popular”, select Employer ID Numbers (EINs) to check if you need one. Then, follow the online application process.
Or, print and fill out the paper form and mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Central Registration Division
Illinois Department of Revenue
P.O. Box 19030
Springfield, IL 62794-9030
Once your business is registered with the federal government and with the state, you are ready to register your business with the county.
If your business is a sole partnership or general partnership, you will need to register your business name with Lake County.
Limited Partnerships, Limited Liability Companies, and Corporations file with the State of Illinois and not the County.
A new business within the City of Lake Forest could be subject to certain zoning requirements if it has a physical location, or if customers will be traveling in and out of a place of residence.
The Zoning Compliance Application may be printed, filled out and submitted to the City of Lake Forest Community Development Department.
View their hours and contact information or additional information on having a business in the City of Lake Forest.