Selecting The Ideal Business Structure: A Startup Guide For Illinois Entrepreneurs

In this article, you can discover…

• The differences between an LLC and a corporation.
• The costs of beginning different types of businesses.
• How the size and nature of your business can influence structure.

How Does An LLC Differ From A Corporation?

Corporations are initiated by the filing of Articles of Incorporation with the Secretary of State, and there are numerous technical formalities that corporations must follow in order to be truly, legally incorporated.

LLCs offer, in many cases, much of the same liability protections, but the formalities are fewer. They’re generally easier and less expensive to set up. Finally, these two types of businesses may differ significantly in how they are taxed.

Both corporations and LLCs have their advantages and disadvantages, and we’ll consult with you in each case to determine which business type works best for your particular situation and business goals.

What Are The Benefits Of Choosing A Sole Proprietorship?

Very few, if any. A sole proprietorship is often established by people running very small businesses out of their homes. This means that you, as an individual, are responsible for the liabilities of the business and for any debts of that business. In a sole proprietor, there is no “company” as a buffer, its just you.

A sole proprietorship also means that your personal assets may be used in the event of your being sued, making it an unwise choice for most entrepreneurs.

What Are The Costs Associated With Forming Each Type Of Business Structure?

While costs vary, LLCs are generally more economical to set up than corporations, simply due to the more elaborate formalities of corporations and the fees involved.

However, establishing any business the right way takes planning and investment, and a business attorney can help you better understand immediate and future expenses related to setting up your business.

Attorney Craig Donnelly is a dedicated, seasoned business lawyer serving Illinois. For 20 years, he’s helped clients just like you determine the best business structure for their needs and better understand the road ahead.

Have questions about which business structure is right for you? Reach out to Donnelly Law at (630) 608-2124 for a free initial consultation today!

How Does The Size And Nature Of My Business Influence The Choice Of Structure?

Generally speaking, certain types of business ventures lend themselves more toward a corporation than others. For example, if your business anticipates taking on outside financing through investors, the formation of a corporation may be more appropriate, although LLCs may also work well. As is the case with so many considerations, it depends on the specific circumstances

Many other business structures lend themselves more to an LLC, given the lack of formalities and more flexibility in how the company is organized, managed and financed. Allowing a seasoned attorney to review your business plans can help you get a better sense of which business structure might be right for you.

How Do Ownership And Management Differ Among Business Structures?

Corporations have “shareholders” and limited liability companies have “members”. Corporations have “officers”, limited liability companies have “managers”.

The practical effects are very similar, but the technical language and the responsibilities and duties vary depending on the entity that is chosen. And that is, again, another factor that we consider on a case by case basis when advising you on the best structure to pursue.

For more information on Selecting The Ideal Business Structure, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (630) 608-2124 today.