How should you name your LLC? You might have your heart set on a name, but there are important things to consider first. You’ll want to ensure that it follows state rules and isn’t too close to an existing business’s name.
The rules for naming your company in Peoria, IL are fairly simple according to Section 1-10 of the Illinois Business Organizations Code.
Your Illinois LLC name must end with one of the following:
If you are forming the LLC for a low-profit charitable or educational purpose under section 1-26, you must have the term “L3C” in your LLC’s name. And if your LLC works with trusts, the law requires that you have the word “trust” in the name.
Current Illinois regulations do not let you use only the words “limited” or “company” by themselves to identify an LLC.
Your LLC name must be unique and easily distinguishable from other Illinois businesses. You also want to avoid confusing the public with a name similar to that of another business. The Secretary of State’s office will still have the final say over whether the name is okay.
Let’s say you have your heart set on the name “Peoria Air Conditioner Repair, LLC,” but after a search, you find another Illinois corporation named “Peoria Air Conditioner Repair, Inc.” The names are too similar even though “Inc.” is a different kind of company.
If you make a simple change to your name such as “Peoria Air Conditioner Service, LLC,” you should be okay.
Whatever name you choose shouldn’t be misleading to the public. This includes using another company’s name or choosing a name that would cause people to confuse it with government entities.
Your company’s name cannot contain the following words unless it has permission to do so under the Illinois Corporate Fiduciary Act:
If your business name implies that you carry any form of professional license, at least one of your members must have that valid license issued by an appropriate government agency.
For example, if your business is named “Peoria Private Investigations, LLC,” you’ll need to hold a valid Illinois Private Investigator License.
Before filing your paperwork, check to see if your name is available in Illinois. You can perform a search for the name on the Illinois Corporate & Limited Liability Company Name Search page.
After naming your company, it’s also legal in Illinois to apply to do business under an assumed name or “DBA,” but more on that later in this article.
What is a registered agent? A registered agent is an individual or company that receives service of process, legal documents, and official notices on your business’s behalf.
Service of process is a legal term for business letters or legal papers. Your agent is the gatekeeper between you, the state, and the public. If a lawsuit is filed against your company, your registered agent will receive the relevant documents.
Illinois state law requires that you appoint a registered agent and provide their details at the time of filing your articles of organization. Illinois’s rules for naming and changing registered agents are in Section 1-35 of the Limited Liability Company Act.
Registered agents must meet the following requirements:
A registered agent must also respond quickly in the event of a lawsuit so that your business avoids missed deadlines, fines, or penalties for non-compliance.
Some business owners choose to designate themselves as registered agents because:
However, there are several downsides to this:
For these reasons, most experienced business owners hire companies to act as their registered agents. These services cost between $100 and $150 per year. If you choose to use a law firm, you could spend up to $500 per year.
If you choose to start your LLC by using a business formation company, they often include a registered agent service in their packages. Feel free to take a look at our registered agent recommendations article for more information.
What are Articles of Organization? These documents turn your business idea into an actual legal entity ready to sign contracts and do business. Illinois law states that filing the articles of organization makes it official.
To file, you’ll need the following basic information as listed in Section 5-5 of the Limited Liability Company Act:
If this feels overwhelming, you can simply use the online form provided by the Secretary of State (form LLC-5.5(S)) as a go-by.
The filing fee for your articles of organization is $150.
Average processing times are estimated to be between 5-10 business days for online filing. If you decide to mail in your forms you can expect extra time.
If you need your articles processed sooner, the Illinois Secretary of State does offer expedited processing. For $250, your articles will be processed within 24 business hours of receipt by the office.
To save time and avoid the hassle of LLC filings, all seasoned entrepreneurs use LLC formation services. For recommendations, check out our article on the best LLC services.
What is an operating agreement? An operating agreement is a contract between you and other members of your LLC. It outlines the rules by which your company does business, keeps you prepared for everyday situations, and protects against the unexpected.
Your operating agreement should list each member of the company and how they’re expected to work. It can be as simple or detailed as you’d like to make it.
Although not required by Illinois LLC law, we strongly urge you to consider one. Without an operating agreement, state law acts as a fallback. Remember that state laws don’t always work in favor of the business owner.
The benefits of having an operating agreement include:
Several strict limits on the power of the agreement to change the law are listed in Section 15-5(b). When you are drafting an operating agreement for your company, you should consult a professional to ensure your company’s best interests are minded.
When it comes to hiring, firing, and everything in between, an operating agreement allows you to customize the rules of the LLC according to your expectations. They should be signed by every member and kept somewhere safe.
Many of the best LLC formation services provide operating agreement templates for as low as $50, and we highly recommend them.
What is an EIN? Employer Identification Numbers are tax identification numbers assigned to businesses by the Internal Revenue Service. They function much like social security numbers, but for businesses instead of individuals. They allow the IRS to keep track of all the companies and other business entities that pay taxes.
Here are the most common cases in which your business will need an EIN:
With that in mind, we highly recommend getting an EIN even if they’re not required for your business. Most banks and online payment services require them to open a business bank account.
Filing for an EIN is easy and can be done in just a few minutes on the IRS website. Alternatively, you can also file via mail or fax.
Obtaining an EIN is always free of charge and shouldn’t be paid for unless part of a larger LLC formation package.
Read More: How to get an Employer Identification Number in Illinois
Certain types of businesses require professional licensing, such as doctors, lawyers, and private investigators, just to name a few.
Check with the Illinois Department of Financial and Professional Regulation if you have questions about any licensing requirements for your business.
In Illinois, your articles of organization serve as the license or permit at the state level. No other documentation is required.
Currently the City of Peoria has no standard business license, however, the city does license specific businesses and occupational types. Check this list of permits administered by the Peoria Accounts Receivable Office for details.
Remember that your business may need specific licenses or permits. Contact the City of Peoria if you have any questions.
As the principal city in the Peoria Metropolitan Area, Peoria offers plenty of support for your small business. Here are just a few local Peoria organizations that can help:
Now that you’ve made it official and formed your Peoria, IL LLC, there are a few more easy steps to follow to complete the setup and protect your new business.
There are several advantages to buying a matching domain, even if you don’t plan on building a website just yet.
Competitors can easily buy your domain and its variations to keep you from using them.
There are also people who intentionally search public records to find newly registered LLCs to buy and resell them at a higher price.
A domain name from a provider like GoDaddy.com will cost you around $20 to $50 per year. These hosts offer regular specials and discounts that help you save money even if a website isn’t in your immediate future.
Illinois allows you to do business under an assumed name (also known as a DBA). This means you can operate under a name different from the business’s legal name. It can also help distinguish your company from other similarly named businesses.
For example, your LLC’s legal name is “John’s Air Conditioner Service, LLC” but you want customers to know you as “Peoria AC Service,” “Peoria 24/7 Air Conditioner Repair,” or anything other than “John’s Air Conditioner Service.”
Section 1-20 of the Illinois Limited Liability Company Act gives rules for using a DBA in Illinois. DBAs require an application to the Secretary of State with the following information:
Illinois DBAs are good for five years at most. The exact expiration date will depend on the month that you filed your articles of organization.
The application to obtain a DBA should be made on form LLC-1.20. An Illinois DBA costs $30 per year and is renewed every five years.
Anyone conducting business under an assumed name in Illinois must register in the Office of the County Clerk in the county where they are to conduct or transact the business.
The State mandated fee for filing the certificate is $5. You may pay with cash, check, debit card, or credit card.
The information on the certificate must be published in a newspaper within Peoria County. The first publication must be within 15 days after the certificate is filed in the office of the County Clerk.
Keeping your business compliant is vital to avoid fines, penalties, or state sanctions. You’ve come too far to let compliance issues shut you down.
Limited Liability Company Act 50-1 requires your LLC to file a yearly report with the Secretary of State. This report must include:
The report should be filed within 60 days before your LLC’s “anniversary month,” as described above. If you file the report on time, the filing fee is $75. An LLC that files a late report will also be charged a penalty of at least $100.
Section 1-40 of the Limited Liability Company Act also requires your LLC to keep these records available at its principal place of business:
The State of Illinois does not tax your LLC directly. Instead, it taxes income on members’ personal tax returns.
Illinois may impose a personal property replacement tax on LLCs treated as pass-through corporations. For more information, consult with the Illinois Department of Revenue.
Most importantly, having an LLC will ensure your personal assets are protected if your business cannot pay its debts. Running your business through an LLC can also provide you with better tax treatment. In addition, LLCs have fewer and less complicated reporting requirements compared to other types of businesses, making them particularly suitable for smaller businesses.
It is not strictly necessary to form an LLC in order to start a business. You can engage in business as a sole proprietorship instead. However, in that case, your personal assets may be at risk if your business takes on too much debt or loses a lawsuit in court.
It doesn’t cost much to set up an LLC for your business. In most states, you will need to pay less than $150 to register your new LLC with the local state authorities. In some states, you may need to pay some additional costs later on, for example, when filing an annual report or filing for a DBA.
The time it takes to have your LLC approved can vary wildly depending on the state, the filing method you used and if you opted for expedited filing. In some states, you can have your LLC approved in as little as one day, while in others, it may take weeks or even months.
If you want the fastest possible turnaround time, you should consider using online filing and pay for expedited service, if available.
The IRS and most state tax authorities treat LLCs as “pass-through” entities. This means that your LLC does not pay taxes directly (as corporations do). Instead, the tax burden is passed through to the members of your LLC. The members will then include profits and losses from the LLC’s business on their personal income tax returns.
It is generally best to form your LLC in your home state, where you will actually carry out your business. Some people believe that it is advantageous to form your LLC in Delaware or Nevada. In reality, you would then have to register with the authorities in your home state as a foreign LLC and pay additional fees – without much benefit in return.
You are not generally required to file for a DBA (“Doing-Business-As”). However, most business owners choose to do so anyway. Getting a DBA will allow you to omit the letters LLC from your customer-facing business name. You can also have multiple names for your LLC if you want to run more than one business through your LLC.
Yes, you can form an LLC for your business in any US state. There is no requirement for you to be a US citizen in order to form an LLC, nor do you need the right to reside in the US. If your business is going to own physical property in a given state, you may want to form your LLC in that state.
No, you don’t need to hire an attorney to form an LLC for you. It is generally much cheaper and straightforward to file the necessary paperwork yourself or to hire an affordable LLC formation service to handle the work on your behalf. However, you may want to consider hiring an attorney if your business is very complex.