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Illinois can be a great state to start a business and 99% of Illinois businesses are small businesses, employing more than 2.5 million employees. The process for starting a business in Illinois depends on the type of business youre creating, but every business will generally have some of the same steps to get started.
Steps to Form an S Corp in Illinois Choose an LLC Name. Youll find when you go to register an LLC one of the first things you need is a name. Choose a Registered Agent. File Your Articles of Organization. Create an Operating Agreement for Your LLC. Get an EIN. File Form 2553 to Elect S Corp Tax Status.
An LLC is a legal entity only and must choose to pay tax either as an S Corp, C Corp, Partnership, or Sole Proprietorship. Therefore, for tax purposes, an LLC can be an S Corp, so there is really no difference.
An Illinois LLC is considered advantageous because it offers the same limited liability as a corporation, but with less formality in its creation and operation.
It is beneficial for an LLC to elect S corp status if it is profitable and its owners are required to pay large amounts of self-employment taxes, such as Social Security and Medicare taxes. As the owner of a single-member LLC with S corp status, you are not regarded as a self-employed person.
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The main difference between an LLC and a corporation is that an llc is owned by one or more individuals, and a corporation is owned by its shareholders. No matter which entity you choose, both entities offer big benefits to your business. Incorporating a business allows you to establish credibility and professionalism.
If you think you can benefit from the combined features of using an LLC to own and operate your small business and then having it be taxed like an S corporation, the possibility exists to establish your business as an LLC, but then make the election to have it treated as an S corporation by the IRS for tax purposes.
For typical LLCs (those not electing to be taxed as corporations) the tax is 1.5% of net income. The tax is payable to the Illinois Department of Revenue (IDOR). Use Form IL-1065 to pay the tax. In some cases, the owners of an LLC choose to have their business treated like a corporation for tax purposes.
A Limited Liability Company (LLC) is an entity created by state statute. Depending on elections made by the LLC and the number of members, the IRS will treat an LLC either as a corporation, partnership, or as part of the owners tax return (a disregarded entity).
Delaware is the most popular state to file an LLC in because it has a strong reputation for being business-friendly and offers a fast filing process with increased protection for owners. Wyoming offers low fees and great tax benefits for people looking to start an LLC.

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