Considerations When Starting a Business
It’s part of the American dream – launching and running a successful business. Each year, thousands of people in Illinois start a business with varying degrees of success.
Planning is critical. Part of the preparation stage is knowing how local, state and federal laws will impact the business.
There are four basic types of business organization:
- Sole proprietorship
- Limited liability
When determining the most appropriate type of organization for your business, consideration should be given to tax concerns, organizational expenses, control of the business, expansion of the business, and personal liability.
As part of the start-up activity, the business needs a name. Legally, business can be conducted under the owner’s name, the names of the partners or under an assumed name. An attorney can advise whether the chosen name must be registered with the city, county or state government.
Do not select a name that is deceptively similar to the name of another business or legal action may be taken. Protection for the exclusive use of the business name may be obtained.
Also consider whether a license is needed to operate the business. A license must be obtained from the state and sometimes locally for certain businesses, such as retail and service establishments, beauty shops, private employment agencies, and small loan companies, to name a few. If the business is home-based, other restrictions may apply.
Good professional advice can make the difference between success and failure. A lawyer can help you choose the type of business organization that is suitable; advise as to local, state and federal regulations that affect the business; obtain licenses and permits; prepare or review contracts; resolve tax questions; assist in obtaining financing and give practical advice on many business problems. The owner’s will or estate plan should be revised by a lawyer to include the new business interests.
Note: This information was prepared as a public service by the Illinois State Bar Association. Every effort has been made to provide accurate information at the time of publication. For the most current information, please consult your lawyer. If you need a lawyer and do not have one, visit our lawyer referral page.
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