Yorkville Small Business Attorneys: LLC Formation Attorneys for Start-Ups and Business Owners

 Posted on March 27, 2023 in Asset Protection & Wealth Preservation

LLCs and Series LLCs

An LLC, or limited liability company, is owned by one or more members. Forming an LLC provides a variety of benefits, including the following:

• Limited Liability for Managers and Members (owners)

Simply put, this means that members are not personally liable. Additionally, forming an LLC prevents double taxation, which is common among other corporations such as C corporations. A Series LLC is a type of LLC that offers asset protection across all "series" within the LLC. Each series is protected from any liability that may arise from any of the other series. A holding company, on the other hand, is a company that segregates assets and minimizes weaknesses. Holding companies are used for oversight, supervision, and control of subsidiaries but not for day-to-day decisions.

To create a series LLC in Illinois, the parent company's full name must be included in each series' name. In addition, each series is required to have a registered agent who must be a resident of Illinois. Here at Gateville Law Firm, we provide registered agent services. After selecting an agent, the LLC must file the Articles of Organizations and Certificates of Designation. An operating agreement will then be made, outlining the LLC's ownership, structure, and operations. Finally, an Employer Identification Number (EIN) will be obtained, which is required to open a bank account for tax purposes. Finally, the parent company must file an annual report with the Secretary of State on behalf of the series.

In the example of Example Company, LLC, the “parent” company is Example Company, LLC with Example Company, LLC-Elwood; Example Company, LLC-Lockport, and Example Company, LLC-Joliet being part of the Series LLC. Each of those series is individually responsible for its debts and liabilities.

Business Structuring Planning 

Business structure planning is critical for a start-up company. Often, small businesses and businesses fail because of the mistakes made during the first two years of business. Proper business structure can limit the consequences of bad decisions during the beginning years. Correct accounting and tax procedures are also vital because accounting issues are complex, and federal and state debt issues cause significant headaches for start-ups and other businesses. Whether it is payroll or sales, tax concerns, or tax-related other problems can cause substantial oversight by the IRS and Illinois Department of Revenue. Business structure advice and planning also will help limit business losses and creditor concerns. Creditors' rights attorneys find angles to penetrate a failed business owner’s personal and family finances, which causes considerable financial distress and marriage problems.

Yorkville Start-Up Attorney: Guiding Business Owners on their Choice of Business Entity and Small Business Legal Issues

A start-up business will have various legal needs, such as contract drafting, business formation advice, and simple business advice in making critical decisions. Multi-owner companies are especially encouraged to seek legal counsel to minimize disputes and litigation between and among the owners. Furthermore, business estate planning issues significantly affect business operations and small businesses because death or incapacity can create significant challenges. Call Gateville Law Firm at 630-780-1034 to discuss your start-up and business legal considerations.