Many entrepreneurs are interested in LLC formation because of the tax benefits and the asset protection they provide. But before you file your LLC, there's a lot about the formation process and time frames that you need to know. In this guide, you'll learn about the economic state of Illinois, as well as how to form an LLC there, and the time frame for LLC formation in the state. <\/p>\n\n\n\n
The state\u2019s nickname, \u201cThe Prairie State\u201d, gives you a great idea of what you can expect in most of the state. The majority of the state is part of the Central Plains region, which consists of quite fertile soil. As a matter of fact, the southern tip of the state is home to the Gulf Coastal Plain, which people refer to as \u201cEgypt\u201d due to the fact that it resembles the fertile land of the Nile delta in Egypt. Its natural resource is its soil and the crops that are grown in it, like apples, corn and soybeans.<\/p>\n\n\n\n
The GSP, or Gross State Product, of Illinois is $800.4 billion, and that has a growth rate of 23.9k% between 2018 and 2023. The industries that make the most money in Illinois are Drug, Cosmetic & Toiletry Wholesaling, Property, Casualty and Direct Insurance, Gasoline & Petroleum Wholesaling, Commercial Banking, and Hospitals. The companies that employ the most people in the state are the State of Illinois, Walmart Inc., the City of Chicago, Amazon.Com, Inc., and Cook County. And the sectors that play the biggest roles in the state\u2019s GSP are Manufacturing, Real Estate and Rental and Leasing, Professional, Scientific and Technical Services, Finance and Insurance, and Wholesale Trade.<\/p>\n\n\n\n
<\/p>\n\n\n\n
According to Usnews.com, the economy in Illinois ranks #39 in the country, its business environment is #26, and growth is #40. That checks out because job growth in the state is -0.6%, while the national statistic is 0.2%, and net migration to the state is 0.6%, while it\u2019s 0.1% on the national level. <\/p>\n\n\n\n
It comes in at #35 in affordability and #29 in economic opportunity. This is because while the median household income is $72,205 which is slightly higher than the national average of $69,717, the cost of living index is 101.4 which is over the national statistic of 100. So while the median household income is higher than average, so is the cost of living, which brings that down a tick. <\/p>\n\n\n\n
The fiscal stability of the state got an abysmal #50 ranking, overall, long-term and short-term all three. It\u2019s long been known that Illinois has its share of fiscal troubles and that\u2019s reflected in the business community. The governor recently predicted that the state would soon have a surplus of $1.7 billion, and it\u2019s got a BBB+ bond rating. But prior to that, bonds in the state were ranked with the lowest possible investment grade. Also, the budget hasn\u2019t been balanced since 2001, so a surplus would be good, but it\u2019s no wonder that people are skeptical about doing business in the state.<\/p>\n\n\n\n
There are a few laws and incentives in place in Illinois that are designed to help new business owners.<\/p>\n\n\n\n
Small Business Job Creation Tax Credit: <\/strong>This is a tax credit offered to small businesses for creating jobs in the state. Small businesses that have 50 or less employees, as well as those that draw employees from the \u201cPut Illinois to Work\u201d program, and small businesses seeking to expand their employment qualify for the credit.<\/p>\n\n\n\n One benefit of doing business in Illinois is that it\u2019s home to a lot of big cities. Chicago itself has 2.7 million people, and it\u2019s part of the 3rd-biggest metropolitan areas in the nation. And if you count the surrounding areas and suburbs, that brings the population count of Chicagoland all the way up to 9.5 million. Large markets are a boon to any business because they not only provide thousands of customers, but also a large pool of potential employees. <\/p>\n\n\n\n Because of its large population, Illinois has a big market full of skilled workers, and they have a diverse range of skills. You\u2019re more likely to find people with obscure skill sets in this large market than you would be in a scant market. And they have a slightly-higher-than-average unemployment rate, which means there are a lot of people looking for work and available to work for your company. <\/p>\n\n\n\n There are lots of companies headquartered in Illinois, like Boeing, Walgreens, Kraft Heinz and Allstate. These big companies will give your startup a bit of legitimacy. If you can\u2019t say \u201clook we\u2019ve got Boeing and Allstate in our state and they\u2019re thriving\u201d then investors and financial institutions won\u2019t be as confident in providing you with capital. <\/p>\n\n\n\n The state recently legalized gambling and cannabis, which has bolstered the economy and made the state seem a little more trendy and innovative, making investors consider backing some of the new businesses in these industries, as well as others (like technology).<\/p>\n\n\n\n There are downsides, as well. <\/p>\n\n\n\n Illinois isn\u2019t going to shake its reputation of being a state with big financial problems for a long time. They\u2019ve previously had things like billion-dollar deficits, and shut down a lot of government-funded programs and services. And throughout the 2010\u2019s the state government couldn\u2019t find solutions to these issues, so the state\u2019s credit rating took a tumble. It\u2019s understandable that people are weary of doing business here, or investing in a business in the state. <\/p>\n\n\n\n Personal income tax rates in Illinois are great, coming in at a low 4.95%. So if your LLC is taxed as a pass-through business entity, this means you\u2019ll enjoy low tax rates. Unfortunately, if it\u2019s taxed as a corporation, then you\u2019ll have to deal with a sky-high corporate tax rate of 9.5%. Furthermore, their sales taxes are 6.25%, and some local areas have started adding sales taxes too, driving that figure even higher. And the state\u2019s Tax Freedom Day is April 24th, which means that Illinois taxpayers don\u2019t earn enough money to pay off their taxes in full as fast as 44 other states.<\/p>\n\n\n\n Before you can really understand the times and estimates involved with forming a Limited Liability Company in Illinois, you should learn about the formation process. In this section, I\u2019ll guide you through LLC formation and all of its steps! <\/p>\n\n\n\nPros and Cons of Establishing an LLC in Illinois<\/h3>\n\n\n\n
Procedure of Establishing an LLC in Illinois<\/h2>\n\n\n\n
\n