Illinois License Services, Inc
800 Ravinia Pl 
Orland Park IL. 60462

(708) 675-1606

 

Corporation & Businese License

Incorporation
 


Illinois License Services, Inc
 
can help
Owning your own business  and set your dream into motion. We're experts at incorporation in Illinois and other states.



Legal Benefits:
  • Transferable ownership. Ownership in a corporation or LLC is easily transferable to others, either in whole or in part. Some states' laws are particularly attractive to this end. For example, with a Delaware Corporation, the transfer of ownership in a corporation is not required to be filed or recorded.
  •  Retirement funds. Retirement funds and qualified retirements plans, such as a 401(k), may be established more easily.

  • Taxation. In the United States, corporations are taxed at a lower rate than individuals. Also, they can own shares in other corporations and receive corporate dividends 80% tax-free. There are no limits on the amount of losses a corporation may carry forward to subsequent tax years. A sole proprietorship, on the other hand, cannot claim a capital loss greater than $3,000 unless the owner has offsetting capital gains.

  • Raising funds through sale of stock. Capital from investors can be raised for corporations easily through the sale of stock. 

  •  Durability. A corporation is capable of continuing indefinitely. Its existence is not affected by the death of shareholders, directors, or officers of the corporation. 

  • Credit rating. Regardless of an owner's personal credit scores, corporations acquire their own credit rating, and build a separate credit history by applying for and using corporate.

 


Corporation Package
  •  Articles of Incorporation

  • Secretary of State Filing Fees  (expediting Service)

  • Preliminary Name Search

  • Federal identification Number

  • S-corp election for small business.

  • Set up minutes including First Meeting of Incorporators, First Meeting of Directors and First Meeting of shareholders

  • By-Laws

  • Corporation Sales & Book

  • Tips for your new Corporation



Corporation Types:

C-Corporation:

"C" corporation stands for the way in which your corporation will be taxed by the IRS. There is a corporate income tax on the profits of a "C" corporation. And, in addition, if a dividend is paid to the stockholders from the corporation's retained earnings, the dividend must be included on the stockholders personal tax return. Therefore, the profits of a "C" corporation are subject to possible double taxation. The corporation you form will be taxed as a "C" corporation this year unless you file IRS form 2553 to elect tax status as a "S" corporation.

A C corporation may have an unlimited number of owners. A C corporation (unlike an S corporation) is not restricted as to the types of eligible shareholders. Thus, the shareholders can include individuals, other corporations, trusts, partnerships, LLCs, and other entities.

S-corporation:S-corporation  small business

IRS form 2553 must be filed within 60 days of incorporation to be treated as a "S" corporation for tax purposes.

In general, S Corporations do not pay any federal income taxes. Instead, the corporation's income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns. This concept is called single taxation; if the corporation is taxed as a C Corporation, it will face double taxation, meaning both the corporation's profits, and the shareholders' dividends, will be taxed.

IRS form 2553 must be filed within 60 days of incorporation to be treated as a "S" corporation for tax purposes.

Qualification for S corporation status

In order to make an election to be treated as an S corporation, the following requirements must be met:

Eligible entity as a domestic corporation, or a limited liability company.

Have only one class of stock.

Have less than 100 shareholders.

Spouses are automatically treated as a single shareholder. Families, defined as individuals descended from a common ancestor, plus spouses and former spouses of either the common ancestor or anyone lineally descended from that person, are considered a single shareholder as long as any family member elects such treatment

Shareholders must be U.S. citizens or residents, and must be natural persons, so corporate shareholders and partnerships are generally excluded. However, certain trusts, estates, and tax-exempt corporations, notably  corporations, are permitted to be shareholders

Profits and losses must be allocated to shareholders proportionately to each one's interest in the business.

 

limited liability company (LLC)

A limited liability company (LLC) is a flexible form of business enterprise that blends elements of partnership and corporate structures. It is a legal form of Business. An LLC, although a business entity, is a type of unincorporated association and is not a corporation. The primary characteristic an LLC shares with a corporation is limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation. It is often more flexible than a corporation and it is well-suited for companies with a single owner.

It is important to understand that limited liability does not imply owners are always fully protected from personal liabilities. Courts can and do pierce the corporate veil of LLCs when some type of fraud or misrepresentation is involved, or under certain situations where the owner uses the company as an "alter ego.

Advantages

  • An LLC can elect to be taxed as a sole proprietor, partnership, S corporation or C corporation
  • The owners of the LLC, called "members," are protected from some or all liability for acts and debts of the LLC depending on state shield laws.
  • Much less administrative paperwork and record keeping than a corporation.
  • Has no double taxation, unless the LLC elects to be taxed as a C corporation.
  • Using default tax classification, profits are taxed personally at the member level, not at the LLC level.
  • LLCs in most states are treated as entities separate from their members, whereas in other jurisdictions case law has developed deciding LLCs are not considered to have separate legal standing from their members

  

 Professional Corporation:

Groups of certain professionals can form corporations known as professional corporations or professional service corporations (“PC”). The list of professionals covered by professional corporation status differs from state to state; though it typically covers accountants, engineers, physicians and other health care professionals, lawyers, psychologists, social workers, and veterinarians. Typically, these professionals must be organized for the sole purpose of providing a professional service (for example, a law corporation must be made up of licensed attorneys). A professional corporation offers many of the limited liability and taxation benefits offered by a traditional corporation.

Professional corporations can shield owners from liability. While it can't protect a professional from his/her own malpractice liability, it can protect against liability from negligence of an associate and this is the primary reason professionals form these type of corporations.

Non-Profit CorporationNon-profit corporation

Nonprofit Corporations are formed in order to conduct activities and transactions for purposes other than shareholder financial gain, while at the same time providing the same asset protections and limited liabilities of a standard corporation. A nonprofit corporation can make a profit, but this profit must be used strictly to forward the goals rather than to provide earned income (in the form of dividends) to its shareholders. It is understood that most of the transactions and activities of a Nonprofit Corporation will not be commercial in nature.

The Major Difference between Nonprofit and For-Profit Organizations

Most experts consider that it is the legal and ethical restrictions on the distribution of profits to owners or shareholders which fundamentally distinguishes nonprofits from “for-profit", or commercial enterprises. A more precise term to describe most nonprofit organizations is 'not-for-profit', rather than 'nonprofit', and this is often used in legislation and texts.

Nonprofit corporations generally do not operate to generate profit, a defining characteristic of such organizations. However, a nonprofit organization may accept, hold and disburse money and other things of value, and it may also legally and ethically trade at a profit, provided that the proviso that any profit generated will be used to further its cause, goal or mission is adhered to. The extent to which it can generate income may be constrained, or the use of those profits may be restricted. Nonprofits therefore are typically funded by donations from the private or public sector, and often have tax exempt status. Private donations may sometimes be tax deductible.  

Advantages of an LLC Advantages of a Corporation
  • no limit on the number of owners
  • profit and loss are passed through to the owners' individual tax returns
  • no annual meeting or minute book requirements
  • may issue shares of stock to attract investors
  • corporate income splitting may help lower overall tax liability
Disadvantages of an LLC Disadvantages of a Corporation
  • cannot engage in corporate income splitting to lower tax liability
  • cannot issue stock
  • double taxation of corporate profits and shareholder dividends
  • must hold annual meetings and record minutes
  • s corporations have restrictions on number of owners

 

 

 

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