Illinois Small Business Law
Deciding to start a small business can often feel like diving into the deep end of the pool. On top of fighting against competitors to stay afloat in your market, you'll also need to account for things like employee benefits, insurance, taxes, codes and regulations and more. A misstep could leave you with expensive legal problems.
For business owners in Joliet, Rockford or Chicago, it's important to understand state and federal laws and know how to proceed when a legal issue develops. LawInfo has the Illinois small business law information you need from buying business insurance to workers' compensation.
Illinois Business Insurance
An inherent risk of owning a business is liability for accidents and mistakes. You or your business could end up responsible for compensating losses from a variety of issues like defective products or the destruction of workplace property. You can significantly reduce that liability using business insurance.
There are many kinds of business insurance policies, each of which can protect your business from specific types of liability. Some of the most common policies include:
- Commercial property—Covers losses resulting from the damage or destruction of business property, including real estate, machinery, documents, income, etc.
- Product liability—Covers losses resulting from personal or property injuries caused by products manufactured, distributed or sold by the liable business.
- Professional liability—Covers losses resulting from business errors, negligence and malpractice.
- General liability—Covers losses resulting from general legal hassles, including personal injury.
Illinois Business Structures
When you start a new small business, you must decide how it will be structured. Business structure is a crucial component to the startup process as it will define ownership, personal liability and responsibilities for you and your co-owners (if any). It will also affect your business's tax qualifications.
Illinois legally recognizes several major types of business structures, including:
- Sole proprietorships—Businesses owned by one person only, who is personally liable for paying taxes and claims against the business.
- General partnerships—Businesses equally owned by two or more people. Every person is equally personally liable.
- Limited partnerships—Businesses owned in a greater share by a general partner and in lesser shares by limited partners. Limited partners have limited liability and no management responsibilities.
- Limited liability partnerships (LLPs)—Similar to limited partnerships but all co-owners are protected from individual liability for another co-owner or employee's negligent acts.
- Limited liability companies (LLCs)—Flexible businesses with multiple co-owners (some of whom can be business entities) that offer limited liability and tax flow-through benefits for all co-owners.
- C corporations—Businesses owned by shareholders who possess limited liability. The business is a legal entity that possesses its own liability.
- S corporations—Similar to C corporations but limited to 100 shareholders and possess special tax considerations. Shareholders enjoy pass-through income and expenses which they must report on personal tax returns.
Can an Illinois Attorney Help My Small Business?
A small business owner should get assistance with legal matters as they can ruin a business if mishandled or ignored. Issues like defending against wrongful termination claims or negotiating the acquisition of another company's assets are complex and time-consuming. Retaining an attorney to help prevent legal problems is a wise move.
Speak to an Experienced Business Law Attorney Today
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified business lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local business attorney to discuss your specific legal situation.