By Kevin Scanlan
Certified SCORE Mentor
It’s the law!
When considering starting a business, there are several laws and regulations of which you need to be aware.
One of the first is the legal structure of the business. Will you be a sole proprietorship, a partnership, a C corporation, an S corporation or a Limited Liability Company (LLC)? There are potential pros and cons to each. To learn more, go to chicago.score.org , click on Take a Workshop and look under the On-Demand Workshops to find Determining Your Company’s Legal Structure. The workshop is free.
Once you have the legal structure, you’ll need to register your business with the State of Illinois, Department of Revenue, using form REG-01, the Illinois Business Registration application. Allow 6 to 8 weeks for processing this application.
You’ll also need to get a business license from the City of Chicago, Department of Business Affairs and Consumer Protection. If your business will not be in Chicago, get a business license from the municipality where your business will be located. Depending on the type of business you plan to operate, you may need more than one license and you may also need one or more certifications. Typically, there will be licensing and registration fees. You can handle these applications yourself, or contract with a service that will handle it for you for an additional fee. SCORE does not provide this service.
If you plan to have employees in your business, you will need to follow regulations. Businesses require a tax-payer ID number, need have the ability to deduct appropriate taxes and social security payments from employee paychecks (there’s software for this or you can hire a bookkeeper or accountant), need to provide worker’s and unemployment insurance coverage, and likely will need some level of liability insurance coverage. There are also several labor laws and regulations related to employees that you need to be aware of and follow.
You’ll also need to track your revenue and expenses monthly. Not only will this help you determine whether your business is profitable, it will give provide information you need to file your taxes. Again, there is software if you want to handle this task, or you can hire a bookkeeper or accountant.
If you’re thinking of starting a business and need some help, I’m happy to assist you. Contact me at firstname.lastname@example.org and I’ll send you the information on how to schedule an appointment with me at the BAPA offices. There is no fee for my services.