1. Local Zoning Laws and Regulations in Illinois
Illinois has 102 counties and 1,300 municipalities. If you are planning to establish a therapy practice, you need to ensure that the local zoning laws permit you to operate in that area, even if it is your own home. In some cases, you may need to apply for a zoning variance if you want to operate a business in an area where it is not typically allowed, such as a home business in a residential area. A zoning variance is an exception to the zoning laws. To determine whether you need to apply for a variance, what types of zoning your town or city recognizes, and what kind of business you can perform there, you should contact your local municipality.
2. Business Name Search in Illinois
If you plan to operate your therapy practice under a name that is different from your own or your partners’ (if you have a general partnership or sole proprietorship), you will need to register an assumed name. Assumed names for sole proprietors and partnerships are registered at the county level, and you should contact your county clerk’s office for more information. Before registering, you must run an announcement of your new name in a newspaper that is published in your county. The county clerk’s office will provide you with a list of eligible newspapers. The newspaper will provide you with an affidavit confirming that your announcement ran, which you will need to provide when you register your name with the county clerk’s office.
3. Business Structure in Illinois
To choose a business structure recognized by the State of Colorado, you need to understand the different entity types recognized by the state. The business structure you choose will affect how your practice’s income is taxed and who may own shares of the practice. In Colorado, you can choose from a variety of business structures, including sole proprietorship, general partnership, LLC, PLLC, corporation, LP, LLP, LLLP, limited partnership association, nonprofit organization, and cooperative. However, before settling on a business structure, it is important to talk to your accountant and, if necessary, a lawyer to help you choose the right one. Each state recognizes and registers different business structures, so it is important to understand the options available in your state.
By default, when you start a business on your own, you are considered a sole proprietor. In this business structure, you and your business are treated as one entity. This means that any profits or losses that your business incurs are considered your personal income or expenses. While a sole proprietorship is the simplest form of business structure, it does not provide any legal or financial protection.
- A general partnership is a business structure in which all partners share equal liability for the company’s legal and financial obligations.
- The LLC business structure is similar to a corporation in terms of liability protection but offers flexibility in terms of tax options. It allows for the election of tax status as either an S corporation or a partnership.
- The PLLC business structure is identical to the LLC, except that all members must be licensed professionals and provide proof of certification. This structure provides additional liability protection for members in case of legal proceedings.
- A corporation is a separate legal entity from its shareholders, who own shares in the company. There are two types of corporations: C corporations and S corporations. C corporations are taxed separately from the shareholders, while S corporations pass on the tax liability to each shareholder.
- A limited partnership offers limited liability protection for some members. At least one person acts as a general partner who is personally liable for the partnership’s debts and legal obligations, while at least one person acts as a limited partner and is only liable for their share of the partnership.
- An LLP is similar to a general partnership but provides extra protection against professional negligence. Any licensed professional may form an LLP, and the structure protects each partner against the outcomes of the other partners’ negligence.
- The LLLP business structure is similar to an LLP but is available to existing limited partnerships.
- A limited partnership association is a new business structure in Colorado that has an indefinite life, unlike a typical partnership that dissolves when a partner leaves or dies. The structure only dissolves when all members vote to dissolve it.
- A cooperative is a legal organization made up of individuals or businesses working together toward a common goal. All members have an equal say in how the cooperative is run, and the focus is not on making a profit but on covering costs. The cooperative structure is meant for multiple individuals and businesses working together to pool resources.
4. Register Your Business in Illinois
To register a business name in Illinois, you can follow the steps outlined below:
- Choose a business name:
Select a unique and distinguishable name for your business. Ensure that the name aligns with your brand and is not already in use by another business in Illinois. Conduct a search on the Illinois Secretary of State’s website or use their online Business Entity Search tool to check the availability of your desired business name.
- Determine your business structure:
Decide on the legal structure for your business, such as a sole proprietorship, partnership, limited liability company (LLC), or corporation. The choice of structure will impact the registration process and your personal liability as a business owner. Consider consulting with an attorney or tax advisor to determine the most suitable structure for your specific circumstances.
- Register your business name:
If you are operating your business under a name other than your own legal name, you need to register a “Doing Business As” (DBA) name, also known as an assumed name or trade name. In Illinois, this process is handled at the county level. Contact the county clerk’s office in the county where your business is located to obtain the necessary DBA registration forms and instructions.
- Complete the registration forms:
Fill out the required registration forms accurately and completely. Provide information about your business name, your personal details, and the nature of your business. Ensure that you follow the specific instructions provided by the county clerk’s office.
- Pay the registration fee:
Pay the required registration fee to the county clerk’s office. The fee amount may vary depending on the county. Contact the county clerk’s office or visit their website to obtain information on the registration fee and acceptable methods of payment.
- Publish a notice (if required):
In some counties in Illinois, you may be required to publish a notice of your DBA registration in a local newspaper. The notice typically needs to be published for a specific period, such as three consecutive weeks. Contact the county clerk’s office to determine if this publication requirement applies to your registration and to obtain the specific guidelines.
- Renew your registration (if necessary):
Be aware of any renewal requirements for your DBA registration. In Illinois, DBA registrations are typically valid for a specific period, such as five years, after which they need to be renewed. Mark your calendar to ensure timely renewal of your registration to maintain your business’s legal standing.
It’s important to note that the registration process may vary slightly depending on the county in Illinois where you are registering your business name. Therefore, it’s recommended to contact the county clerk’s office directly or visit their website to obtain the most accurate and up-to-date information regarding the registration process, fees, and any additional requirements specific to your location.
5. Business Licenses & Permits in Illinois
In order to conduct therapy practice in Illinois , obtaining a business license is mandatory. Additionally, depending on the location of your practice, you may require further permits and licenses. To obtain a comprehensive list of all the essential permits and apply for them electronically, you can use the Business License Wizard.
6. Business Insurance in Illinois
When operating a therapy practice in Illinois, it is important to obtain the appropriate types of business insurance to protect your practice and mitigate potential risks. Here are the recommended types of insurance coverage for therapy practices in Illinois:
- General Liability Insurance:
General liability insurance provides coverage for damages caused to someone else’s property or person. It protects your practice in the event of accidents, injuries, or property damage that may occur on your premises or as a result of your services.
- Commercial Property Insurance:
Commercial property insurance is essential to protect your owned property, including office furniture, computers, and the building where your therapy practice operates. It provides coverage against losses or damages caused by events such as fire, theft, vandalism, or natural disasters.
- Business Income Insurance:
Business income insurance, also known as business interruption insurance, covers loss of income that may occur due to unexpected events such as natural disasters, theft, or property damage. This coverage helps your therapy practice continue to cover expenses and recover financially during the downtime.
- Professional Liability Insurance:
Professional liability insurance, also referred to as malpractice or errors and omissions insurance, is crucial for therapy practices. It provides protection against lawsuits or claims arising from allegations of negligence, malpractice, misdiagnosis, providing inaccurate advice, or mishandling patient records. This coverage is specifically tailored to the risks faced by healthcare professionals.
- Illinois Workers’ Compensation Insurance:
If your therapy practice has employees, it is mandatory in Illinois to have workers’ compensation insurance. This insurance protects your employees in case they suffer work-related injuries or illnesses. It covers medical expenses, lost wages, and rehabilitation costs, while also providing liability protection for the practice against employee claims.
When shopping for insurance, consider exploring a business owner’s policy (BOP). A BOP is a comprehensive insurance package that typically includes general liability, commercial property, and business income coverage. It can be a convenient and cost-effective option for therapy practices, as it combines multiple essential coverages into a single policy.
7. Business Taxes in Illinois
When operating a therapy practice in Illinois, it’s important to understand and fulfill your tax obligations. Here is some accurate information regarding state taxes for businesses in Illinois:
- State Tax Obligations: All businesses earning income in Illinois are required to pay state taxes. This applies to therapy practices as well. The tax amount you owe will depend on the income generated by your practice. It’s crucial to accurately report your earnings and comply with the state’s tax regulations.
- Quarterly Installments: If your annual state tax liability exceeds $1,000, you are generally required to make quarterly tax payments. These quarterly installments help you fulfill your tax obligations throughout the year rather than making a single payment at the end of the tax period. It’s important to calculate your estimated tax liability accurately and submit the required quarterly payments by the specified due dates.
- Taxes in Multiple States: If you’re relocating your therapy practice from another state to Illinois or planning to operate in multiple states, you’ll need to understand the tax obligations in each jurisdiction. The regulations can vary depending on the states involved and the duration of your business activities in each state.
When operating in multiple states, you may need to consider factors such as nexus (the minimum connection required to establish tax liability in a state), apportionment (allocating income across different states), and potential tax credits or deductions for taxes paid to other states.
To ensure compliance with the tax laws of multiple states, it’s advisable to consult with a qualified tax professional or accountant who specializes in multi-state taxation. They can help you navigate the complexities and determine the appropriate steps to meet your tax obligations in each state.