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Resources, FAQs, and Articles
Different entities can have different consequences on liability and taxation, among other things. Business structure also determines what happens when one of the owner dies. The main forms are:
Sole proprietorship
Partnership – The partners share profits and losses according to the terms of a written agreement. A partnership can be general or limited
Limited Liability Company – A Limited Liability Company (LLC) provides the tax advantages of partnerships with the limited liability of corporations. The LLC can be a traditional or series LLC in Illinois.
Corporation – corporations have their own tax structure and provide limited liability protection for owners as long as corporate formalities are observed.
Yes, if your business and legal needs change over time, you might want to change your entity. There are many reasons and ways to restructure, including going from a sole proprietorship to a LLC.
How title is held can have important consequences on taxes, exposure to creditor’s claims and on the property passing to someone else in the event of death. In Illinois, there are the following different ways to hold title to your home:
Solely in your name
Tenants in common– if nothing is stated, this is the default. Owners of property in common own an undivided fractional interest in the property, but they can still use the entire property.
Joint Tenants– This means that the two people own the property jointly, with right of survivorship.
Tenants by the entirety – This option only applies to couples that are married. Tenants by the entirety has the same right of survivorship as joint tenancy but it also includes some protection against creditors. Only the creditors of the couple’s joint debts can be reached. The property cannot be partitioned, sold or encumbered without the permission of both spouses in the case of non-joint debts. Moreover, neither spouse can convey their half interest without the consent of the other. This tenancy is terminated by the death of one of the spouses, divorce or by agreement of the spouses. Further, it can be terminated by a court ordered sale to satisfy the joint debt of the husband and wife.