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Worker’s Compensation

By Joseph Ponitz, Attorney at Law

Franks, Gerkin & McKenna

Worker’s compensation laws provide money and medical benefits to an employee who has an injury regardless of fault as a result of an accident or occupational disease on the job.  The laws help protect workers and their families against hardships that arise because of injury or death at the workplace.  Many times an injured worker will look only at the immediate issues they are facing such as  lost wages and income.  Unfortunately, many work related injuries can have very long-term effects on personal health and income earning potential.  The Illinois Worker’s Compensation Act requires, in part,  employers to obtain workers’ compensation insurance, post a notice in each workplace that lists the insurance carrier and explain worker’s right.  Additionally, an employer is prohibited from discharging an employee who is exercising his or her rights under the law. 

We have well over 100 years combined experience in aggressively protecting our client’s rights in worker’s compensation lawsuits.  Although this article is not to be construed as legal advice, we encourage you to send your ideas on future topics to be discussed to jponitz@fgmlaw.com or call (815) 923-2107.

At Franks, Gerkin & McKenna we are a full service law firm practicing in the areas of Personal Injury; Business Law; Real Estate; Zoning; Wills’ Estate Planning; Probate; Divorce/Family Law; Criminal, Traffic and of course, Worker’s Compensation

Corporations in Illinois

Corporations are the most complex forms of organizing a business.  Unlike other business entities, corporations may sell stock which provide its holders the benefits of having ownership in the company.  A corporation must have a board of directors, this board is formed of a president and other supporting officers who are in charge of running the operations of the company.

To form a corporation form BCA-2.10 (articles of incorporation) must be filed.  This form asks for the company's name, name of person that will initially represent the company and address, the purpose of the company (what will the company do) and the number of initial shares.

The name of the company must contain one of the following words or their abbreviations: "corporation", " incorporated", "company", or "limited".  Names indicating that the company is to be engaged in the business of insurance, assurance, banking or fiduciary are not allowed.

The person representing the company must reside in Illinois or must be a corporation that is specifically authorized (stated in its articles of incorporation) to act as a registered agent and have offices in Illinois.

Illinois corporations can be formed for any lawful purposes with the exception of banking or insurance, this is why names indicating any types of these businesses are not permitted.

As we mentioned, the corporation must have one or more purposes for forming which are the objectives of the company.  There are also powers, which are the means by which the purposes may be achieved.  These do not need to be stated in the articles of incorporation.

Name and number of shares of each class of stock, that the corporation will be authorized to issue, are to be stated.  A class is a group of shares that have the same characteristics.

Typically classes are "common" or "preferred".  Common shares are given no preference over other shares in regards to the payment of dividends (payments made by the corporation to the shareholders when the corporation makes a profit).  Preferred shares are those that have preference or priority in the payment of dividends.  A number of shares that the corporation is allowed to issue for each class must be initially stated.  The corporation is not required to issue all the shares but it must issue some.

If more than one type of class of shares is stated, the differences between the classes must be described; the classes may differ on the rights of their holders or the properties of the actual shares.

When the corporation is formed, each owner is given a number of shares that represents their proportionate ownership in the company.  This initial number of shares given to each owner must be stated when the corporation is formed.  Each owner must exchange cash, property, or promissory notes (a contract where the issuing party makes an unconditional promise in writing to pay a sum of money to the payee).

If the corporation intends to own property or to do business outside of Illinois, it must comply with the incorporation laws of those states.  It also has to be stated during initial formation as initial taxes will be based on the percentage that the corporation's property and business is located in Illinois.

Two fees must be paid at the time of filing; a franchise tax fee which is based on the number of shared to be issued and the consideration (what is paid to the corporation in exchange for the shares) to be received, and a filing fee of 150 USD.

Limited Liability Companies (LLCs) in Illinois

Limited Liability Companies allows forming a business that provides the owners with limited liability.  Any type of business venture is well suited for this type of entity, with the exception of banking and insurance, as these are not allowed to form as LLCs.

To create an LLC a form with the articles of organization needs to be filed with the secretary of state, the cost is 500 USD.  This form asks for the company name, the main address where the business takes place, the name of the manager(s), and the purpose of business.  The form is really simple to fill out.  You have the option to take it in person or to submit it via the web at: www.cyberdriveillinois.com.

There is an option to file for “Series LLC”, allowing the company to create within itself separate “series” that have their own interests.  This is useful if you have a main company that operates a certain type of business, for example manufacturing of electronic devices and want to have two separate companies under the main one; one to manufacture electronic toys and another to manufacture computers.  Filing for a Series LLC costs 750 USD, however it is cheaper than filing two separate LLCs.

An LLC must designate a registered agent that serves as the main contact for all communications to and from the company.  The agent and the registered office must be in Illinois.

An LLC shares characteristics of a partnership and a corporation.  The limited liability concept states that the owners of the company are financially liable to a fixed sum, which is generally the investment in the company, and that they are not personally liable for the debts of the company.

By contrast, sole proprietors and partners in general partnerships are liable for all debts of the business.  An LLC also has the characteristic of having pass-through income taxation, which allows the entity to not pay taxes by passing all the income to its owners.  LLCs are great ways to form a business with a single or few owners.

LLCs have much less administrative paperwork and record keeping than a corporation.  LLCS are treated as entities separate from members.  Unlike corporations, LLCs cannot make initial public offerings and go public to sell parts of the company in the form of stock.

Legally Forming a Business in Illinois.  – Sole Proprietorship

The legal paperwork to start a business might seem complicated to some, but it is actually not that much.  The clue is to figure out what type of organization you want to form.

If you are going into business yourself and no one else, you might opt for a sole proprietorship.  Under this scheme, you can do business under your name, or you can file for an assumed name with the secretary of state at your local county clerk’s office.

Filing for an assumed name gives your business more credibility and let’s you choose a name that corresponds to the type of business you are doing.  For example if you have a flower shop, putting a sign outside your business with your name “Joseph Smith – Flower Shop” may not be the best decision, however, if your business displays the name “Eternal Spring Flowers”, it might provide your customer’s with a better idea of what you offer.

A sole proprietorship is the least expensive of all types of organizations, and it is also the easiest to file tax returns for.  In McHenry, Lake and DuPage counties it only costs 5 USD to file for an assumed name, in Cook and Kane counties the cost is 50 USD.

The steps to follow are:

- A simple registration form has to be filled out and submitted to your local clerk’s office.

- The filing form has to be signed in front of a notary public, whom you can find at your local bank; there is usually no charge for this.

- You have to publish the filing of your new registered business in a local newspaper every week for three weeks.  The first publication must be within 15 days of registration.

- Proof of publication must be given to the county clerk within 50 days to receive the receipt for registration and finish the process.

Sometimes it is a good idea to seek professional help, especially when working on legal issues that we are unfamiliar with, if you want to make sure you are doing everything right, contact a local attorney office; they can help you make sure the process is done correctly for your peace of mind.

The local county clerk offices are:

McHenry County – 667 Ware Road, Room 107, Woodstock, IL    Phone: 815-334.4242

Kane County – 719 S. Batavia Ave., Bldg. B, Geneva, IL 60134   Phone: 630-232-5950

Lake County – 18 North County Street, Waukegan, IL 60085       Phone: 847-377-2400

DuPage County – 421 N. County Farm Road, Wheaton, IL 60187 Phone: 630-407-5500

Cook County – Cook County Building, Bureau of Vital Statistics, Assumed Name Unit.  118 N. Clark St. Randolph Street, Chicago, IL     Phone: 312-603-5656