Deciding which state is best to start an LLC, between Illinois or Indiana, depends on several factors. Here are a few considerations:
- Cost: Illinois generally has higher initial and annual fees for LLC formation and maintenance compared to Indiana. If cost is a significant factor, Indiana might be more favorable.
- Taxation: Indiana has a flat-rate income tax of 5.5% for both personal and corporate incomes, while Illinois has a progressive income tax ranging from 4.95% to 7.99%. Consider consulting with a tax professional to determine which tax structure aligns better with your business goals.
- Business-friendly environment: Both states have initiatives and programs to support businesses. Illinois has a larger and more diverse economy, making it potentially more lucrative for some industries. Indiana has been noted for its pro-business policies and lower regulatory environment.
- Specific industry regulations: Depending on the nature of your business, one state may have more favorable industry-specific regulations or incentives. Researching each state's regulations and incentives relevant to your industry would be helpful.
- Location and target market: Consider where your target market is located and the proximity to your desired location. If you plan to primarily serve customers in a particular state, it may be beneficial to form your LLC there.
Ultimately, it is recommended to consult with a business attorney or advisor who can consider your specific circumstances, goals, and industry to provide the most suitable recommendation for your situation.