A LLC is a shortened abbreviation for “Limited Liability Company.” LLCs are incorporated businesses, but they are different from partnerships, sole proprietors, and corporations in that the shareholders are protected from being sued individually. In most other business structures, the stakeholders can be sued when liability issues arise. This is also true of nonprofits. A LLC structure protects the stakeholders’ individual assets, property, and wealth. As a result, this business structure is gaining in popularity and being used more and more often in business formation.
Illinois usually does not approve of the use of dashes in the business name, and the name must be unique, distinct, and end with LLC, or the words “Limited Liability Company.” Any name that another company has an exclusive right to cannot be used. If you want to use the word “trust” or “bank” in your Illinois LLC name, you will need approval from the Banks and Trusts Department.
Illinois LLCs must file their annual report, and pay a filing fee, within 60 days of the beginning date anniversary. So a company that was founded in May 18, 2016 has a 60 day window from May 18, 2017 to file an annual report.
To file an LLC, you must:
- Register an Agent: a person in-state that is able to receive any important documents on behalf of the organization.
- File article of organization: a document that has all of the information about the LLC.
- Create bylaws and/or an operating agreement: information as to how the LLC will operate.
- Obtain an EIN: a federal tax identification number. Banks require an EIN to start a business account, and all LLCs that will have employees in Illinois must have an EIN number.
Illinois LLC members and managers can live anywhere. This is a benefit of Illinois LLCs. There are no residence requirements for directors.
In Illinois, LLCs must have at least one member or manager, so there is no need to have multiple members of managers to form an LLC in Illinois. There are also no age restrictions regarding who can form an Illinois LLC.
One disadvantage of an Illinois LLC is that it dies when the owners die. It cannot outlive its stakeholders, while other corporations and business formations can. So when a member of an LLC passes away, the other members must prepare to deal with necessary paperwork to
Finally, an LLC can present added complexity that can require additional staff or legal help to operate and run correctly. The additional required cost and time may be difficult for a small business to manage.
If you are an Illinois resident who wants to form an Illinois LLC, you should speak with a Illinois business lawyer immediately. A lawyer will make sure your forms are properly filled out and that your incorporation is legal and comprehensive.