A limited liability partnership (LLP) is one way out of many to structure your company. An LLP consists of two or more owners, who are general partners. These partners can be equally in charge of the company and can also represent the company in its business interests. Even though the partners are all in control of the LLP, they are not personally liable for the LLP. Rather, they possess limited liability that does not exceed their investment into the company. To have an LLP in Illinois, you have to register the company as an LLP with the Office of the Illinois Secretary of State.
Illinois has a number of requirements for any company seeking to operate as an LLP in the state. One such requirement is obtaining a Federal Employer Identification Number (FEIN) for your company before filing the necessary paperwork with the Illinois Secretary of State, which is something that one usually does after registering an LLP. Illinois also requires the name of an LLP to include “Registered Limited Liability Partnership,” “Limited Liability Partnership,” “R.L.L.P.”, “L.L.P.”, “LLP”, or “RLLP”. LLPs also must choose a registered agent that can receive official documents on behalf of the company. The registered agent must have a street address in the state, and it can either be an actual person living in Illinois or another company. Additionally, a company will also need to fill out and file certain paperwork with the Limited Liability Partnership Section of the Office of the Illinois Secretary of State in order to become an LLP.
To file the appropriate paperwork, you will need to print out the correct form, which can be found on the Illinois Secretary of State website, and mail it in with a completed duplicate form to the Limited Liability Partnership Section of the Office of the Illinois Secretary of State. An LP being formed in Illinois, which is a domestic LLP, will need to fill out a Statement of Qualification. In this form, you have to list the company’s FEIN, name, and chief executive office address, which must be a street address. You are also required to include the registered agent’s name and address, the total number of partners must be listed, and the partners’ names and addresses. a brief statement of what kind of business in which the LLP will engage, and when the registration will become effective. The form also requires you to calculate the filing fee, which is $100 for each partner not exceeding $5000. At least two partners must sign the form.
If an LLP was originally established elsewhere, then it is a foreign LLP and it will need to fill out a Statement of Foreign Qualification. This form has many of the same information requirements as a Statement of Qualification. However, the form also inquires as to where the LLP was first created. Also, if the LLP will be operating under a different name in Illinois because its current name does not meet the naming requirements in Illinois, then you will need to also provide that name. You do not need to provide a calculation of the filing fee because, unlike the fee for the Statement of Qualification, the filing fee of a Statement of Foreign Qualification is a flat rate of $500. In addition to filing a Statement of Foreign Qualification, a foreign LLP will also need to file a Certificate of Good Standing from its state or country of origin.
The profits of LLPs are usually taxed through each partner’s individual income taxes. Illinois has a flat tax rate that is 3.75%, which is lower than many other states. This means that the partners of LLPs in Illinois pay a lower tax rate compared to partners of LLPs in other states.
Illinois requires all LLPs to file a renewal statement each year. Along with the renewal statement, an LLP will need to pay a filing fee that is higher than annual filing fees in the majority of states. For foreign LLPs, the filing fee is $300, while the filing fee for domestic LLPs is calculated in the same manner as the initial filing fee with the company having to pay $100 per partner.
An Illinois business lawyer can provide you with crucial assistance when setting up an LLP. Before creating an LLP, you should get advice from a lawyer to make sure you are following all of the requirements set by the state.