A limited liability company (LLC) is the most common type of business in the United States. It’s a business structure that protects its owners from being liable if the company accumulates debts or is sued. LLCs are relatively inexpensive to set up and the recordkeeping requirements aren’t as cumbersome as other business structures.
Unlike corporations that face “double taxation” because profits are first taxed at the corporate level and then again upon distribution to shareholders, an LLC’s profits are passed through to LLC members who report these profits and losses on their personal income tax return. Thus, LLC members are taxed only once.
Forming an LLC in Illinois
Setting up an LLC is relatively straightforward:
- Naming the LLC: A name must be chosen that’s not infringing on a trademarked name and that isn’t already used in the Secretary of State Business Services names database.
- A registered agent: Either an individual or a professional registered agent must be designated to receive legal documents on behalf of the LLC, but they must have an Illinois street address.
- Articles of organization: This document (Form LLC-5.5) is filed with the Illinois Secretary of State Department of Business Services.
- Filing fee: There’s an initial $150 filing fee, and a yearly fee of $75 for the annual report that’s filed.
It’s possible to set up an LLC by yourself or with the assistance of a registered agent service. Depending on the complexity of the venture, it may be prudent to consult with counsel experienced in this area of the law.