LLC Statutes in Illinois

By Joe Stone

In 1997, the Illinois Limited Liability Company Act was enacted and established the governing LLC statutes in Illinois, cited as 85 Illinois Compiled Statutes (ILCS) 180. The act authorized the formation of LLCs as new business structures that are designed to give business owners the advantages of a corporation -- limited liability -- and a partnership -- flexibility in management and pass-through taxation. In August 2005, the act was amended to authorize a new type of LLC called a "series LLC" and amended again in 2010 to provide for a new type of LLC called a "low-profit LLC.”

Domestic LLC

The act authorizes Illinois business owners to form a separate legal entity called a domestic limited liability. The act specifies that a new Illinois LLC comes into existence after filing articles of organization with the secretary of state. The articles must include certain minimum information such as a name for the LLC that includes “limited liability company” or the abbreviation "LLC," the LLC’s principal address, the name and address of the LLC’s organizer and registered agent for service of process, a date of dissolution for the LLC or a statement that it is perpetual until voluntarily dissolved, and a statement whether the LLC will be managed by a single manager, more than one manager or all the members. The articles of organization are filed with the secretary of state’s office, which also provides an optional fill-in-the-blank form for use.

LLC Organization

Even though filing the articles of organization satisfies the basic requirement to form an LLC, a further step is typically taken to address how the LLC shall operate and the relationship among the members. This is done through preparation of an operating agreement. If the members choose not to prepare an operating agreement, then the default provision of the Illinois LLC statutes will govern the affairs of the LLC, which are set forth at 805 ILCS 180/15-5. Although multi-member LLCs can have a written or oral operating agreement, single member LLCs must put the agreement in writing.

Ready to start your LLC? Start an LLC Online Now

Series LLC

Illinois is one of only eight states that amended its LLC statutes to provide for a series LLC. This type of LLC is authorized to create within its structure separate series or cells, each with its own members, interests and liability. A series LLC would typically be created for a real estate business that owns a number of rental properties. Within the LLC, a separate series could be established for each property, which would provide for a separation of liabilities and obligations from each property, as well as differing members.

Low-Profit LLC

Illinois is only the fifth state authorizing the formation of low-profit LLCs, also referred to as an L3Cs. A low-profit LLC is designed to combine certain aspects of a for-profit and nonprofit business. It can only operate for charitable or educational purposes and is designed to use both philanthropic and private investment.

Ready to start your LLC? Start an LLC Online Now
How to Convert LLC to Series LLC
 

References

Resources

Related articles

Texas LLC Laws

In January 2010, the Texas Business Organizations Code became effective and replaced the Texas Limited Liability Act as well as all other acts applying to corporations, partnerships, and other domestic and foreign filing business entities. Regardless of when an LLC or any other business entity was formed in Texas, the provisions of the BOC apply. Under the BOC, four types of LLCs can be formed in Texas: domestic, professional, nonprofit and series.

How to Relocate an LLC to North Carolina

Relocating your LLC to North Carolina can be done in several ways. North Carolina law allows an out-of-state LLC, also called a foreign LLC, to register to do business in North Carolina while keeping the LLC active in the state where it was formed. The law also permits the foreign LLC to convert to a North Carolina LLC, if it will cease to be active in its state of formation. You can also dissolve your foreign LLC and reorganize it as a new North Carolina LLC.

Required Period of Separation in Wyoming for Divorce

Wyoming makes divorce relatively easy, at least when it comes to the grounds on which you can file. It's a no-fault state, so you don't have the option of alleging that your spouse did something wrong and that this is why your marriage ended. You can only cite irreconcilable differences or that your spouse is incurably insane, and you don't have to live apart before you file.

LLCs, Corporations, Patents, Attorney Help LLCs

Related articles

Michigan Limited Liability Company Act

The Michigan Limited Liability Company Act was enacted in 1993 to provide a new type of business structure that gives ...

How to Transition an LLC to a Corporation

Electing to convert a business from an LLC to a corporation is subject to the laws of the state where the limited ...

Incorporating Vs. LLC

One of the most important initial decisions in starting a business involves deciding what type of business entity your ...

How to Add a Partner to a LLC Using Sweat Equity

The existing members of a LLC have great flexibility to establish the procedures for the admittance of new members. As ...

Browse by category
Ready to Begin? GET STARTED