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Illinois Rolls Back LLC Fees

This is the season to be pro-business. First President Trump and Congress passed significant tax reforms that are intended to help businesses, especially small businesses. Whether or not this occurs will be seen. However, one area in which the Illinois Government has reached out to help Illinois businesses is to lower the filing fees associated with limited liability companies or LLCs.

Effective December 20, 2017, Governor Rauner signed into law, a bill that drastically reduced filing fees associated with LLCs. Illinois fees had been one of highest in the nation. For example, it would cost $500 just to file the paperwork to form an LLC and then another $250 for the annual report. In the space of three years, an LLC would pay $1,000.00 to the state just for filing fees. With this new legislation fees, the filing fees to establish an LLC will be reduced to $150.00 and the annual report fee would be reduced to $75. So now in that same three period, an LLC will only pay $300 in fees to the State, a savings of $700.

A significant reason for this legislation was that many LLCs would look to form in other states with lower filing fees. While this may have created some tax and liability issues if the LLC did not register in Illinois, most businesses felt the costs savings worth it. However, that reasoning is now gone with these lower fees. Here is a chart showing some of the lower fees.

Item	Before	Now
LLC Filing Fee	$500	$150
LLC Filing Fee for Series LLC	$750	$400
Reinstatement	$500	$200
Reserved Name Application	$300	$25
Annual Report	$250	$75
Amendments	$150	$50
Name Transfer	$100	$25

When starting a new business, it is important to look to form as either a corporation or LLC as you are establishing a means to protect your personal assets from the liabilities of your business. Sole proprietorships, partnerships and simple d/b/a do not provide this protection. Just because you put on your truck and contract’s Ron’s Service, Inc. does not protect your personal assets from the business liabilities unless you are incorporated.

LLCs are popular entities as they are simple and flexible. They can have one or multiple members, different rights for different members and you can avoid certain corporate formalities like annual minutes and shareholder meetings. As a pass-through entity, the LLC itself does not pay taxes but rather the tax liability is passed onto the members.

As we make way to enter into 2018, the New Year is a great time to start planning for and establishing your own business. With the state of Illinois’s significant reduction in fees, the costs of setting up an LLC and maintaining it are no longer as large of a concern. While there are many websites that will offer to set up an LLC for you at a nominal charge, many of these websites are not a substitute for competent legal representation. At Drendel and Jansons Law Groups, we have decades of experiences representing hundreds of small business throughout the Fox Valley area and beyond. We can assist you in setting up your entity at a low-cost flat fee, but at the same time provide you the appropriate guidance you will want to protect what you are building. Please look to contact us and allow us to be a partner in your business venture.