New Lower Fees for Illinois Limited Liability Companies

Illinois has long been one of the most expensive states in which to form a Limited Liability Company (LLC). This week all that changed as Illinois introduced substantially reduced fees for LLCs. The fee changes, which are effective immediately, are as follows:

Original Fee New Fee
LLC Formation $500 $150
LLC Annual Report $250 $75
Series LLC Formation $750 $400
Series LLC Annual Report $250 $75

The cost per designation for a Series LLC (using the Certificate of Designation) remains the same at $50 per designation. Revised forms can be found on the Illinois Secretary of State Business Services site.

Illinois now compares much more favorably with other states’ Limited Liability Company fees. Delaware, a popular state for business formation, costs $150 to register an LLC and $300 for the annual LLC renewal. Wyoming, a popular low cost alternative with good LLC asset protection laws, costs $100 to register an LLC and $50 for the annual renewal. So Illinois may not be the absolute least expensive, but it’s fees are now well within the “reasonable” range.

One potential impact of the revised LLC fees is how it may impact the use of Series LLCs. Previously, a business that had two discrete “parts”, for example a person with two rental properties that are managed separately, would save in registration fees by forming the business as a Series LLC ($750 to register plus two $50 designations for a total of $850) rather than two separate traditional LLCs (two $500 registrations for a total of $1,000).

Forming that same two part business will now be less expensive using traditional LLCs (two $150 registrations for a total of $300) instead of using a Series LLC ($400 to register plus two $50 designations for a total of $500). People with three or four separate business (or “parts” of a single business) are now much more empowered to choose a traditional LLC or a Series LLC based on the their business needs rather than allowing the LLC registration costs to drive the decision, as often happened previously.

If you have any questions about forming your small business entity, please call our office and ask to schedule a consultation.

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