Editor's Note: This article has been corrected and revised, as a previous version did not accurately report the changes to the schedules of fees.
SPRINGFIELD – Forming a limited liability company is getting a little cheaper in Illinois under a new state law.
The measure, approved by both chambers of the Illinois General Assembly, was signed into law by Gov. Bruce Rauner in December.
“This is a step in the right direction for our small businesses,” Rauner said in a press release at the time of the signing. “The new rates are more competitive with other states.”
Rauner also noted that by easing the fee burden for LLCs, the “state is sending a message to entrepreneurs and small business owners in Illinois: Start here and stay here.”
According to the legislation, the new law amends the Limited Liability Company Act. It reduces from $500 to $150 the fee collected by the Secretary of State for filing articles of organization, and similarly significantly slashes other fees.
A limited liability company is a type of a private limited company that has a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.
According to Karen A. Tobin, an attorney at SmithAmundsen in suburban Woodstock, the new law will encourage businesses to stay in Illinois.
“Illinois had one of the most expensive filing and maintenance fee system for the LLCs previous to these changes,” she said.
The new law is expected to be a boon for business in the state.
“LLCs are a popular entity structure for business and real estate property ownership,” Tobin said. “They are flexible in structure and do not have the same corporate formality requirements.”
It also could lead to additional investment and opportunity in the state.
While Tobin noted the initial filing fee to form an LLC is reduced from $500 to $150, the annual report fee is reduced from $250 to $75, and in other instances, fees went from $100 to $5.
“Anyone that has an LLC will benefit moving forward, and anyone that is considering forming one will benefit,” she said.
Whether you are looking to start a business or not, Tobin said it will benefit everyone, either directly or indirectly.
“Ordinary people should also care because it is a step in the right direction in trying to attract business, and not detract business, further bringing business and employment to the state,” she said.
It also will benefit the state in the same manner that it benefits its population, Tobin noted. Overall, the reduction in fees doesn’t make it materially easier to do business in the state, but she noted that “it does make it easier on the pocketbook.”