Big News for Small Business: New, Lower LLC Fees

By Stephen Ball, SVP, Business Banking

Illinois LLC fees are set to come down – dramatically.

It is about to become much less expensive to start a small business in Illinois. In a unanimous vote, the Illinois Senate paved the way to lower fees paid by Limited Liability Companies – usually referred to as LLCs – for filings and operations. Senate Bill 867 is now on the governor’s desk awaiting signature. (Editor's note: This bill was enacted on December 20, 2017)

Before the early November passage of the bill, Illinois was tied with Massachusetts as the most expensive state to file for a new LLC. When the Illinois law goes into effect, that fee will drop from $500 to $150. Also dropping will be fees including the annual filing for LLCs, which will drop from $250 to $75.  

Other LLC fees dropping
In addition to filing fees, the new law will also reduce other costs for new LLC businesses. The fee for reserving a company name will drop from $300 to $25, and registering that name will cost $50, a drop from the current $300 fee.

Why small businesses choose LLCs
According to the U.S. Small Business Administration, “The business structure you choose influences everything from day-to-day operations, to taxes, to how much of your personal assets are at risk.” For many small business startups, an LLC allows them to take advantage of the benefits of both corporation and partnership business structures.  Chief among those advantages is the protection of personal liability; assets such as cars, homes and savings accounts are not at risk in case of lawsuits. Another important – and potential money-saving – advantage: profits and losses can be passed through to personal income without facing corporate taxes.

While you wait
Entrepreneurs can make good use of the time waiting for new LLC fees to take effect by getting professional guidance about which business structure is best for them and their business. While the LLC structure offers many advantages, other considerations must be folded into one of the most important decisions to be made before launching a new company. Sound advice from experts can help make those decisions simpler.