Illinois series llc how to start and maintain a series llc. In overall structure, the series llc has been described as a master llc that has separate divisions. The series llc is a tough one to give definitive answers about. Income tax return for an s corporation, for illinois purposes the llc will file form il1120st, illinois small business corporation replacement tax return. The articles of organization must also include a provision specifically authorizing your series llc to establish series. The problem with the delaware series llc and virtually all of the other 7 states to date that have adopted series llc statutes illinois being one exception, is that a series is not defined as a separate legal entity.
For example, if the series llc is arch bay holdings llc and one of its series will be identified as 2010b, the name of the series could be arch bay holdings llc series 2010b p. Illinois compiled statutes illinois general assembly. See the document below and click on any number to see what information is required in the corresponding section. You cannot form a series llc in california, but if youve done so in another state that does permit it, you can register your series llc to do business in california. On august 16, 2005, the series llc statute 805 ilcs 1803740 was added to illinois limited liability company act, making the state the fifth in the country to allow the formation of series llcs. In illinois, which has a specific form of articles of organization for regular llcs form llc5. A series llc is the latest and by far most sophisticated form of business entity created. Jun 10, 2010 how to set up an illinois series llc 1. Limited liability company publicationsforms illinois secretary of. Form a series llc in illinois, you also have the option to set up a series llc these are. How to form an llc in illinois with pictures wikihow. Form multiple separate corporations or llcs, one corporation or llc for each enterprise. I wish to form a standard limited liability company which does not have the ability to establish series. Illinois statute contains most of the provisions that are found in delawares statute, which was established in 1996.
This enables businesses to separate different parts of the company into separate llcs, allowing them to isolate the liabilities of each segment from the others. Llc illinois how to form an llc in illinois llc university. To register, file application for admission to transact business, form llc45. The department of business services cannot give advice as to whether a series llc would be beneficial in your circumstances. Illinois series llc how to start and maintain a series. An illinois limited liability company is formed by submitting in duplicate the certificate of organization for limited liability company, llc5. Foreign llcs must appoint a registered agent for service of process physically located in illinois. The biggest problem with series llcs is that many states including california dont have series legislation and may choose to ignore the laws of the state where the series was created. Illinois permits the organization of series llc, which has the ability to create within itself separate cells that have their own interests, liabilities and members. What is the difference between a series llc and a restricted.
The delaware series llc is the most cuttingedge entity on the market. The series llc is a complex entity that can be hard to understand. A series llc is typically the more costeffective solution. When you form a delaware series llc with the delaware division of corporations, the entity you form often called the master llc can be pictured as an umbrella. This limited liability company agreement is made and entered into, and is effective as of this 1st day of november, 2015, by and between member one, as a member of the company as defined below, and member two, as a member of the company, and each other person as defined below who is admitted to the company. Therefore if you form a series llc, it is best to do so in delaware. Read our what is a series llc page to learn how they can be used to protect investments and safely scale your business. Cash is not accepted for filings with the secretary of states office. Series llc benefits and drawbacks for your business.
When forming a company, business formers have a choice of jurisdiction. How to set up an illinois series llc law office of tom sammons 502 n. The example of the attitude of the california franchise tax board. This naming convention is permitted by all state acts and will help ensure that the series will be respected in other states that adopt the series act once it is. Series llc ruling affirmeddistinct entity not clear. A series llc files a single annual report and pays a single annual fee. This new operating agreement provides how the llc will now be managed as a series llc. The difference between the series llc structure and just establishing a separate standard llc for each property is that in most cases only the parent llc is filed and renewed at the state level. The proof of the existence of the baby llcs is in the companys operating. In most states where you can form a series llc, you can establish individual series merely by amending your operating agreement, but some statesillinois, for examplerequire each series to register separately with the state. How to start a series llc in illinois we have created a step by step guide to help business owners with the formation of their illinois series llc.
Some depends upon the state treatment of the llc and under what jurisdiction it is formed. Series llcs are currently permitted in delaware, illinois, iowa, nevada, oklahoma, puerto rico, tennessee, texas, and utah. If the company is to be authorized to establish series, it must file a separate certificate of designation on form llc37. For more information, please contact the department of business services, limited liability division at 2175248008 ext. To form an illinois series llc, you must submit form llc. This application is used to create an illinois limited liability company. If the company is to be authorized to establish series, it must file a separate certificate of designation on form llc 37. How to convert llc to series llc by jeffry olson, j.
For example, if you own a taxi company, a common practice is to place each vehicle or two in its own limited liability company. Series llcs somewhat demystified statebystate kkos lawyers. However, the master or parent series llc is permitted to form multiple or subs or mini limited liability companies under the framework of the master. An llc is not a corporation, but it does provide the same liability protection as a corporation since it is separate. The series llc is a relatively new concept in business ownership, but the concept of multiple llcs has been around for some time. The delaware series llc is a limited liability company without a predetermined shape. A series llc can be a great way to separate your business assets and divide the responsibilities for investment and debt in different areas or divisions of your company. To create a series llc in illinois, you must submit articles of organization form llc5. In the illinois model, each cell must file a certificate of designation and pay a fee for each additional protected series. In order to form a series llc in illinois, aspiring business owners should have a good understanding of the states series llc statute. I wish to form a standard limited liability company which does not have the. The first illinois appellate court case about a series llc an entity authorized by section 374 of the limited liability company act to provide an easy way for a company to add additional layers and walls of insulation by structuring its operations and assets with a series of separate subsidiaries involved a dispute about misnomer and personal jurisdiction that provides an. Anniversary means that day every year exactly one or more years after.
Make checks payable to the illinois secretary of state. If filing by mail, the state doesnt accept personal checks. An example would be a company that owns several rental properties. If you previously formed your company as a traditional llc, it is possible to legally convert your llc to a series llc. An llc, which is recognized as a business entity in every state, provides its owners personal liability protection from business debts and judgments. The series llc is only available in certain states, including illinois. Does lower llc fees in illinois mean the end for series llcs. As used in this act, unless the context otherwise requires. A series llc allows you to form multiple minillcs, so to speak, and operate them all under a single umbrella company. It is not enough to merely file the amendment to the articles of organization with the secretary of state. A series llc is a form of llc that allows its members to divide the assets and operations of a parent llc into a set of child series. You must use a money order or certified check made payable to the illinois secretary of state. Series llc illinois how to start a series llc in illinois.
A series llc illinois is an option for new business entities in the state as of. If you would like to learn more about the concept, you must consult an attorney. Illinois series llc how to start and maintain a series llc in illinois. Jan 12, 2018 a series llc can be a great way to separate your business assets and divide the responsibilities for investment and debt in different areas or divisions of your company. Each llc in your series would have its own members. How to form a series llc a series llc offers a special kind of liability protection to an umbrella of businesses under unified ownership. Submit the form in by mail, fax, in person or online. How to start a series llc in illinois how to start an llc. This means that only the parent llc is paying filing and renewal fees. An llc limited liability company is a form of business ownership recognized by all u. A series llc is a unique form of limited liability company llc in which the articles of formation specifically allow for unlimited segregation of membership interests, assets, and operations into independent series.
Effective august 16, 2005, a new section of the limited liability company act llc act, 805 ilcs 1803740 the series llc statute, made illinois the fifth state to allow series limited liability companies, or series llcs. A certificate of designation may only be filed after the limited liability company has been created through the filing of articles of organization. The series llc is a product of the delaware legislature, the most highly regarded body for drafting corporate laws. Proposed irs reg11992109 gives some insight as proposed irs regulations. Presently, only illinois makes separate entity status available for each series of an llc. All other states with the series llc have followed the delaware model except for illinois, missouri, and montana, yet many states have modified it slightly. Currently, district of columbia, illinois, iowa, kansas, minnesota, montana, nevada, north dakota, oklahoma, tennessee, texas, utah, wisconsin and puerto rico also allow the formation of series llc. Like a corporation or a nonseries limited liability company, a series llc is treated as a single legal entity. Form a different entity for each of your assets real estate, intellectual property, and so on so that you can segregate each asset from the lawsuits and liabilities of the others.
The concept is that a single entity may be formed in a state, but separate series or cells may be internally created within the llc. In theory, an llc can use each series to hold a separate asset, like. Rather, it simply is invested with all the legal advantages of being treated as if it were a separate legal entity. Further, a new series llc operating agreement must be drafted. Again, the requirements vary depending on the jurisdiction. Though delaware was the first to form the series llc, other states are also adopting the practice. Series limited liability companies attorneys title. This can separate the various properties into separate series, thus segregating the liabilities. A limited liability company with the ability to establish series, commonly referred to.
Series llc understanding the series llc and its advantages. How does illinois tax a limited liability corporation llc. Thats because youre subject to their rules when doing business in their state. Illinois governor bruce rauner signed into law public act 571, effective december 20th, 2017, which reduces many illinois llc filing fees including new llc formations and annual report fees by up to 70% the new law amends the illinois limited liability company acts section 5010 which pertains to llc fees then about 6 months later in the middle of 2018, the secretary of state. If the llc is a subchapter s corporation for federal income tax purposes, and files a u. Llc articles of organization illinois secretary of state.
A series llc is a collection of llcs that are grouped under one parent llc. The series llc can help organizations protect their assets from liability, and in many cases can do so with less expense and more flexibility than other structures that mitigate liability risk like the holding company or parentsubsidiary structures. How to set up an illinois series llc linkedin slideshare. This type of limited liability company llc can have multiple series, or groups of series, within the llc, each with its own or common members, managers or llc interests i. A series llc illinois is an option for new business entities in the state as of 2005, creating a limited liability company that serves as an umbrella for separate companies formed within the series llc. A few states now permit companies to form a business structure known as a series llc. We have created a step by step guide to help business owners with the formation of their illinois series llc. To do business in illinois, all llcs organized outside of the state must register with the illinois secretary of state. Form one series llc, with multiple cells or subllcs, one cell for each enterprise. A series limited liability company, commonly known as a series llc and sometimes abbreviated as sllc, is a form of a limited liability company that provides liability protection across multiple series each of which is theoretically protected from liabilities arising from the other series. This site is maintained for the illinois general assembly by the legislative information system, 705 stratton building, springfield, illinois 62706 2177823944 2177822050 tty. Each series operates like a separate entity with a unique name, bank account, and separate books and records.