- Dec 28, 2017
Small businesses will soon see a dramatic decrease in the filing fees for incorporation thanks to legislation recently approved by the Illinois legislature, pending signature by Gov. Rauner. The state’s Small Business Advocacy Council was instrumental in educating the legislators about the hardship the fees cause the state’s small businesses, and helping to craft a solution.
The fees associated with filing and operating a limited liability company, or LLC, in Illinois have traditionally been among the highest in the nation. Forming as an LLC is advantageous for many small businesses as it provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. Many business, however, do not form LLCs in Illinois because of the excessive fees.
Currently the initial filing fee and annual fees in Illinois are $500 and $250 respectively. These are more than triple the cost for starting a corporation and are the second highest in the country.
Late last year, the Illinois Senate unanimously approved legislation to lower the fees to $150 and $75 respectively. The House previously approved lowering the fees as well. Lawmakers commented that lowering LLC fees will help level the playing field for small businesses, encourage the formation of new businesses and improve the perception of the business climate for entrepreneurs in Illinois. Gov. Rauner has indicated his support for signing the legislation into law. Once the bill is signed, it is expected to go into effect in 60 days.