The Illinois LLC operating agreement is a legal document used to assist the member(s) of a company of any size, so that the member(s) will have the ability to set forth an outline of the company’s operational procedures and policies for all members to follow in a uniform fashion, therefore maintaining a well run business.
The State of Illinois does not require companies to file this document. It is, however, recommended that all businesses enter into this agreement. The document provides an important separation (and therefore, protection) of personal assets from the business. This is required, in order to keep the company from becoming vulnerable, in the event the business is faced with litigation or failure of the business. Placement of the document will also provide tax benefits. Without the completion of the document, the benefits would not be possible under current laws.
Each member should read the entire document, to be sure that the they are clear with regard to the language of the document. If the members experience difficulty with the form, they may choose a consultation with a knowledgeable attorney for assistance.
Laws – (Limited Liability Company Act)
Table of Contents
Multi-Member – For use by companies with more than one (1) member to assist in organizing a member-managed business by setting forth various regulations and policies.
Single-Member – For use by a single owner to establish daily business practices, procedures, and other important business aspects.
To begin the LLC filing process, conduct a in the Secretary of State’s official records to ensure that it is currently available for use. Otherwise, your application is likely to be rejected. Furthermore, the name must include the words Limited Liability Company or the abbreviation L.L.C./LLC.
Step 1 – Nominate a Registered Agent
State law in Illinois demands that each LLC nominates a Registered Agent to receive government notifications and service of process on behalf of the business. The agent can be an individual with legal residence in the State or a business with authorization to conduct business in the State.
Step 2 – Registration Documents
Select your LLC type from the options below and fill in the application that follows.
- Domestic LLC – Articles of Organization
- Register – or Mail
- Foreign LLC – Application for Admission
- Register – Mail
- Print paper applications in duplicate
- Foreign applicants must include a Certificate of Existence issued within sixty (60) days of filing and authenticated by an officer in the initial jurisdiction
Step 3 – Filing Fee
The required filing fees are as follows:
- Online – $600
- Mail – $500
Online applications will be complete once the filing fee has been paid by credit card. If you are filing a paper application, attach a check or money order made payable to the ‘Secretary of State’ and send your filing package to the following address:
Department of Business Services, Limited Liability Division, 501 S. Second St., Rm. 351, Springfield, IL 62756
Step 4 – Operating Agreement
While an LLC operating agreement is entirely optional in Illinois, we highly recommend that one be implemented into your business structure as it can help organize your internal affairs. The agreement documents the rules and regulations for the business as well as any other provisions you’d like to establish.
Step 5 – Employer Identification Number (EIN)
The Employer Identification Number (EIN) is a nine-digit identifier that the Internal Revenue Service issues to business entities operating in the country. Specifically, the number is used to report tax information to the government. It is free to obtain an EIN or through the mail using Form SS-4.
Step 1 – Establishment of the Document – Enter the company name in the first line at the top of the document.
Step 2 – The Agreement – Submit the date in which the document shall be entered into between parties, in dd/mm/yy format.
- Check the box that is applicable
- Submit the required information behind the selected box, as follows:
- Single-Member – Enter the name of the company and the state where the company will reside. Enter the owner’s full name. Submit the owner’s physical address
- Multi-Member – Enter the names and address of each member (respectively)
Step 3 – Name and Principal Place of Business – Submit the following:
- The company name
- The address where the business is situated
- Submit the name of the city where the business will reside
Review the remaining information. Enter all requested information as follows:
- Provide the date in which the company shall be formed, in dd/mm/yy format
- Read the information within the following two titles:
Member Capitol Contributions –
- Check the applicable box
- Single-Members – Read all of the information provided in the paragraph
- Multi-Members – Enter each member’s name and contribution (respective)
- All members must review all of the remaining information in this section as follows:
Distributions – Members must review all information under the title.
- Check the box that applies
- Single-Members – Review all of the information behind the box
- Multi-Members – Submit each member’s name. Submit each member’s Percentage of Interest/Ownership
- Members must continue to review the remaining information
Step 4 – Books, Records and Tax Returns –
- Check an appropriate box
- Review all information behind the box selected
Proceed by carefully reviewing all of the following titles:
- Bank Accounts
- Management of the Company
- Select and check the applicable box
- Single-Member – Review all of the information provided under this title
- Multi-Members – Read all of the information beyond the box
- Enter the agreed limits into each line provided
Step 5 – Titled Sections – All members must check the box, if applicable, and carefully read the information provided, as follows:
- Meetings of Members – Submit an annual date when all members should expect to meet
- Assignment of Interests
- Ownership of Company Property (Single-Member) Check the box. Read the information under this title
- Right of First Refusal
- Admission of New Members
- Withdrawal Events
- Dissolution and Liquidation – Select the applicable box and review all of the applicable information behind each respective box
- Representations of Members
- Certificates Evidencing Membership – Multi-Member – Enter the name of the company and submit the date of when the document becomes effective, in dd/mm/yyyy format
- Indemnification (Single Members)
Step 6 – Signatures –
- Provide the date of the execution of the agreement, in dd/mm/yy format
- Enter the name of the company
- Enter the signature of a company representative in the “By:” line
- All members must provide signatures
When the document is complete and all aspects of the agreement have been agreed upon, copies must be produced and provided to all members for record keeping. The document should be kept in a safe location.