Slashed LLC Fees A ‘Huge Step Forward’ For Illinois Businesses, Economy
CHICAGO — Newly-reduced state fees will give many of Illinois’ 1.2 million small businesses a boost in 2018.
In December, Governor Bruce Rauner signed legislation that slashed heavy fees, such as start-up and annual filing fees, which all limited liability companies (LLCs) are required to pay the state. The majority of small businesses in Illinois are established on and prefer the LLC structure, according to the governor’s office.
Sponsored and passed with bipartisan support throughout the state, the bill lowers filing fees from $500 to $150 and drops annual reports from $200 to $75, making Illinois much more competitive with other states.
Both state legislators and small business advocates praised the move, saying more affordable fees would help even “the playing field” for businesses in Illinois.
“This bipartisan initiative is about much more than reducing some of the highest LLC fees in the nation,” said Elliot Richardson, CEO of the Small Business Advocacy Council, in a statement.
Priya Venkataraman, a controller who handles finances and accounting for Origin Investments, said she was pleasantly surprised when she saw the cost of an annual report had fallen from $250 to $75.
“I think it’s pretty exciting news,” Venkataraman said. “It’s a huge step forward, and it’s going to help a lot of small businesses in Illinois. It will make Illinois competitive with other states.”
Though many factors affect the choice of location for a business entity like an LLC, Venkataraman said the new bill will be a great incentive for Illinois. In comparison, the fee for an annual report in Delaware is $300, and in California, it’s as high as $820.
For Venkataraman, the new fees are a win for both small businesses and companies like hers.
“It will help small business owners for sure, but even for a company like ours that [deals with] hundreds of LLCs, it’s something that we will potentially be looking into,” she said. “The big advantage is the annual maintenance fee, because that’s something that you have to pay year over year...people will want to generally go to states where it’s lower.”