In certain states, a limited liability company can be comprised of numerous series or cells, each with its own separate veil of liability protection. While it remains to be seen how the oral operating agreements play out, consider memorializing operating agreements in written documents executed by the members and managers. Missouri laws chapter 347 limited liability companies. The illinois general assembly has made sweeping changes to the illinois limited liability company act llc act, all of which are encompassed within a lengthy and detailed 112page bill. On july 19, 2017, the uniform law commission ulc approved the uniform protected series act upsa at its annual meeting.
An illinois series llc is a single legal business entity that permits the partitioning of assets and liabilities among the various series. Illinois sheriffs file lawsuit to overturn states trust act. The revised uniform limited liability company act, 62 bus. Although there are many revisions, here are some that may have the most impact.
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. Limited liability company act, revised uniform law commission. The delaware series llc is the most cuttingedge entity on the market. Tax aspects of series llcs american bar association. My office provides this booklet to assist you in the. This can separate the various properties into separate series, thus segregating the liabilities. More than 70 business entity statutes were added or amended by the illinois legislature during the latest legislative session, including extensive changes to the states limited liability company act. Cost effective means to limit liability approximately two years ago, the illinois limited liability company act was amended to allow for the creation of series limited liability companies series llcs. One or more persons, including trusts, estates, and other business entities, may form an llc by filing articles of organization form llc5. Illinois series llc how to start and maintain a series llc. Your humble writer was an aba adviser to the drafting committee for the.
Indeed, if a colorado court were to render a money judgment against a delaware series llc because of an act of one series of the series llc in colorado, the full faith and credit clause would require a delaware court to recognize and enforce that judgment. The revised uniform limited liability company act 2006 does not authorize series llcs. Proposed regulations under section 7701 of the code provide whether or not a series of a domestic series llc, a cell of a domestic cell company, or a foreign series or cell that conducts an insurance business is a juridical person for local law purposes, for federal tax purposes it is treated as an entity formed under local law. For the reasons, see prefatory note in which the reporters describe the series. The changes went into effect on july 1, 2017 and can have a significant impact on the formation and operation of illinois limited liability companies. That means, for example, a series llc will be required to appoint and continually maintain a registered agent and file an annual report. I think this comes from the fact that the series llc is relatively new delaware was the first state to adopt the series llc in 1996, and many states have adopted it within the last 510 years, as well as the fact that only about of the states have a series llc statutes and those statutes are not in any way uniform. 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. Uniform limited liability company act the ullca, on which a number of state llc statutes are based,1 and the limited liability company act of delaware2, which has been generally in the vanguard in adopting such concepts as the single member, non. 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. Mar 17, 2020 on appeal, sunnycrest argued that it was a series llc, and cited to 3740 of the illinois limited liability company act to support its position that sunnycrest was thus a separate corporate.
Limited liability company act, revised uniform law. The illinois llc act 805 ilcs 180 governs the organization and operations of llcs in illinois. Llc articles of organization illinois secretary of state. The act has been amended allowing for series llcs and lowprofit llcs.
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. Form multiple separate corporations or llcs, one corporation or llc for each enterprise. For a series llc in the illinois, formation of a new series requires filing a certificate of designation with the secretary of state, which must have the name of the new series and the names and addresses of the managers or members if there are no managers. Among the many changes 2017 will likely bring for businesses are sweeping amendments to the illinois limited liability company act that take effect on july 1, 2017. An example would be a company that owns several rental properties. The illinois limited liability company act act, initially enacted in 1993, governs limited liability companies llcs, which allow for the tax advantages of a partnership with limited personal liability of corporations. The certificate of formation shall be filed in the office of the secretary of state and set forth. Many knowledgeable entrepreneurs and real estate investors have chosen delaware. This is called a series llc, and its often used as an asset protection device that, in some states, saves the formation fees and the hassle of creating multiple llcs for. If the company is to be authorized to establish series, it must file a separate certificate of designation on form llc37. Effective august 16, 2005, the limited liability company act 805 ilcs 180 act is revised by altering section 5010 and adding section 3740. The series llc is a product of the delaware legislature, the most highly regarded body for drafting corporate laws.
Unlike most other states, illinoiss llc act does not explicitly allow for an alternative method to voluntarily dissolve an llc independent of provisions in your operating agreement. Limited liability company or domestic limited liability company means an entity that is an unincorporated organization organized and existing under this chapter, or that has become a domestic limited liability company of the commonwealth pursuant to. In overall structure, the series llc has been described as a master llc that has separate. When forming a company, business formers have a choice of jurisdictions. 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. The illinois limited liability company act act recently underwent a significant overhaul. How the series llc works what are the benefits of a series llc protection. Series limited liability companies attorneys title.
These changes were effective july y 1, 2017, and apply to all illinois limited liability companies. The series llc business structure isnt unique to arkansas it was invented in delaware in 1996 and has since spread to more than a dozen other states and jurisdictions, but the arkansas uniform protected series act has special features youll need to know about if you decide to start an arkansas series llc and establish protected series. Thereafter all series are created in the operating agreement and then. Under the act, a business owner can organize a domestic llc entity, which means the llc forms under illinois state laws as opposed to other state laws. A limited liability company with the ability to establish series, commonly referred to as a series llc, has the ability to create within itself separate series or cells which have their own interests, liabilities and members. Illinois compiled statutes illinois general assembly. The illinois limited liability company act act, 805 ilcs 18011, was substantially amended this year. Illinois llc form an llc in illinois or delaware incnow. The most important benefit of a series llc is the ability to protect each child series and its assets from the liabilities of the other child series and the master llc investors can manage wealth by dividing investments between the child series based on potential return and risk. 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. Illinois statute contains most of the provisions that are found in delawares statute, which was established in 1996. Jul 22, 2017 on july 19, 2017, the uniform law commission ulc approved the uniform protected series act upsa at its annual meeting. Illinois law specifically states that a series of an llc shall be treated as a separate entity to the extent set forth in the articles of organization, and then also provides that each series may in its own name, contract, hold title to assets, grant security interests, sue and be sued and otherwise conduct business and exercise the powers of a limited liability company.
Articles on limited liability companies illinois state bar. Extensive changes to illinois llc act golan christie. File an series llc articles of organization and notice of the limitation on liabilities of a series. Illinois is one of only eight states where businesses can establish series under limited liability companies llcs. As used in this act, unless the context otherwise requires. Therefore, if your operating agreement does not provide for dissolution, you should seek the assistance of a local business attorney. The articles of organization must state the names and business addresses of all managers and any member with the authority of manager. Mar 20, 2014 illinois is one of only eight states where businesses can establish series under limited liability companies llcs. Illinois law specifically states that a series of an llc shall be treated as a separate entity to the extent set forth in the articles of organization, and then also provides that each series may in its own name, contract, hold title to assets, grant security interests, sue and be sued and otherwise conduct business and exercise the powers. Series llcs somewhat demystified statebystate kkos lawyers. Extensive changes enacted to illinois limited liability.
Aug 15, 2019 the series llc business structure isnt unique to arkansas it was invented in delaware in 1996 and has since spread to more than a dozen other states and jurisdictions, but the arkansas uniform protected series act has special features youll need to know about if you decide to start an arkansas series llc and establish protected series. Changes to the illinois liability company act waltz. The individual series are protected from liabilities and losses suffered by the other individual series and the master llc. If the company is to be authorized to establish series, it must file a separate certificate of designation on form llc 37. Form one series llc, with multiple cells or subllcs, one cell for each enterprise. Extensive changes enacted to illinois limited liability company act. The text of the entity omnibus act hb 2963, which, if signed into law, will permit conversion or redomestication to or from an illinois corporation is available here. A limited liability company agreement may establish or provide for the establishment of 1 or more designated series of members, managers, limited liability company interests or assets. The illinois limited liability company act provides that you may choose a name so long as it is distinguishable upon the records of the secretary of statefrom any domestic or foreign limited liability company name or assumed llc name, any domestic or foreign corporate name or assumed cor porate name, or a name that is currently reserved or registered with the secretary of state under either the limited liability company act or the business corporation act. The organization of series limited liability company in illinois is authorized under the limited liability company act 805 ilcs 1803740. A series llc is a limited liability company with a unique structure.
A series llc is typically the more costeffective solution. This site is maintained for the illinois general assembly by the legislative information system, 705 stratton building, springfield, illinois 62706 2177823944 2177822050 tty. The revised act will also permit a foreign llc to become an illinois llc through the filing of articles of domestication with the illinois secretary of state. Jun 30, 2017 the revised act will also permit a foreign llc to become an illinois llc through the filing of articles of domestication with the illinois secretary of state. This gives illinois businesses an interesting option. If you have multiple businesses that you would like to keep separate for the purposes of liability, you have two options. Extensive changes to illinois llc act golan christie taglia. The illinois llc act protects membership interests from members. Recently, illinois house bill hb 4361 the bill, which has been six 6 years in the making by the institute of illinois business law, was signed into law and significantly revises the illinois llc act. Springfield, illinois four sheriffs have filed suit in federal court to overturn the states trust act they believe interferes with law enforcements ability to deal with undocumented immigrants. Anniversary means that day every year exactly one or more years after. The full text of the changes to the illinois limited liability company act, including the new conversion statute, is also available as public act 0990637. Illinois series llc statute 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. Series llc not allowed to play peashell game in city of.
Series llcs arent bad for the businesses they were intended for structured investments but relying on liability protection holding up among the cells is of concern, especially for highliability ventures such as real estate but if youre absolutely intent on using a series llc for your assets or operating business and are willing to take the risk, this. A series llc is a costeffective alternative for business owners and entrepreneurs with multiple enterprises. Illinois followed delaware, which introduced the series llc in 1996 in an effort to allow business owners to. Series llcs somewhat demystified statebystate kkos. Series llc ruling affirmeddistinct entity not clear. Earlier this year, governor rauner signed into law significant amendments to the act as to how, among other things, illinois llcs are formed, operate, and are ultimately dissolved. A series llc is a unique structure that combines the flexibility of a partnership with the liability limitation of an llc. 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.
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. Articles on limited liability companies illinois state. Uniform protected series act upsa adopted by uniform law. A series llc consists of a master llc with one or more individual series llcs branching off from it. Series limited liability company illinois llc attorney. 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. When all requirements are met, or unless otherwise provided for by. Illinois limited liability company act secretary of state certificate of designation department of business services limited liability division 501 s.