Starting a series LLC in Illinois is almost similar to starting a traditional LLC in Illinois. The only difference is you need to file a special type of article of organization (Illinois Form LLC-5.5(S)) with the Illinois Secretary of State’s Department of Business Services. It cost you $400 to file online or paper filings of Illinois series LLC.
Here are 5 straightforward DIY steps to start a Series LLC in Illinois:
- Choose an appropriate name for Master LLC
- Pick an Illinois registered agent
- File articles of organization
- Draft an operating agreement for Illinois series LLC
- Obtain an EIN
Or use a reliable LLC service:
- Zenbusiness ($0 + State Fees)
- LegalZoom ($79 + State Fees)
Illinois series LLC, enacted in 2013, has all the characteristics of a limited liability company with an added layer of liability protection for each child series under the umbrella of a master or parent LLC. Follow this step-by-step Illinois Series LLC guide to start a series LLC in Illinois without any hassle.
Before we dig deep into each step, let’s have a quick recap on what an Illinois series LLC is and why you need to start a series LLC in Illinois.
What is Illinois Series LLC?
An Illinois series LLC is a type of limited liability company (LLC) that is formed under the laws of the state of Illinois and allows for the creation of separate series or cells within the LLC (Mater or Parent LLC).
After the creation of Master LLC, you don’t need to separate filing for each series. Not only the LLC members have limited liability protection against business debts or lawsuits but each series is also shielded against the liability of other series under the umbrella of a master LLC.
Each series aka child series or cell can have its own assets, liabilities, and management structure, and can be treated as a separate legal entity for the purpose of conducting business and entering into contracts.
Why Do You Need an Illinois Series LLC?
The Illinois series LLC structure is often used for asset protection and risk management purposes, as it allows the LLC to divide its assets and liabilities among the different series or cells, potentially limiting the exposure of the assets in one series to the liabilities of another.
This can be particularly useful for businesses that engage in multiple, unrelated activities or that have assets with different levels of risk.
Illinois series LLC is an alternative to a holding company or forming multiple limited liability companies in Illinois. In both cases, you need to form and file separate entities with the state. Whereas the series LLC allows you to create multiple entities without the need for state filing.
Note: A holding company is an entity that owns other companies’ outstanding stock.
To have a better understanding of why you need to form a series LLC in Illinois, here are some useful resources:
- Series LLC vs Holding Company,
- Multiple Businesses Under One LLC, and
- Series LLC vs LLC (Traditional)
Let’s step by step discuss the formation of series LLC in Illinois.
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1. Choose a Suitable Name
This name will be mentioned in the articles of organization. So, you must follow:
- Illinois laws related to naming a traditional and series LLC
- It must be distinguishable from the names of other business entities already on file.
- It must contain the words “Series Limited Liability Company” or an abbreviation like “SLLC” or “L.L.C.S”.
- The name should not confuse with any government agency
- It must not have any restricted words such as Bank, Attorney, etc. For that, you need to get permission or additional paperwork.
- This name must be distinguishable from any other names in the series
Please note that the child series name will not be mentioned in the articles of organization and you don’t need to file separate articles of organization for each series. If you wish to file a Fictitious Business Name (DBA) for any child series, you can follow our DIY guide on How to File a DBA in Illinois.
2. Choose an Illinois Registered Agent
A registered agent is a person or business entity that has agreed to accept legal documents on behalf of a company or organization. To start an LLC, every state in the USA requires you to mention the name and address of a registered agent.
The registered agent is responsible for receiving and forwarding important documents, such as lawsuits, official government notices, and other legal papers. You or any other LLC member can be the registered agent of your Illinois LLC or you can get registered agent services for this purpose.
Since the name and address of the registered agent go public, many business owners avoid naming themselves as registered agent for their LLC or corporation. So, they hire legit registered agent services.
Hiring a Professional registered agent service in Illinois such as ZenBusiness or Incfile can save you time and hassle by handling the receipt and forwarding of legal documents for you. This allows you to focus on running your business, rather than worrying about tracking down important documents.
3. File Articles of Organization
Articles of organization aka certificates of formation are the legal documents needed to file in order to register an LLC with the state. Both traditional LLCs and series LLCs need to file these documents with the Illinois Secretary of State’s Department of Business Services.
Difference Between the Articles of Organization of Illinois Series LLC and Traditional LLC
The only difference between filing the articles of organization for a traditional LLC and a series LLC is that you need to file a special type of article of organization called Form LLC-5.5(S). You can submit these articles by mail or online.
Components of Illinois Articles of Organization Form LLC-5.5(S):
Information Required on Illinois Articles of Organization for Series LLC
Here is a breakdown of the required articles:
Articles # 1: The Name of the Series LLC
The name must include the words “limited liability company”, “Limited Company,” or the abbreviation “L.L.C.,” “LLC,” “LC,” or “L.C.” Moreover, it must be distinguishable from the names of other businesses on file with the Illinois Secretary of State.
Articles # 2: The Address of Principal Place of Business
The Illinois series LLC’s address or place of business operation must be physical. You can not use a P.O. Box number alone.
Articles # 3: Future Effective Date
If the starting date of your series LLC is different from the date of filing your Illinois series LLC articles of organization, mention that date. You can mention the effective date that lies within 90 days after filing the articles of organization.
Articles # 4: The Name and Address of the Illinois Registered Agent
The Illinois registered agent’s name and address must be physical. You can not use a P.O. Box number.
Articles # 5: The purpose of the series LLC
This should be a general statement of the business activities that the named Illinois series LLC will engage in.
Articles # 6: Duration of LLC
The Illinois Series LLC can exist for a limited time period or continue to exist for an unknown duration in the future. In this article, you must specify whether the series LLC is intended to be a perpetual entity or one that will dissolve at a specific date.
Depending on your circumstances, on the online form, you may indicate either:
- The number of years or the event that will signal its dissolution, or
- Choose “perpetual”.
You can leave this line blank on the paper form if your Illinois series LLC existence will be perpetual.
Articles # 7: Optional
You can mention other provisions for the regulation of the internal affairs of your LLC in this article.
Articles # 8: LLC Members
This article indicates that your LLC must have at least one member. Though you can have as many members as you want. (see single-member vs multi-member LLC)
Articles # 9: Names and Addresses of LLC Management
Indicate the names and addresses of LLC managers of members if they have any managerial role depending on how you structured your LLC i.e; member-managed or manager-managed.
Articles # 10: LLC Operating Agreement
This article indicates that your LLC series must be mentioned in the Illinois LLC’s operating agreement. It also states that prior to the attestation and submittal of form LLC-37.40, you must file Illinois Articles of Organization for series LLC in
accordance with Section 5-40.
Articles # 11: The Name and Address of Each organizer
The LLC organizers are the individuals who sign and file the articles of organization to form the series LLC. They don’t necessarily need to be a member, manager, or owner.
Additional Requirement For Illinois Series LLC Articles of Organization
There are no additional requirements of Illinois series LLC articles of organization.
Submitting Illinois Series LLC Articles of Organization
You need to submit an Illinois Series LLC Articles of Organization Form LLC-5.5(S) with the Illinois Secretary of State’s Department of Business Services.
For paper filing, you need to download the form, fill out the information, sign the document, and send it to:
Secretary of State,
Department of Business Services,
Limited Liability Division,
501 S. Second St., Rm. 351,
Springfield, IL 62756.
Filing Fee for Illinois Series LLC
You need to pay a $400 fee for online submission and for paper filing.
Processing Time for Illinois Series LLC Articles of Organization
The formation of Illinois LLC takes around 10 business days after the Illinois secretary of state receives your articles of organization.
4. Create an Operating Agreement
The Illinois series LLC operating agreement is a legal document that outlines the rules and regulations for the operation of an Illinois series LLC. You need to create this document explaining how your Series LLC will be governed and operated.
Why You need Illinois Series LLC Operating Agreement
The operating agreement for an Illinois series LLC specifies the rights and responsibilities of the members, managers, and other stakeholders of the LLC, as well as the procedures for decision-making, management, and dissolution of the LLC and its various series or cells.
This document should be kept with your other important business documents. Remember, the operating There is no need to submit this document to the Illinois secretary of state.
5. Obtain Federal EIN
You need to obtain tax identification numbers aka EIN (Employer Identification Number) by registering with the IRS. EIN is used to identify a business entity for tax purposes. You need to file an EIN for each of the child series if it is
- Multi-membered series LLC,
- A single-membered series LLC with employees, or
- The series LLC chooses to pay its taxes as a corporation
How to Get EIN from IRS for Free
You can get an EIN via an online application or through paper filing:
What to Do After Forming Illinois Series LLC
Once you have successfully registered your Illinois Series LLC, you must complete these 2 steps to stay organized and compliant:
1. Obtain a Business License
There is no statewide business license in Illinois. However, individual cities and counties have specific licensing requirements of their own. You may need additional licensing or permits depending on the parent LLC’s business activities.
Moreover, depending on the individual business activities of each series, you may need to acquire business licenses for each series separately.
2. Open Business Bank Accounts
Keeping business and personal accounts separate from the start not only helps you sort the finances from the start but allows you to get full advantages of the limited liability protection of the LLC structure.
Therefore, you should open a business account for the parent LLC. If you want to keep the finances of each series separate, you may also open a separate account for each series.
To open a business account, you need the following documents:
- A copy of your Illinois LLC Articles of Organization
- Your Illinois Series LLC EIN
- A copy of your Series LLC operating agreement
Important Resources Related to Illinois Series LLC
To help you LLC related issues in the future, we have compiled a list of articles. You can refer to these resources to get your queries addressed.
- Change Registered Agent in Illinois
- How to Form Illinois Foreign LLC
- Illinois LLC Domestication
- How to Dissolve Illinois LLC
A series LLC (SLLC) is a type of business entity that offers its owners the benefits of a traditional LLC, with the added advantage of asset protection of each series. By following the steps above, you can successfully start a Series LLC in Illinois.
It’s important to be organized and keep proper records of all the documents related to your series LLC. Doing so will make sure that you remain compliant with state regulations for your business entity type.
Aisha Noreen is an owner of a small business with more than 9 years of experience in the marketing industry. With the wisdom of an old soul, she always seeks innovation and mind-blowing ROI techniques. Her unique approach helped many small businesses thrive and she can surprise you in many ways as well. Believe it or not, her energy, passion, and creativity are contagious enough to transform your business and take it to another level.
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