The llinois limited liability company is the most popular form or business entity in which to operate a business. An Illinois limited liability company (LLC’s) is a hybrid type of statutory legal entity, pursuant to the Illinois Limited Liability Company Act
, that combines principles of the corporation
(such as limited liability for all members (owners of the limited liability company are defined as members) with principles of the partnership
(such as simple partnership management structures and informal decision-making procedures). Further, an Illinois limited liability company offers business owners important legal and tax benefits unavailable through any other business organization form. For example:
Most often the Illinois LLC is better suited to the needs of most start-up business
and small business
owners compared with the law governing corporations and other traditional Illinois business organizations
such as the partnership
or limited partnership
The LLC business form makes available for the first time to multi-owner or multi-member businesses the combination of limited liability for all plus the option to elect a partnership tax
Especially important for single member business ownership, the Illinois LLC business form is the only business entity
that simultaneously provides individual (only one owner/member – single member LLC) with limited liability and sole proprietorship taxation.
The Illinois LLC business form can be, and is, used by virtually every type of business, trade, and profession (except of medical practices), and the LLC business entity can be, and is, used by businesses of every size and level of complexity – even the NYSE, LLC
Illinois Limited Liability Company Operating Agreement – Multi-Member
For the overwhelming majority of Illinois LLC’s where there are multiple business owners, the negotiation of a well-drafted, thoughtful operating agreement can bring major practical benefits to the business owners and the LLC itself. Prospective business owners of an Illinois limited liability company generally have a reasonably sound understanding of the financial and management rights that they will have as business owners. However, these business owners are often unaware of the critical duties, rights, obligations and liability to which LLC business owners are normally subject. The process of negotiating an operating agreement for the LLC can educate the business owners about such duties, rights, obligations and liabilities and it often: i) persuades prospective members who may be unsuitable not to join the LLC, and ii) enhances the effectiveness of those prospective members who do join.
Illinois LLC operating agreements themselves, once negotiated and adopted by the business owners, can provide a variety of legal and tax benefits, including the prevention of destructive member disputes and improved tax planning and business maintenance. Operating Agreement can also serve as a comprehensive guide to business owners regarding how to operate the LLC, a sort of users manual.