Find out how to qualify your LLC to conduct business in Illinois.
If you own a company that was founded in a state other than Illinois, you must qualify or register it in Illinois in order to conduct business there. The requirements for qualifying your international (non-Illinois) limited liability corporation (LLC) to conduct business in Illinois are summarized below.
What exactly is a Foreign LLC?
If your LLC was founded in another state, it is referred to as a foreign LLC in Illinois. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. In New Mexico, for example, an LLC founded in Colorado is a foreign LLC.
Doing Business in Illinois
If you are “transacting business” in Illinois, you must register your foreign company with the state of Illinois, according to the LLC Act. What exactly does this mean? Well, like other states, Illinois’ LLC Act does not specify what “transacting business” with connection to international registrations entails.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. According to these rules, a company must have a physical presence in, or nexus with, the state in order to be compelled to collect state sales tax on sales to residents of that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
The LLC Act in Illinois, as in other states, stipulates some acts that do not constitute doing business in the state. Among the objects mentioned are:
defending or settling a lawsuit dealing with internal business affairs such as holding member or manager meetings having a bank account in the state having an office, agency, or persons in the state for handling your company’s own securities selling through independent contractors soliciting or obtaining orders that require acceptance outside the state before they become contracts
Check Chapter 805, Section 180/45-47 of the Illinois Compiled Statutes for the exact legal definition of each of these objects. Page 5 of the SOS book A Guide For Qualifying Foreign Corporations is also accessible on the SOS website. The list on Page 5 is similar to that in the LLC Act, despite the fact that the handbook is meant for companies.
If your LLC’s only operation in Illinois is one or more of the activities mentioned above, you should not be required to register with the state.
Authority Certificate
You must submit an Application for Admission to Transact Company with the Illinois Secretary of State to register your international business in Illinois (SOS). Form LLC-45.5 will be used if you have a conventional LLC. Form LLC-45.5 should be used if you have a series LLC (which is not addressed here) (S). Both forms are available for download on the SOS website.
To complete Incorporate LLC-45.5, you must submit the same information that you would give to form an LLC in your home state. More precisely, you must supply the following information on an Illinois Application for Admission:
the name of your limited liability company
If your LLC’s original name, or something quite similar, is already in use in Illinois, you must adopt an assumed name.
the state (jurisdiction) in which your LLC was formed the date your LLC was formed the term of your LLC, which should be “perpetual” unless your operating agreement specifies otherwise
the name and street location of your LLC’s registered agent in Illinois, if applicable, the date your LLC began did business in Illinois
a statement stating why your LLC was formed and why it wishes to do business in Illinois
a statement that the SOS will act as agent for the LLC for service of process in any of the various circumstances set out in subsection (b) of Section 1-50 of the Illinois LLC Act (which covers situations such as an LLC that does not have an Illinois registered agent and the agent cannot be found with reasonable diligence).
The Application for Admission must be submitted in triplicate to the SOS. There is a $500 filing fee.
What Happens If You Don’t Register?
If your LLC does business in Illinois without being admitted, it cannot file a civil complaint there. However, not being accepted does not render commercial contracts formed in the state null and void, nor does it bar your LLC from defending litigation filed in the state.
Creating an Illinois Foreign Corporation
The regulations and standards for international qualifying in Illinois are identical whether your company is structured as a corporation rather than an LLC. However, you must complete a second application form, Application for Authority to Transact Business in Illinois (Form BCA 13.15). For paperwork, information, and filing requirements for registering a foreign company in Illinois, visit the Illinois SOS website.