Dissolving a Series LLC in Illinois: A Comprehensive Guide

Due to their adaptability and affordability, series LLCs have grown in popularity among investors and business owners. You might eventually need to dissolve your Series LLC in Illinois, though. This could be the result of a number of factors, including insolvency, retirement, or simply moving on to a new project. Whatever the cause, knowing how to dissolve a Series LLC legally in Illinois will help you avoid any problems in the road.

The filing of a Certificate of Dissolution with the Illinois Secretary of State is the initial step in dissolving a Series LLC in that state. The name of the Series LLC, the dissolution date, and a declaration that the Series LLC has settled all debts and obligations should all be included in this certificate. To confirm that the Series LLC has paid all taxes due, a tax clearing certificate from the Illinois Department of Revenue is also required.

Bonus depreciation may be used in Illinois. Businesses can deduct a greater percentage of the cost of qualified assets in the year they are put into service thanks to bonus depreciation. For Illinois taxpayers, the bonus depreciation percentage for property acquired and put into operation after September 27, 2017, is 100% for the fiscal year 2021.

In Illinois, the Employee Retention Credit (ERC) is not taxed. In order to assist companies in keeping their staff during the COVID-19 epidemic, the ERC is a tax credit that was established as a part of the CARES Act. The credit can be claimed on the employer’s quarterly federal tax return and is fully refundable.

All businesses operating in Illinois, as well as LLCs and partnerships with ties to the state, are liable to the Illinois franchise tax. The franchise tax is a charge for the right to conduct business in Illinois. The tax is calculated based on the business’s net worth or paid-in capital, whichever is higher.

In Illinois, a limited liability corporation that allows the development of distinct series or cells inside the same entity is known as a series LLC. Within the LLC, each series is permitted to have its own assets, liabilities, and members who are shielded from the liabilities of other series. Asset protection, cost savings, and flexibility in managing many enterprises or investments under one roof are just a few advantages of this arrangement.

A Certificate of Dissolution must be filed and a tax clearance certificate must be obtained in order to dissolve a Series LLC in Illinois. Bonus depreciation is permitted in Illinois, and the ERC is tax-free. The franchise tax applies to all corporations, LLCs, and partnerships in Illinois. Knowing how to dissolve a Series LLC legally in Illinois and other relevant tax rules will help you stay out of trouble legally and ensure a smooth transition to your next project.