Small business victory: Rauner signs law slashing LLC startup fees
Reducing barriers to entry for small businesses is a crucial step toward spurring economic growth in Illinois.
Small businesses are the backbone of Illinois’ economy. Indeed, 75 percent of jobs created in the Land of Lincoln in 2016 can be credited to businesses with fewer than 50 employees.
But Illinoisans might not know it by the way small businesses are treated by policymakers in Springfield, who squeeze entrepreneurs with red tape and costs while tripping over themselves to adorn giants such as Amazon with taxpayer-backed favors.
However, it seems as though small businesses in Illinois will have a reason to toast to the New Year this season. On Dec. 20, Gov. Bruce Rauner signed into law Public Act 100-0571, a measure that will significantly reduce financial burdens for entrepreneurs starting Limited Liability Corporations, or LLCs.
The law, effective immediately, slashes LLC firm filing fees by 70 percent to $150, down from $500. Before this change, Illinois was home to the highest filing fees in the country, tied with Massachusetts. Annual report fees for LLCs will also drop by 70 percent, to $75 from $250.
Previously, state law even punished LLCs for failure, inflicting a $100 dissolution fee on disbanding enterprises. That number has been reduced to $5. Registering a name for an LLC once cost an entrepreneurial newcomer $300. Now, business owners will only be tapped for $50.
These reforms put Illinois in league with its neighbors, offering a ray of hope in a state starving for economic growth.
This pro-growth reform was a part of Illinois Policy’s 2017 Legislative Agenda.
While there’s undoubtedly more to be done, this measure will offer sorely needed relief to Illinois small businesses – especially future small business owners.
Needless to say, these irksome fees did little for state revenues while imposing outsized costs on financially sensitive start-ups. These, like so many of the state’s outsized levies, are obstacles Illinois is better off without.