Illinois LLC fees need to be cut

The structure of a limited liability company, or LLC, offers great advantages for small businesses, such as allowing start-ups and small businesses to avoid the extra tax burdens of corporations. At the same time, the LLC structure protects the owners from the excessive liability of sole proprietorships and partnerships. In Illinois, the LLC is burdened...

The structure of a limited liability company, or LLC, offers great advantages for small businesses, such as allowing start-ups and small businesses to avoid the extra tax burdens of corporations. At the same time, the LLC structure protects the owners from the excessive liability of sole proprietorships and partnerships.

In Illinois, the LLC is burdened by unfair policies. The $500 start-up fee imposed by the state is the second highest in the nation, behind only Massachusetts at $520, and three times the amount imposed on local corporations. There’s an additional $300 fee to reserve an LLC name, $250 to file an annual report and $100 to dissolve an LLC.

Young businesses are often full of talent and short on cash. Imposing a high fee on LLCs serves no purpose other than to starve a business of capital when it needs it most. Every dollar kept by a start-up business allows them to leverage their talents into creating more products and jobs.

Improving the business climate in Illinois should start by easing the birth of businesses. The LLC fee should be slashed to the cost of covering filing paperwork. A fee above $50 takes cash from a business that needs it and gives it to a government that doesn’t.