Use of a Single-Member LLC

A single-member LLC’s provides considerable flexibility for its owner. Individuals forming a new business may choose to forego the liability of operating the business as a sole proprietorship, or the forming a corporation to own the business, by creating a single-member LLC which would own and operate the business and assets. The single-member LLC provides advantages over partnerships with a single equity source because a single-member LLC eliminates the need to have two or more owners and this may result in fewer costs by avoiding the need for creation of more than one legal entity to act as “partners.” Additionally, single-member LLC’s may be used to own multiple divisions of a business or multiple real properties with ownership is vested in a single-entity.

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Illinois Limited Liability Companies (“LLC”) are governed by 805 ILCS 180/1-1. The Limited Liability Company Act (“LLCA”).

An LLC is a separate legal entity and requires certain procedural steps be followed. First, the LLC organizer(s) must file articles of organization (the LLC counterpart to a corporation’s Articles of Incorporation) with the appropriate state agency (generally, the Secretary of State). The articles of organization must contain: the name and address of the principal place of business of the LLC; its period of duration; the business purpose (ordinarily, language to the effect of for the transaction of any or all lawful business for which limited liability companies may be organized under the Limited Liability Company Act); the registered agent’s name, the registered agent’s address; the name(s) and address(es) of the initial LLC’s manager(s) or members; and a statement indicating that the LLC is managed by managers; the names and addresses of each organizer; and any other provision the members/managers elect to include.

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