There are a variety of factors clients consider when organizing a new entity: business laws, tax laws, the court system, etc. However, what happens when your Delaware corporation or limited liability company (“LLC”) purchases a warehouse building in Illinois in order to receive merchandise that will later be shipped to customers in Illinois?
Under Illinois law, if your out-of-state company is conducting business in Illinois, you are required to register, or qualify, your foreign company in Illinois.
When determining whether your corporation or LLC is conducting business in Illinois, you should consider some of these factors:
- Does your company own real or personal property in Illinois?
- Do your company have employees working in Illinois?
- How much of your company’s revenue is derived from Illinois?
- Does your company meet with clients in Illinois?
- Does your company maintain bank accounts in Illinois?
- Does your company solicit or obtain orders from customers in Illinois?
Depending on your answers to the above questions, your company may need to register to conduct business in Illinois.
If you are or intend to conduct business in Illinois, and therefore need to register your business in Illinois, you will need to complete and submit to the Illinois Secretary of State (in duplicate):
- For an LLC – a Form LLC-45.5 Application for Admission to Transact Business, along with a Certificate of Good Standing or Existence, authenticated within the last 60 days by the state or country where the LLC was formed and a check of all applicable license fees, franchise taxes, filing fees, penalties and interest; or
- For a corporation -A Form BCA 13.15 Application for Authority, along with a recent (within the last 90 days) certified copy of Articles of Incorporation and all amendments and mergers thereto and a check for all applicable license fees, franchise taxes, filing fees, penalties and interest.
With respect to the Delaware entity above, which will now have a physical presence in Illinois, will have employees in Illinois, and will be deriving a revenue from orders placed and fulfilled in Illinois, we recommend that the Delaware entity register the business with the Illinois Secretary of State.
Not registering your foreign corporation or LLC (which is conducting business in Illinois) to do business in Illinois will result in fines, interest and back taxes. In addition, if your company is not qualified to do business in Illinois, your company will not be able to maintain a civil action in Illinois courts.
This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
Wendy M. Reutebuch | Real Estate, Real Estate Finance and Creditors’ Rights
Wendy represents clients in both Illinois and Wisconsin in a wide variety of commercial real estate and real estate finance transactions. In addition to handling acquisitions, dispositions and leases, Wendy also advises lenders on loan transactions, loan workouts, loan restructurings, forbearance and pre-foreclosure matters. If you need assistance with a related matter, contact Wendy.