Chicago, IL asked in Business Formation for Illinois

Q: Hi, I have signed a partnership on an LLC with another partner 50/50 but we have not filed anything with the IRS.

Are these documents valid in court and am I still considered a legal partner?

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1 Lawyer Answer
Michael R. Smith
Michael R. Smith
PREMIUM
Answered

A: To find out if the documents you've signed are valid and actually make you a member of the LLC or give you any interest in the LLC, you'll need to consult an Illinois business law attorney who will need to see the documents. However, no documents need to be filed with the IRS to create a limited liability company, to add a member to an existing LLC, or to transfer interest in an LLC. Those are matters of state law, not federal tax law. There are no IRS filings required to make those actions effective.

There may, nonetheless, be IRS filings (and state tax filings, for that matter) that must be or should be made. For example, if it's a new LLC, it will need to obtain a federal tax id (called an employer identification number or EIN, even if the LLC has no employees) from the IRS. If it is an existing LLC, the LLC may need to submit a form to the IRS to make sure it is taxed the way you want it to be taxed (for example, if the members want it to be taxed as an S-corp instead of a partnership). And then, of course, there will be tax returns to file later. But all those filings deal only with federal taxes. They need to be done correctly for tax purposes, but they don't affect the validity of the formation of an LLC, the addition of a new member to an existing LLC, or the transfer of LLC interest.

Bottom line: To get a complete answer to your question, you need to contact an Illinois business law attorney.

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