How to Dissolve an LLC in Illinois
This article is provided for general informational and educational purposes only. It is not legal advice, does not create an attorney-client relationship, and should not be relied upon as a substitute for consultation with a qualified attorney or tax professional. Business formation requirements vary by state, and you should verify the laws that apply to your business before making legal or tax decisions.
Close an Illinois LLC with a sequenced winding-up checklist covering the state filing, remaining obligations, tax accounts, records, and evidence of completion.
Key Takeaways
Identify the entity's status before selecting the closure route.
Wind up business affairs before filing the statement of termination.
State termination does not automatically close tax and operational accounts.
Closing an Illinois LLC involves an authorized decision, winding up the business, and filing the appropriate termination document with the Illinois Secretary of State.
The standard Statement of Termination filing fee is only $5, but that is not necessarily the full cost of closing an LLC. A business with overdue filings, employees, debts, leases, contracts, taxes, or unresolved claims may have additional obligations to address before its affairs are completely settled.
Can You File for Termination Now?
Before filing, determine the LLC’s current status and whether its affairs have been properly wound up.
Current Situation | Next Step | Do Not Assume |
|---|---|---|
Active and in good standing | Confirm authorization and complete winding up | Active status means the company’s affairs are already settled |
Delinquent reports or unpaid state charges | Determine what must be corrected before termination | The $5 termination fee clears previous balances |
Administratively dissolved | Determine the appropriate reinstatement, winding-up, and termination route | Administrative dissolution automatically closes every tax and business account |
Members dispute closure or distributions | Resolve authority and ownership issues before filing | One member can automatically override the rights of the others |
Active and in good standing
Confirm authorization and complete winding up
Active status means the company’s affairs are already settled
Delinquent reports or unpaid state charges
Determine what must be corrected before termination
The $5 termination fee clears previous balances
Administratively dissolved
Determine the appropriate reinstatement, winding-up, and termination route
Administrative dissolution automatically closes every tax and business account
Members dispute closure or distributions
Resolve authority and ownership issues before filing
One member can automatically override the rights of the others
Under Section 35-15 of the Illinois Limited Liability Company Act, a Statement of Termination is filed once the LLC has been wound up. The filing identifies the LLC, provides an address for certain post-termination process, and states that the LLC has been terminated.
The Illinois Secretary of State’s online termination system also requires the LLC to be in good standing. An LLC that has been administratively dissolved, revoked, merged, converted, domesticated, or expired is not eligible to use that online termination route.
Separate the Filing Fee From the Shutdown Budget
The state termination fee should not be confused with the total cost of closing the business.
Item | Budget Treatment |
|---|---|
LLC-35.15 Statement of Termination | $5 standard filing fee |
Expedited service | Additional $50 where available |
Delinquent reports, penalties, or other amounts | Determine from the company’s specific record |
Reinstatement, where required | Separate application; standard filing fee is $200 |
Final payroll, taxes, creditors, leases, and professional services | Depends on the company’s actual obligations |
LLC-35.15 Statement of Termination
$5 standard filing fee
Expedited service
Additional $50 where available
Delinquent reports, penalties, or other amounts
Determine from the company’s specific record
Reinstatement, where required
Separate application; standard filing fee is $200
Final payroll, taxes, creditors, leases, and professional services
Depends on the company’s actual obligations
Do not automatically add reinstatement costs to every LLC closure. Whether reinstatement is necessary depends on the company’s current status and the filing route required for its circumstances.
What to Do Before Filing
Start by documenting the decision to close the LLC in accordance with the operating agreement and applicable Illinois law.
Determine who has authority to wind up the company’s affairs and who is authorized to sign the termination filing.
Next, prepare an inventory covering:
- Cash and other assets
- Accounts receivable
- Outstanding debts
- Contracts and leases
- Employees and contractors
- Tax accounts
- Business licenses and permits
- Insurance policies
- Pending or threatened claims
A closing ledger can help track each obligation, the person responsible for handling it, the amount or document required, and evidence that the task has been completed.
During winding up, the LLC’s assets must be applied to its obligations to creditors before the remaining surplus is distributed to members according to the applicable distribution rules.
If the LLC does not have enough assets to satisfy its liabilities, obtain appropriate legal or financial advice before making distributions to owners or selectively paying obligations.
Winding Up a Simple LLC
For a small project company or solo business, winding up may be relatively straightforward.
For example, the owner may need to:
- Collect a final customer invoice.
- Pay outstanding vendors.
- Cancel software subscriptions.
- Pay the accountant or other professional advisers.
- Set aside enough money for final tax obligations.
- Close unnecessary business accounts.
- Distribute remaining assets appropriately.
- File the Statement of Termination.
A company with employees, substantial debts, a commercial lease, litigation, multiple owners, or significant assets may require a considerably more involved process.
The same $5 state filing fee applies, but the actual cost and complexity of shutting down the business can be much greater.
File the Statement of Termination
Once the required winding-up process has been completed, prepare the current LLC-35.15 Statement of Termination.
The filing requires basic information including the LLC’s name, an address to which certain process may be mailed, and confirmation that the LLC has been terminated. The signer must have authority to execute the document.
The standard filing fee is $5.
Illinois also lists an additional $50 expedited-service fee for the Statement of Termination where expedited service is available.
After filing, retain the accepted document and verify that the Secretary of State’s records reflect the termination.
If the LLC is not eligible to use the online termination system because of its status, determine the appropriate procedure rather than submitting an unrelated filing simply to close the record.
What Happens When the Statement of Termination Is Filed?
Under Illinois law, filing the Statement of Termination terminates the existence of the LLC and its Articles of Organization are treated as cancelled, subject to statutory provisions concerning lawsuits, proceedings, and other appropriate post-termination actions.
Illinois law also provides mechanisms for dealing with company property discovered after termination.
This makes proper winding up before filing particularly important. The termination filing should be the culmination of the shutdown process rather than the first step.
The State Filing Does Not Close Everything Else
Terminating the LLC with the Illinois Secretary of State does not automatically notify every other organization with which the business has an account or obligation.
Depending on the business, separate action may be required for:
- Federal tax accounts
- Illinois tax accounts
- Local tax registrations
- Payroll obligations
- Business licenses and permits
- Bank accounts
- Insurance policies
- Landlords
- Vendors
- Payment processors
- Online platforms
- Professional licenses
Review each account individually rather than assuming the Secretary of State filing automatically closes it.
Handle Final Federal and State Tax Obligations
Closing the legal entity does not eliminate outstanding tax responsibilities.
The IRS’s closing-business guidance identifies several potential final tasks, including final tax returns, employee-related filings, tax payments, contractor reporting, account closure, and record retention.
Illinois and local obligations depend on the particular registrations and taxes applicable to the business.
Coordinate final filings with an accountant or tax professional where necessary, particularly if the LLC has employees, sales-tax accounts, substantial assets, unpaid liabilities, or complex tax elections.
Do Not Close the Bank Account Too Early
A business may still need its bank account during winding up to collect receivables, pay creditors, satisfy final tax obligations, issue refunds, or handle other legitimate closing transactions.
Coordinate the timing of the account’s closure with the company’s final accounting and tax work.
Owners should also preserve access to important business records after employees, contractors, accountants, or software providers lose access to company systems.
Illinois LLC Shutdown Checklist
Before treating the business as completely closed, confirm that:
- Approval to close has been properly documented.
- The person responsible for winding up has authority to act.
- Assets, liabilities, contracts, and pending claims have been reviewed.
- Receivables have been collected where appropriate.
- Employee and contractor obligations have been addressed.
- Creditors and applicable distribution priorities have been handled.
- The LLC’s Secretary of State status and filing route have been confirmed.
- The Statement of Termination has been accepted and retained.
- Final federal, Illinois, and local tax filings have been identified.
- Licenses and permits have been reviewed.
- Insurance policies have been addressed.
- Bank, payment processor, vendor, and other business accounts have been reviewed.
- Important company records have been preserved.
- A responsible person and location for long-term record retention have been identified.
Conclusion
Closing an Illinois LLC is not simply a matter of paying a $5 state fee.
The business must first properly authorize the closure and wind up its affairs, including addressing creditors, contracts, taxes, employees, assets, and other outstanding obligations. Once winding up is complete, the appropriate Statement of Termination can be filed with the Illinois Secretary of State.
For a simple LLC with no debts, employees, or unresolved obligations, the process may be straightforward. For businesses with significant assets, disputes, employees, leases, tax issues, or outstanding claims, legal and tax advice may be appropriate before making final distributions or terminating the entity.
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