The primary reason for selecting a limited liability company (LLC) structure for a business entity is to insulate the owners of the company from the liabilities of the company. With a properly organized LLC, if the LLC is sued, under most circumstances, the owners are not liable for any resulting liability arising from such claims. However, if you are a licensed professional in Illinois, for example, a physician, accountant, engineer, or therapist—and you have formed your company as a standard LLC, your company and entity selection may not comply with Illinois law. If that is the case, the protections for the owners from company liabilities afforded by the LLC structure may be lost, subjecting the owners to potential personal liability for the debts and obligations of the company. In addition, the Illinois Department of Financial and Professional Regulation (IDFPR) is aggressively enforcing the current rules and regulations to ensure that companies providing services in Illinois that require a license are properly organized as a Professional Limited Liability Company (PLLC) – not a standard LLC – since PLLCs and not standard LLCs are required for licensed professionals operating and providing licensed services through a limited liability company.
Why it matters
Operating under the wrong structure might adversely impact your license and ability for your company to provide the licensed services, expose the owners to direct liability arising from the company operations, and lead to licensing issues, penalties, fines, or worse.
How K+H can help
Our corporate attorneys can help verify your business entity is properly formed, registered, and compliant with IDFPR and other regulatory bodies. We will review your setup, fix any issues, and get your entity on solid legal footing—before regulators come knocking.
Unsure if your business is structured correctly? Contact us today for a compliance check-up and peace of mind.