The Illinois Uniform Partnership Act, 805 ILCS 206, has applied since January 1, 2003. It is the rulebook when two or more people co-own a business. A general partnership needs no state registration. Optional partnership statements, such as the limited liability partnership (LLP) one, go to the Secretary of State. County clerks keep assumed-name certificates. Partnerships are taxed by the Illinois Department of Revenue. This page is for owners with partners in Canada, India or the United States.
Who the Illinois Uniform Partnership Act covers
| Question | Answer |
|---|---|
| What is a partnership? | Two or more persons carrying on a for-profit business as co-owners, without filing. An LLC or corporation is not one. |
| Does sharing profits make someone a partner? | Presumed yes, unless the money is wages, contractor pay, rent, loan interest, a benefit for a retired or deceased partner's family, a debt payment or a goodwill price. |
| Who can be a partner? | Any person: an individual, corporation, LLC, trust or other entity, with every partner's consent. |
| What is an LLP? | A partnership that filed a statement of qualification with the Secretary of State. |
| Do professions differ? | The Act has no profession test for LLPs. A profession's own board may limit LLP use. |
What it means for a foreign-owned or cross-border business
This page covers Illinois law only. Rules in Canada and India are for your advisers there.
| Situation | What the law says | What to check |
|---|---|---|
| Co-founders in Toronto and Aurora split profits with no paperwork | A partnership can form by conduct. A profit share is presumed to make the recipient a partner. | Whether you meant to be partners. |
| An overseas developer is paid a share of revenue | Wages, contractor pay and loan interest are exceptions to that presumption. | The contract's label, and our withholding guide. |
| A foreign company or trust joins | Entities count as persons. All partners must agree to admit one. | Whether its own documents allow it, with your attorney. |
| A partner lives abroad | The partnership files Form 1065 and gives each partner a Schedule K-1. No Form W-2. | Withholding on that share, in our foreign-owned LLC guide. |
| The partnership uses a brand name | A name other than the partners' actual names needs a county clerk certificate; Section 4 exempts a name that includes the partners' true names. | Our assumed name guide. |
The rules and checklist page adds the Weathervane Partner Count. Compare the LLC Act and the Business Corporation Act, or see US business entity types and tax forms and the Illinois LLC vs corporation guide.
Official sources
- Illinois General Assembly: Uniform Partnership Act (1997), 805 ILCS 206
- Illinois General Assembly: Assumed Business Name Act, 805 ILCS 405
- Illinois Secretary of State: Limited partnerships and limited liability partnerships
- IRS: Partnerships
- Illinois Department of Revenue: Partnerships
This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.