Illinois Uniform Partnership Act: Small Business Guide
Learn how the Illinois Uniform Partnership Act treats general partnerships and LLPs, with slides on who is covered, liability, fees, renewal and tax basics.
Last reviewed October 29, 2026 · General information, not legal advice
General information only, not legal advice. CPA Tax Payroll and Accounting Corp is a CPA firm, not a law firm. Laws change: confirm with the official source or a licensed attorney before you act. Read the full notice.
The Illinois Uniform Partnership Act is the state law for a business that two or more people run together for profit. Its official name is the Uniform Partnership Act (1997), found at 805 ILCS 206. No agency polices a general partnership. The Secretary of State files limited liability partnership (LLP) statements, county clerks keep assumed-name certificates, and the Illinois Department of Revenue taxes partnerships. This page is for co-owners and professionals who share a business and want the basics in plain English.
Slide show: The partnership law in seven slides
What the law does
It sets default rules for partnerships: who is a partner, how profit and loss are shared and what partners owe each other. Partners can write their own terms for many points.
Who it covers
Two or more people carrying on a business for profit as co-owners. A partnership can form even if no one meant to create one.
The rule
A general partnership needs no state filing. A business name other than the partners' real names needs a county clerk certificate.
The number
Filing as an LLP costs $100 per partner, with a $200 minimum and a $5,000 cap (2026).
The deadline
LLP status lasts one year. The renewal statement is filed in the 60 days before expiry.
The risk
Without an LLP, each partner is jointly and severally liable for partnership obligations. A filed LLP changes that for contract and tort obligations incurred while it is an LLP.
A practical tip
Put the agreement in writing. It may not eliminate or reduce partners' fiduciary duties, so a clear document helps with everything else.
Two or more persons running a for-profit business as co-owners; no filing creates it
101(f), 202(a)
Sharing profits
Presumed to make the recipient a partner, except for debt payments, wages or contractor pay, rent, retirement benefits, loan interest or the sale price of goodwill
202(c)(3)
Who can be a partner
Any "person," including an individual, corporation, LLC or trust; all partners must agree to admit a new one
101(j), 401(i)
LLP
A partnership with a statement of qualification filed with the Secretary of State
101(e), 1001
Licensed professionals
The Act sets no profession test, but a profession's own law or board may limit LLP use, so ask the board
None in the Act
How it touches your taxes and payroll
A partnership files Form 1065 and pays no federal income tax itself. Profit or loss passes to the partners, who report it on their own returns, and each receives a Schedule K-1. The IRS says partners are not employees and should not receive Form W-2; our partnership tax guide explains the return. In Illinois, a partnership files Form IL-1065 and pays a 1.5% replacement tax, and may elect a 4.95% pass-through entity tax (2026).
