Legal Documents Every Illinois Business Owner Should Have in Place in 2026
The essential legal documents every Illinois business needs before it’s too late.
A few years ago, two friends started a business together in Illinois. Their families were close. Their kids played together. They trusted each other completely. They formed the company, opened a bank account, and got to work.
But they never put their relationship in writing.
There was no operating agreement. No buy-sell agreement. No clear document defining ownership percentages, authority, or what would happen if one of them wanted out.
The business grew. Revenue increased. Success brought stress. One partner wanted to expand. The other wanted to stay conservative. Disagreements grew. They are now in court fighting over profits, control, and distributions. The legal fees alone have already tripled what proper documentation would have cost at the beginning.
It’s so difficult to watch knowing—It was entirely preventable. I see variations of this more often than people realize, especially in closely held and family-owned Illinois businesses. Most disputes do not begin with bad intent. They begin with missing documents.
Here is another example. A local business owner discovered that an employee was working for a competitor on company time using the company’s computer. The employee was terminated immediately. The case ended up before a judge. The employer assumed the outcome was obvious. It was not.
There was no written employment agreement. No enforceable confidentiality provision. No properly drafted restrictive covenant. Under Illinois law, including the Illinois Freedom to Work Act (820 ILCS 90), non-compete and non-solicitation agreements must meet specific statutory requirements to be enforceable. Courts do not create protections that were never documented. The judge ruled in favor of the employee.
Again, preventable. If you own a business in Illinois, these are the foundational legal documents you should have in place:
Articles of Organization (LLC) or Articles of Incorporation (Corporation), properly filed and current.
An Operating Agreement (LLC) or Bylaws (Corporation) that clearly define ownership, management authority, profit distributions, voting rights, and procedures upon death, disability, or withdrawal of an owner.
A Buy-Sell Agreement addressing what happens if an owner dies, becomes disabled, divorces, wants to sell, or is terminated. It should also define how the business is valued and whether there is mandatory redemption.
A Shareholder Agreement for S-Corporations to protect ownership transfers and preserve S-Corp tax status.
Written Employment Agreements that comply with Illinois law and clearly outline expectations, confidentiality obligations, and enforceable restrictive covenants where appropriate.
Independent Contractor Agreements to reduce misclassification risk and define scope of services.
Non-Disclosure Agreements to protect trade secrets and proprietary information.
Client or Customer Service Agreements that clearly outline scope of work, payment terms, limitations of liability, and dispute resolution.
A Business Power of Attorney so someone can act on behalf of the company if you are incapacitated.
A Business Succession Plan that addresses what happens to ownership and control if you pass away. Does your spouse inherit voting rights? Do your children become owners? Is there funding in place to buy out your interest?
Good documentation can prevent disagreements and stress—and save you time and expense.
This is not about pessimism. It is about protection. The businesses that survive long term are not just profitable. They are structured properly. They have clarity in writing. They reduce risk before conflict arises. If you are an Illinois business owner and are unsure whether your governing documents are current, cohesive, or even exist, a review is often the most cost-effective decision you can make.
Court is expensive and really stressful. Prevention is key.
If you or someone you know owns a business in Will County and would like me to take a look at your documentation or put some in place to make sure you are fully protected under the law, contact me at 815-443-4767 or at allison@markettilawfirm.com.