How to Start an LLC in Illinois: If you’re interested in setting up an Illinois LLC, you’ve come to the right place. Having an LLC not only protects your personal assets but also is less complicated than other business structures. Illinois laws make it easy to establish your LLC. On this page, You’ll find all the steps that must be taken to ensure that your LLC has been correctly established in Illinois. We recommend you read the whole article very carefully, word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Illinois
- After Starting Your Illinois LLC
- Illinois Foreign LLC
- Illinois LLC Formation Review
How to Start an LLC in Illinois
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection.
If you wish to start an LLC, you mainly have to file your Certificate of Formation with the State and pay a filing fee of $150. There are some more steps to follow to get your LLC established in Illinois. The following steps explain everything you need to create your LLC in 2022. Let’s get started! It is always recommended to hire a professional LLC formation service in Illinois to set up your LLC.
Step 1: Decide a Name for Your Illinois LLC
The very first step while forming an LLC in the state of Illinois is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
LLC Naming Guidelines in Illinois
There are a few specific requirements all the LLCs in Illinois have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available, and no other existing business in Illinois can have the same name. Perform a name search from the below-mentioned source to be sure your name isn’t taken already.
- “Limited Liability Company”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Illinois State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –||Submit Offline Form to –|
|Illinois Business Entity Search – Online Name Search|
Name Reservation Form – PDF
Illinois LLC Name Search Guide – Instructions
|Department of Business Services|
Limited Liability Division
501 S. Second St. Rm. 351
Springfield, IL 62756.
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided then you can reserve your LLC name for 90 days. To keep the name, you have to file a name reservation application and pay $25 to reserve your name with the Illinois Secretary of State.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Illinois Secretary of State by submitting an Assumed Business Name Registration (online) along with the filing fee of $50.
Recommended: You can do name search, get company logo, business domain, website, emails, and a lot more in one place by hiring a professional service. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
TailorBrands offer DIY website templates and incredible logo designs. If you plan to get a website, then it is wise to have a “.com” domain for your business, but these days, you can also use other TLDs like “.company,” “.xyz,” etc. With TailorBrands, you can get everything you need at an affordable price.
It is not legally mandatory to use the word LLC in your domain name or email. If you want, you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in Illinois
The second step to forming an LLC in the state of Illinois is to appoint a Registered Agent. A registered agent is a person or business entity that will act or work on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Illinois. Hence, hiring a competent Illinois Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of Illinois or has a physical street address. Their business address or the principal address should be in Illinois. Most LLC formation companies also provide registered agent services. Below are two great LLC setup services, even if you buy their cheapest plan (normally $49/year), you also get registered agent service and other services at a reasonable price.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Illinois. Some LLC formation services offer standalone Illinois registered agent services. You can purchase only Registered Agent services from them without purchasing any other LLC formation services.
A person who is above 18 years of age and has a physical address in the state of Illinois can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity, or can be a representative of a foreign corporation. One who is responsible for handling all the legal documents.
Yes, you can be your own registered agent if you are a resident of the state of Illinois and you are above 18 years of age. To become a registered agent, you must have the authority to conduct any type of business in Illinois.
Step 3: File Articles of Organization in Illinois
The third and most important step in forming an LLC is to file the Certificate of Formation. This Illinois Articles of Organization is a legal document needed to officially register your business with the Secretary of State. It costs $150 to file your formation certificate in Illinois. (Read more on LLC cost in Illinois).
The Certificate of Formation includes details like the name of the LLC, registered agent’s name, address, employees’ details, and structure of the company (member-managed or manager-managed). Before hiring employees in Illinois LLC, one should know about the rules and regulations thoroughly. Also, if you are expanding your existing business (an LLC) to Illinois, then you need to register as an Illinois Foreign LLC.
How to File Online
How to File by Mail
If you prefer filing real-life forms for your LLC registration in Illinois, then you can download Domestic LLC Formation Form LLC-55. Read the form thoroughly, fill it out, and mail it to the following address,
Department of Business Services
Limited Liability Division
501 S. Second St., Rm. 351
Springfield, IL 62746
Processing Time: It takes around 10 business days to form an LLC in the state of Illinois. By paying an additional fee, it can be expedited.
Recommended: Online LLC Formation service can provide all these documents within 6-8 days with lifetime customer support and 100% accuracy. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
Step 4: Create Your LLC Operating Agreement in Illinois
Moving on to the fourth step, filing your operating agreement. An operating agreement is an internal document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing an Illinois LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation. Like Illinois, there are other states that do not have a mandatory rule to file operating agreements. But, this document would be useful if you decide to dissolve Illinois LLC later. Hence, having an operating agreement may not be necessary, but it is definitely ideal.
Recommended: You can get operating agreement templates at only $29 with TailorBrands. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
Step 5: Filing an Illinois LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Illinois LLC requires following specific rules and regulations. On the other side, EIN for Illinois foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally complete the form and send it to the address given. You can also get an EIN Assistant who can help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Recommended: This hassle will be reduced when you hire an LLC formation service. They take care of obtaining EIN and all other things for your LLC. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulation, you are now done with all the necessary steps to form your LLC in the state of Illinois. If you do it yourself, it should take you a long time to properly understand and do all the steps.
However, if you use TailorBrands, it should take fewer hours, and you always have a live chat with expert support for any help you need.
After Starting Your Illinois LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account. Along with a business bank account, get a business credit card, business accounting tools, and other tools to check revenues and business expenses. Get all business accounts to proceed.
- When you get your business credit card, make sure to check your business credit score. For any business, the business credit score is much needed.
- File Illinois business permits & licenses. For any formal or informal business structure, it is important to have proper details of business licenses. To run legitimate businesses, one must have proper licenses. Make sure to pay fees for business licenses on time to avoid any discrepancies.
- Get general liability insurance and professional liability insurance with coverage for employees. There are a number of business insurance companies. With a proper business insurance provider, you can conduct your business with ease in Illinois. There can be various types of business insurance. Choose the one that is suitable for your organization.
- File an Illinois LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings, to make sure your LLC is up-to-date. Along with the filing fees, make sure to pay fees for business licenses to renew them on time.
Cost of Starting an LLC in the State of Illinois
Forming an LLC is no doubt more cost-effective than other structures of a business. There are some fees and charges one has to bear to form an LLC. LLCs have pass-through taxation. Hence, your LLC won’t bring you a massive tax burden in Illinois. Here are some of the fees and taxes are needed to be paid while forming an LLC in the state of Illinois,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee||$25|
|Articles of Organization Fee||$150|
|LLC Annual Fee||$75|
In Illinois, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then you can do that online. Your LLC name will be reserved for 90 days without registering your LLC. It can be done by paying $25.
In Illinois, an Annual Report has to be produced every year. It costs $75. Also, the LLC has to pay 6.25% of Sales Tax to the state government. Read our guide on LLC costs in Illinois for more information.
Illinois Foreign LLC
If you are interested in forming a Foreign LLC in the state of Illinois, then you need to file the Certificate of Foreign LLC to the Illinois Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc., to the Illinois SOS to form your foreign LLC in the state of Illinois. To know more in detail, check out our guide on Illinois Foreign LLC.
Reasons to Start an LLC in Illinois
With the Gross State Product worth $336 Million, Illinois has gained a position in the Top 10 business states by Forbes. LLCs, in general, have a lot of benefits when it comes to business taxes. You, as an LLC, do not have to pay a lot of taxes like corporations. Apart from fewer tax liabilities, LLCs can have a business credit card to separate their personal and professional expenses. Other than the LLC filing fee paid to the state government agency, not much of the expenditure is involved in starting an LLC in the state of Illinois. Besides, with LLCs, you will enjoy personal asset protection, limited liability protection, and personal liability protection. With the feature of limited liability protection, startups get interested in starting an LLC.
Single-member LLCs are similar to sole proprietorships. Hence, single-member LLCs will have similar benefits as sole proprietorships in Illinois. In fact, these LLCs are taxed as sole proprietorships by default. On the other side, a multi-member LLC is similar to a traditional corporation, but it is less complicated. As you know, you can reduce personal liability with your limited liability company, it will also reduce the amount of business taxes. Business owners find it lucrative to start a business in Illinois as it offers potential customers.
In Illinois, the LLC start-up costs are much lesser than in other prominent states. There are incentives and business funding options by the government given to businesses such as any woman-owned business and all. These incentives help LLCs to cover annual costs and other costs to run a successful business. Some of the benefits are given below,
Reporting is made biennial by the government
Reporting any business by the government takes a considerably high time. It nearly disturbs the whole working set-up of a company, but if you have LLC located in Illinois, you don’t have to care about it much. Here the government has set the reporting of an LLC twice a year which makes it easy for the member, and above that, the fees are only around $32 if a person is filing the report online.
Continuous decreasing rates of Income-tax
In Illinois, the tax is only required to pay by the LLC members on their personal profits. This rate of personal income tax is meager, i.e., 3.23%. It means that the LLC profits don’t matter if your profit is 100,000 USD or 10,000,000, then the tax one member has to pay will be the same for all levels of people. Read more on Illinois’ classification of LLC Tax.
Hoosier Business Investment Tax Credit
The Hoosier Business Investment is an incentive-based program that is provided to the LLCs, mainly the start-ups. The main motive of this Tax credit is to provide some investment to the start-ups and support the task of job creation of the states through these LLCs. This will improve the financial status of the state and also the standard of living.
No sales taxes are applied
Many states impose sales taxes on their LLCs, like taking nickel and dime from members’ pockets. But in Illinois LLC, these taxes are not imposed on them, which means that they only have to pay the basic sales tax, which leaves them with plenty of money for hiring and research, and development.
Leading Businesses in Illinois
Are you looking to start an LLC in the state of Illinois? If yes, then you have to think of a good and profitable business idea. If you cannot figure out the best flourishing industry in Illinois, here is the best business.
The export business is thriving very well in Illinois state due to the state’s favorable rules and regulations. That is why more companies have started entering the field of exporting business. The state’s primary export product is machinery, chemical, and equipment used in transportation and agricultural processing.
The state has exported a material of 53,000 million dollars which shows the golden opportunity offered by this niche. So, don’t waste any time further and decide the product you want to export to the state.
Illinois is known worldwide, second in manufacturing food products and first in the construction business. The state has the most significant portion of countries manufacturing share of construction machinery, making the manufacturing business a fair choice. Chemicals used in the pharmaceutical industry are also made on a larger scale in the country.
Rocks found in Illinois State are known for being the best source of coal, minerals, and petroleum. According to the census, more than 8 billion tonnes of coal are produced in the state. Also, the amount of petroleum gained from this mining is around 4 billion barrels. These businesses are more than enough for a person to make up their mind regarding starting a mining business.
The state is a hose of 1500 different fertile soil types, which can help you grow any simple ornamental crop. If a person is interested in agriculture, they can also enter the business field and start farming-related businesses.
For a small investment business, here are some options.
- Restaurant and food business
- Departmental stores·
- Digital marketing services
Illinois LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Illinois. Click on the steps in this list to read the full detail.
- Name your Illinois LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Illinois, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services like NorthWest Registered Agent to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming a limited liability company in Illinois. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Illinois but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
Things to Consider While You Start an LLC in the State of Illinois
In this article, basic steps are explained in brief about how to start your LLC in the state of Illinois. However, there are a few basic things that one has to keep in mind while starting a business in Illinois. There are many professional services available that help you to form your LLC for free. You must know that it might be less costly, but not absolutely free.
As soon as your LLC is formed, you must consider a handful of things, such as deadlines. For example, upcoming filing deadlines, deadlines for tax filing, other government filings, and so on. You must be updated with the filings, especially government filings, to avoid late filings fees. If you are to file amendments, then you can hire professionals for amendment filings, as many professionals provide amendment filing services along with tax filing and such.
To form an LLC, along with filing fees, you must pay federal income taxes and some other business taxes. So, it is definitely not absolutely free. As you are about to start your LLC, you must have a business plan. Your business plan should have all requirements so that you can be prepared for all types of business challenges. As soon as you have a solid business plan, you can move further to bank applications for funding, etc.
In Illinois, women entrepreneurs or first-time entrepreneurs can enjoy more tax benefits than others. LLC is a simple business structure to start with. If you’re a new entrepreneur, it is more profitable for you to start an LLC than a traditional corporation. As soon as the LLC is set up, your company must be up-to-date with coverage for employees if you hire employees. On the other hand, file employment taxes for your professional employees.
In Illinois, there is no mandatory rule to submit an operating agreement. It was mentioned above. However, it is useful to have this operating document along with formation documents. You can read the operating agreement guide to know more about its importance. Professional formation service providers help you with the operating agreement templates. Operating agreements have the name and share of the manager, the authority of manager, and also the names and shares of initial managers.
To form an LLC, you can apply online/by mail. The online application takes less time than filing by mail or any other way. The entire process takes a day or two. With the LLC formation service providers and their excellent customer care service, it is even easier to start your LLC.
How Fast Can I Form an LLC in Illinois
You can get the application processed within 7-10 business days if filing online. However, in case of filing via mail, it usually takes 10-15 business days.
In Illinois, you can form an LLC within 10 business days. If you want to speed things up even further, you can file your LLC documents online. In addition to the Illinois Department of Revenue website, you can find checklists of the required forms and a guide for starting a business in Illinois. You should also consider hiring a registered agent to help you ensure the legality of your business. This service usually costs $100 to $150, but it can save you time and money in the long run.
Filing your articles of organization is easy, and the state of Illinois will review your business’s paperwork within two weeks. You can expedite this process by paying a $100 expedite fee. Afterward, you will receive a stamped copy of your documents. You can also hire an online legal service to help you file your documents and provide you with a free registered agent for one year. Remember to file an LLC operating agreement with the state of Illinois. This document is legally binding and will detail the management structure and duties of the LLC’s owners.
It is vital that you choose a name that will not conflict with another business in Illinois. The Illinois Secretary of State website has a database of available business names. You will also want to make sure the name you choose is available as a URL. Even if you don’t plan on creating a website right away, it’s a good idea to reserve a domain name so you can use it in the future.
If you choose to file documents via mail, you should expect it to take three to four weeks. However, if you file your documents online, you should expect to have your documents approved in seven to 10 business days. The state will then review the documents and send you an approval letter electronically or through the mail.
The filing fee for an LLC in Illinois is $150. You can also choose to file for expedited processing, which costs an additional $100. This option is available if you are a foreign entity operating in Illinois. The Illinois Department of State website has a fee schedule. You should also keep in mind that you need to file an annual report for your LLC.
When setting up an LLC, you must consider the type of management you want your business to have. Some Illinois LLCs are member-managed, while others are managed by an outside manager. If you’re not sure which option is right for your company, consult a qualified business accountant.
The process for forming an LLC in Illinois is relatively simple. The first step in the process is to choose the name of the company. Be sure to choose a name that is easy to remember, is available in the state, and follows the state’s LLC naming guidelines. You should also make sure that no other business is using the same name as yours, so do a name search using a name search website. You should also include the suffix “Limited Liability Company” to avoid confusion.
If you are a resident of Illinois, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $150 (domestic LLC) and $150 (foreign LLC), LLC costs in Illinois include $75 for Annual Reports every year. LLCs are liable to pay sales tax of 6.25% every year
It takes 10 business days to get an Illinois LLC if you file it online or via mail. If you hire a professional LLC service, then it might take less than that. We recommend TailorBrands, which has an impeccable turnaround time.
Every year all the LLCs have to submit an Annual Report and pay $75 to the Illinois Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for LLCs, it is a default tax structure. Once you obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Illinois Classification of LLC Tax.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups, can easily start an LLC located in Illinois at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.