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 in Illinois. On this page, You’ll find all the steps that must be taken to ensure that your Illinois LLC has been correctly established. 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 in Illinois, 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 Illinois 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 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.
Illinois LLC Naming Guidelines
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
Idaho 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.
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Tailor Brands – ($49 + State Fees) Online LLC Setup
Tailor Brands 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 Tailor Brands, 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 Illinois LLC 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. 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 Illinois 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 Illinois LLC registration, 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 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 –
Tailor Brands – ($49 + State Fees) Online LLC Setup
Step 4: Create Your Illinois LLC Operating Agreement
Moving on to the fourth step, filing your operating agreement. An operating agreement is a 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 –
Tailor Brands – ($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 –
Tailor Brands – ($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 Illinois LLC. 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 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
- File Illinois business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees
- 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.
Cost of Illinois LLC
Forming an LLC in Illinois 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 Illinois LLC. LLCs have pass-through taxation. Hence, your Illinois LLC won’t bring you a massive tax burden. Here are some of the fees and taxes are needed to be paid while forming an LLC in 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 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 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 any federal taxes. 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 to start an LLC in Illinois.
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 of 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 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 the 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 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 an LLC 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.
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.
If you are wondering, “How Fast Can I Form an LLC in Illinois?” you’ve come to the right place. There are many benefits of filing your LLC online. First, filing online allows you to get your certificate much faster than filing in person. The filing process usually takes a few days, though expedited filing is also possible. Additionally, filing your LLC online will let you retrieve your documents for free for 30 days.
There are several requirements for forming an LLC in Illinois. For one, you must file for business licenses, permits, and taxes. You can do this yourself or hire an attorney to create these documents for you. Second, you’ll need articles of organization, an EIN, a fictitious business name statement, an ownership agreement, and a business license. Finally, you’ll need a business bank account and operating agreements. It’s a good idea to compare different banks so you can choose one that suits your needs. Also, make sure you consider how much they charge for filing and service.
In addition to the LLC name and address, every LLC in Illinois must designate a registered agent. The registered agent is responsible for accepting and delivering official correspondence. If the LLC fails to do this, you’re likely to run into legal issues later on. The registered agent must also be a resident of Illinois and have a physical address in Illinois. Third-party registered agents are a good choice, but you can also choose a family member or friend to serve as the registered agent.
In order to avoid delays, you should follow the filing deadlines. The state will require you to file annual reports on time, and a failure to do so will result in your business becoming “delinquent.” Additionally, you must register your LLC as a foreign company in your home state if you want to conduct business in that state. You can use an online service to do this. The state will send you an email notification with the due date, and you can also get your documents electronically if you wish to.
If you decide to use a reserved name for your LLC, you can reserve the name for up to 90 days. Once your LLC name is reserved, you can file for it online or mail it. The state also requires that you select a registered agent, which is the person or entity designated by your business to receive legal documents and serve as the company’s official correspondence. For a filing to be successful, you should file a filing fee of $150.
If you don’t have a legal team to help you, an online resource exists that can guide you through the process. You can even get started on the operating agreement and create a legal structure for your company. The operating agreement provides the framework that you need to establish your LLC, and is also known as your company’s bylaws. An operating agreement is vital to your business’s success because it legitimizes your business and protects your personal assets.
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 Tailor Brands which has 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 the LLCs, it is a default tax structure. Once you will 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 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.