Did you know that LLCs make up 71.7% of all partnership returns filed in the U.S.? If you're thinking about starting an LLC in Illinois, you'll join a business structure that has grown for 20 years in a row.
To start an LLC in Illinois, you'll follow a clear process with set costs: $150 to register with the state at first and $75 each year to maintain it. It takes 5-10 business days to process online filings and 7-14 days for mailed ones. But if you need to set up your LLC fast, you can pay an extra $100 for 24-hour processing.
What's behind the surge of entrepreneurs setting up LLCs in Illinois? It's clear that LLCs have become a big deal - they accounted for 25.5% of all partnership profits in 2021 jumping up 23.1% from 2019. Plus, the way you can run an LLC - either with members managing or by picking specific managers - makes it a go-to choice for many business owners.
This guide will show you the five key steps to meet all the Illinois LLC filing rules, from picking a name that follows the rules (it has to include "Limited Liability Company," "LLC," or "L.L.C.") to staying on top of your ongoing tax duties with the state.
Step 1: Pick a Name for Your LLC
Picking the right name for your Illinois LLC takes some thought and understanding of state rules. Unlike naming a pet, your company name must follow certain legal guidelines while also showcasing your brand well.
See if your name is free to use in Illinois
Before you get too attached to a business name, check if it's available through the Illinois Secretary of State's Business Entity Search tool. This online database shows if another business is already using the name you want. Also, you can ask for a quick check by sending in a Name Availability Inquiry Form, which lets you check up to three possible names at once.
To get a definite answer, ring up the Secretary of State's Department of Business Services at 217-524-8008. While searching online can help, it's a good idea to check by phone even if the name looks free in the system.
Keep in mind that when an LLC is shut down by the state, its name stays off-limits for three years after the shutdown notice. This means you need to do your homework before you start setting up your LLC.
Know the rules and limits for naming
Illinois law sets out some must-follow rules for LLC names:
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Your company name needs to have "Limited Liability Company," "LLC," or "L.L.C." (or "L3C" for low-profit LLCs)
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Names can't include words like "Corporation," "Corp.," "Incorporated," "Inc.," "Ltd.," "Co.," "Limited Partnership," or "L.P."
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Your name must stand out from other business entities already registered in Illinois
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Names can use English alphabet letters Arabic or Roman numbers, and symbols that the Secretary of State can reproduce
Keep in mind, some words have extra rules. You need special permission from the Secretary of Financial and Professional Regulation to use words like "trust," "trustee," "fiduciary," "bank," "banker," or "banking." Also, your LLC name can't suggest anything that's in poor taste or indecent.
Your name has to be different from other business names out there. Just changing small words using different forms of the same word, or abbreviating won't make your name stand out enough.
Reserve your LLC name (optional)
After you've found a name that's available, you have two choices: start your LLC right away or save the name to use later. If you're not ready to set up your business yet, you can hold your chosen name for 90 days. To do this, you need to file Form LLC-1.15 (Application to Reserve a Name) with the Illinois Secretary of State.
The reservation costs $25.00, and you should make your check out to the Secretary of State. You'll have to mail or bring two copies of the filled-out form to the Secretary of State's office in Springfield. It takes 7-10 business days to process.
If you need quicker processing, you can get 24-hour rush service for an extra $50.00, but you must bring your forms and payment in person.
You can cancel your reservation anytime for a $5.00 charge or give it to someone else for $25.00 if your plans change. Keep in mind that transferring doesn't make the original 90-day reservation last longer.
You don't have to reserve a name, but it's helpful if you've got a special name in mind but aren't ready to set up your LLC right away.
Step 2: Choose a Registered Agent
Once you've picked a name for your Illinois LLC, your next big task is to choose a registered agent. This person or company acts as your official contact for legal papers, including lawsuits, tax notices, and letters from the Illinois Secretary of State. Having a registered agent makes sure your business doesn't miss any key legal or government messages.
Who can be a registered agent in Illinois
Illinois law sets clear rules about who can be your LLC's registered agent. Your registered agent has to be either:
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A person who lives in Illinois and is at least 18 years old
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A business (from Illinois or another state) that's allowed to operate in Illinois
The registered agent needs to have a physical street address in Illinois—you can't just use a P.O. box. This address becomes your company's registered office where the agent should be available during normal business hours (9 AM to 5 PM, Monday through Friday).
You can choose yourself, a coworker, business partner, friend, or family member as your agent—as long as they meet these rules. Just keep in mind that the registered agent's name and address will be public information.
Using a professional registered agent service
Instead of being their own agent or picking someone they know many Illinois business owners go for professional registered agent services. These commercial services charge between $49 and $300 per year.
Using a professional service has many real-world benefits:
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Privacy protection: Public records show the service's address instead of your personal or business address
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Reliable availability: These services keep staff at their office during business hours, so you don't miss documents because of vacations, sickness, or other reasons you're away
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Professionalism: Getting legal papers (lawsuits) at work can be awkward when clients, employees, or family are around
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Quick handling: Professional agents scan and send important documents fast helping you meet deadlines for urgent legal matters
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Compliance help: Many services also remind you about annual reports and other state filing requirements to keep you on track
Why a registered agent is required
Illinois law requires every LLC to have and keep a registered agent—you can't skip this step. The Illinois Business Corporation Act of 1983 set up this rule for a few key reasons:
First registered agents give the public and government offices a reliable way to get in touch with your business. This keeps things open and holds businesses accountable.
Second having a set agent makes sure important legal papers get delivered . If someone sues you and you don't answer , the court might rule against your company even if you didn't know about the lawsuit.
Keeping a registered agent is essential to maintain your LLC's good standing with the state. If you don't have one, your LLC could face administrative dissolution, which would end your business entity's existence and take away your liability protection.
You'll choose your registered agent when you file your Articles of Organization (we'll cover this in Step 3), and you'll need to update this information each year when you file your LLC's annual report. If you need to change your agent after you've formed your LLC, you can submit a Statement of Change of Registered Agent And/Or Registered Office form to the Secretary of State and pay a $25 fee.
Step 3: File Articles of Organization
Submitting your Articles of Organization sets up your LLC in Illinois. This key document forms your business entity and gives you the protections and perks of the LLC structure.
What information you need to provide
The Illinois Secretary of State asks for certain details in your Articles of Organization (Form LLC-5.5):
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The name of your LLC (including "Limited Liability Company," "LLC," or "L.L.C.")
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Address of the main business location
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Date it takes effect (filing date or up to 60 days after filing)
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Name of the registered agent and address of the registered office
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Purpose of the LLC (general or specific)
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How long it will last ("perpetual" unless you say otherwise)
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How it's run (by managers or by members)
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Names and work addresses of all managers and any members who can act as managers
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Names and addresses of people starting the LLC (must be at least 18 years old or a business)
Everyone who's starting the LLC needs to sign the Articles of Organization. The Department of Business Services thinks it's a good idea to have a lawyer look over all the paperwork before you send it in.
How to file online to get same-day processing
You can form your Illinois LLC quickest through the Secretary of State's online filing system. Your LLC must meet these requirements to file online:
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It can't be formed in another state or jurisdiction
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It can't need specific purpose provisions
You have a few choices to get your LLC processed right away:
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Standard online filing: Send your Articles of Organization through the Illinois Secretary of State website. The process takes up to 10 business days.
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24-hour expedited service: Pay $100 more to get approval the next day.
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Same-day processing: Use a third-party walk-in service to hand-deliver your documents to the Secretary of State. Some services offer to process on the same day if you submit your documents before 10:00 AM.
After approval, you'll get your filing confirmation by email.
Illinois LLC filing fee and payment options
The regular filing fee to submit Illinois Articles of Organization comes to $150 for standard processing (takes 10 business days). If you need fast 24-hour service, you'll pay $250 in total.
When you set up a Series LLC (a structure that can create separate "series" within itself), the fee goes up to $400 for standard processing or $500 for quick service.
For online submissions, the Secretary of State takes:
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Credit cards (Visa, Mastercard, Discover, or American Express)
Keep in mind that all transactions have a payment processor fee. It's best not to use debit cards.
For mail submissions, you need to pay by:
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Certified check
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Money order
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Check from an Illinois attorney or certified public accountant
Make all payments to the "Illinois Secretary of State".
Step 4: Create an Operating Agreement
After you form your Illinois LLC, you should focus on creating an operating agreement. Even though Illinois law doesn't require this document under Section 15-5 of the Illinois LLC Act, not having one could cause big problems for your business.
Why an operating agreement has importance
An operating agreement acts as the rulebook for your LLC setting up how your business will run. Without one, your LLC follows Illinois' default rules, which might not match your planned business structure. Also, this document boosts your liability protection by separating your business and personal assets, which helps stop courts from "piercing the corporate veil" in legal battles.
Besides liability protection, a well-written operating agreement helps avoid internal fights by clearly spelling out decision-making power and operational duties. Many banks need to see this document before they let you open a business bank account.
What to include in your agreement
Your Illinois LLC operating agreement should have several key parts:
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Basic company info - Name when it started, what it does, and who represents it legally
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Who owns what - Names of members and how much each owns
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Money put in - How much each member invested at the start
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How it's run - Whether members or managers make decisions
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How voting works - The way decisions are made and votes are split up
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Sharing profits and losses - When and how the company shares its money
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Changes in membership - Steps to take when adding or removing members
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Closing shop - The process to shut down the business
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Changing the rules - How to update the agreement
Should single-member LLCs have one?
Even one-person LLCs need an operating agreement. This document becomes more important when you're the only owner. It backs up your limited liability status by showing your business is separate from you . Also, banks often want to see this document no matter how many members you have.
For a single owner, your operating agreement works as a statement of your chosen business setup. Besides what institutions require, this document spells out what happens if you can't run the business anymore. It includes rules for what happens to the company if you die or leave.
Once you've written your operating agreement, get all members to sign it, give everyone a copy, and keep the original with your company files. Unlike your Articles of Organization, this document is for internal use and doesn't need to be sent to the state.
Step 5: Obtain an EIN and Sign Up for Taxes
The last step in setting up your Illinois LLC involves getting your tax ID numbers and meeting your tax obligations. Finishing these tasks lets your business run and stay clear of possible fines.
How to get an EIN from the IRS
An Employer Identification Number (EIN) acts as your business's "social security number," identifying your LLC to the IRS. The quickest way to get an EIN is through the IRS online application system, which gives out numbers right after you finish. This free service takes about 15 minutes.
You can also apply by:
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Fax (it takes about four business days to process)
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Mail (it takes around four weeks to process)
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Phone (for international applicants)
The IRS allows one EIN per responsible party each day. Single-member LLCs don't need an EIN if they have no employees; however, you'll still need one to open business bank accounts and to get business loans.
Registering with the Illinois Department of Revenue
Once you've got your EIN, you need to sign up with the Illinois Department of Revenue (IDOR). You can do this in three ways:
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Online: Use MyTax Illinois, which takes 1-2 business days to process
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By mail: Send in Form REG-1, which takes 4-6 weeks to handle
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In person: Go to an IDOR office to get help
Sales tax, employment tax, and other duties
If your LLC sells stuff, you'll have to collect Illinois sales tax at the basic rate of 6.25%. To register, fill out the Illinois Business Registration Application and the Illinois Business Site Location Information form.
LLCs with workers have several tax duties:
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Withholding taxes: Sign up with IDOR and pay (twice a week or monthly)
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Unemployment insurance: Join the Illinois Department of Employment Security; rates go from 0.525% to 7.1%
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Workers' compensation: Most LLCs with staff need this
Don't forget to tell the Department of Employment Security about new workers within 20 days. When you follow these rules, your Illinois LLC will stay in good shape with both U.S. and state tax offices.
To wrap up
Setting up an LLC in Illinois is pretty simple, but you need to pay attention and follow state rules. In this guide, we've covered the five key steps to set up your business the right way.
First, picking a unique name that follows Illinois rules lays the groundwork. Next, choosing a trustworthy registered agent makes sure you get all important legal messages. Filing your Articles of Organization creates your LLC, while drafting an operating agreement, though not required by law, offers key protection and clarity on how to run things. , getting your EIN and signing up for the right taxes finishes your legal duties.
Keep in mind that the $150 fee to start and the $75 yearly report fee are small costs compared to the big perks LLCs offer. No doubt, the freedom in how you manage things protection from liability, and tax benefits make this type of business more and more popular with new business owners.
The typical 5-10 business day processing time suits most cases. However, if you need to set up your business faster, you can pay an extra $100 for the quick 24-hour service. This option helps when you're in a hurry to start your business.
If you follow these steps , your Illinois LLC will have a strong legal foundation from the start. Getting these requirements right lets you turn your attention to what counts – growing your business with a clear mind and feeling sure about your choices.
FAQ
The quickest way is to file online and pay $100 more for fast processing. This leads to approval within 24 hours during normal work hours.
It takes 5-10 business days to process online filings, while mail filings need 7-14 business days. You can get 24-hour processing if you pay extra.
You'll pay $150 as the basic filing fee. If you want 24-hour processing, you need to add $100 more, which makes the total $250.
The law doesn't mandate an operating agreement for Illinois LLCs, but having one is a smart move even for single-member LLCs. It helps you set up your business structure safeguard your limited liability status, and banks often need it to open business accounts.
Once you get an EIN from the IRS, you need to sign up with the Illinois Department of Revenue. If you're selling goods, you must register for sales tax. LLCs with workers should also sign up for withholding taxes and unemployment insurance with the right state departments.