How to Start an LLC in Illinois
Here are the 7 steps to start a limited liability company (LLC) in Illinois
For more information on how to form an LLC in any state, see the article How to Form an LLC.
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Learn about Illinois LLC formation, including information on Registered Agents, naming rules, business licenses, and more.
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Creating an LLC in Illinois
A limited liability company (LLC) offers many benefits to small businesses, including liability protection and tax advantages.
An Limited Liability Company LLC must be formed in Illinois you’ll need to file the Articles of Organization must be filed with the Illinois Secretary of State, which costs $150.
However, you’ll first need to choose a name and registered agent for your Illinois LLC . The formation of an LLC may take up to 3-4 weeks. The expedited service, which has a 24-hour turnaround time during regular business days, has an additional $100 fee.
An LLC can be easily formed in Illinois. Simply follow these seven steps, and you’re done. Find out more about LLCs and their benefits in our What is an LLC guide.
Step 1. Choose a Name for Your LLC Illinois
When starting a new LLC in Illinois, you’ll need to choose a name for your business before you can file a Certificate of Formation. Be sure that your business name complies with the Illinois naming requirements and can be searched by potential customers.
- When you establish an LLC in Illinois, you must choose a name for your company. Your company’s name must end with one of the following words: Limited Liability Company, L.L.C., or LLC. This is a requirement under Illinois law.
- If you’re looking for a catchy business name, you’ll want to avoid using words that are also used to name government agencies. For example, the State Department, CIA, FBI, and Treasury are all off-limits. If you’re not sure whether a word is off-limits or not, it’s best to play it safe and avoid it
- Certain restricted words (bank, lawyer, attorney, credit union, etc.) may require additional documentation and licensure paperwork
- There may be additional documentation and licensure paperwork required for certain restricted words (bank, lawyer, attorney, credit union, etc.).
- Check the state’s business name database to ensure the name you want is not already taken(including businesses no longer in operation)
See a complete list Illinois’ naming rules.
Check URL availability: You are likely to need a web page even if you don’t think you do. Buying your domain name now will at least give you the option of having one in the future. It’s a good idea to check the URL availability before finalizing your Illinois LLC name.
As an LLC in Illinois, you are required to register a DBA name if you are operating under a name other than your business’s legal name. Only LLCs in good standing can adopt an assumed name. You must register a fictitious name with the Illinois Division of Corporations in order to do so.
You can apply for a name reservation for up to 90 days by submitting an LLC-1.15 Application to Reserve a Name (Form). The filing fee is $25.
An LLC stands for a Limited Liability Company. A simple business structure that is more flexible and offers many of the same benefits as a traditional corporation. For more information, see “What is a Limited Liability Company?”.
Step 2: Appoint Your Registered Agent in Illinois
Your next step in forming an LLC in Illinois is to choose a Registered Agent, an individual or company authorized to receive legal and state mail on your behalf.
All Illinois LLCs must have a registered agent. Please include your registered agent’s name and address on your Certificate of Formation.
Registered Agent Requirements in Illinois
To comply with Illinois law, your LLC’s registered agent must be a resident or business entity that maintains a physical address in Illinois. The “registered address” cannot be a P.O. box. It must be a real physical address that can be visited in person.
There are a few things to keep in mind when appointing a registered agent:
1. The agent must be located in Illinois.
2. They must be available during business hours to accept notices.
3. You can designate yourself or another owner of the LLC as the registered agent.
Learn more about Illinois Registered Agents by reading our full guide.
Any owner or employee of a business can be its registered agent in Illinois as long as they are over the age of 18, and have a street address in Illinois. You could also choose to elect a member of your LLC, or even a friend you trust, as long as the person meets these requirements too.
Fill out a Statement of Change of Registered Agent and/or Registered Office with the Illinois Secretary of State to change your registered agent.
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Wise Business Plans offers a free year of registered agent service when forming an LLC in Illinois.
Step 3.Prepare and File Certificate of Formation
To create a Illinois LLC, you will need to file Form LLC-5.5- Articles of Organization with the Illinois Division of Corporations. You may apply online, by mail, or in person.
If you choose one of our business formation services, we can handle this step for you.
The following information is typically required to create a Certificate of Formation:
- Your LLC name and principal place of business.
- Name, address, and signature of the LLC’s registered agent
Effective date of the LLC (can’t be more than 8-9 weeks after filing articles).
- Decide whether your Illinois LLC will be member-managed or manager-managed. Indicate the names and addresses of each member and manager.
- The reason for forming the LLC in Illinois.
- Name and address of the LLC’s organizer.
- The effective date of the certificate,
- The certificate must be signed by the person forming the LLC.
Foreign LLCs: LLCs that are based in another state but intend to conduct business in Illinois must complete a form called the Qualification of Foreign LLC.
A filing fee of $150 also applies to this form, and you need to attach your state’s certificate of good standing.
Two Ways to File the Certificate of Formation
The 1st option is:
Online filing through the Cyberdrive Illinois
The 2nd option is:
Filing the LLC-5.5 Form by Mail
There is a state filing fee of $150 payable to the Secretary of State. (nonrefundable)
Address to Mail
Department of Business Services
Limited Liability Division
501 S. Second St., Rm. 351
Springfield, IL 62746
A member-managed LLC means all of the members share in the management of the LLC. A manager-managed LLC means the members appoint someone (LLC member or non-member) to run the business.
An LLC established in Illinois is a domestic LLC. A foreign LLC is an entity type with a physical presence in another state.
It might take 3-4 weeks for an LLC to be authorized in Illinois, but one-day processing is available for an extra fee.
Step 4. Get a Certificate From the State
Upon filing your Certificate of Formation, the secretary of state will review it. As soon as the Certificate of Formation is approved, the LLC becomes a legal entity.
By obtaining this certificate, LLCs will be able to obtain an Employer Identification Number (EIN), licenses, and business accounts.
Step 5. Write an Illinois LLC Operating Agreement
An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.
This document can be helpful in clarifying the roles and responsibilities of the members of the LLC, as well as setting out how the company will be operated.
An operating agreement can also help to protect the members of an LLC from personal liability.
The LLC declaration can prove that your LLC is a separate entity, which can help preserve your limited liability.
An operating agreement ensures that all business owners are on the same page and reduces the possibility of future conflict.
How should an operating agreement be drafted?
The operating agreement should detail the LLC’s overall business purpose and other important matters, such as how the company will be taxed and how new members will be accepted. Legal agreements can clarify several important concerns, such as:
- Who makes decisions for the company, especially those who decide if partners disagree.
- Who is responsible for different aspects of the business as well as for strategic decisions.
- If a partner leaves the company, what will happen to their ownership interests in the corporation.
- The members and their contributions
- How profits and losses will be divided
- Procedures for admitting new members and removing outgoing members
In Illinois, you can include just about anything in your operating agreement, as long as it doesn’t violate the state law or the Certificate of Formation.
An operating agreement is appropriate for any size company. It enables members to specify operational procedures and policies in writing. Although LLCs in Illinois are not required to file an operating agreement with the state, it is still recommended that one be created.
No. Because an Illinois operating agreement is a corporate document, it does not need to be submitted to the state. Illinois statute 805 ILCS 180/1-40, on the other hand, requires your LLC to maintain any current operational agreement in place at its headquarters or another location specified in the arrangement.
Step 6. Get an EIN for Your Illinois LLC
Basically, an employer identification number (EIN) is a social security number for your LLC in Illinois.
To identify your LLC for tax purposes, the Internal Revenue Service assigns a nine-digit Employer Identification Number (EIN). You can apply for your EIN either by mail or online.
An EIN is used for the following purposes:
- Manage state and federal taxes
- Create a business bank account
- Hire employees
Get an EIN Number in Illinois
Getting an EIN number is easy and free, There are two ways to get an EIN number in Illinois.
The 1st option is:
Apply online for an EIN from the IRS
The 2nd option is:
Get an EIN by Mail or Fax
Address to Mail
Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
A Federal Employer Identification Number (FEIN) is not required for every type of business. … If you’re a single-member LLC and don’t have a FEIN, you’ll need to file the paper version of Form REG-1, the Illinois Business Registration Application.
When you apply for an EIN, you will be told about the many tax classifications available. The default tax status is most often selected by LLCs. However, by selecting the S corporation (S corp) status, some LLCs may reduce their federal tax liability.
Step 7. Filing Annual Reports with the Illinois Secretary of State
If you’re an LLC doing business in Illinois, you must file an annual report with the Secretary of State. The report is due each year prior to the first day of your LLC’s anniversary month.
For Example, If your LLC was created on July 15, then your annual report would be due by July 1. You can file the report online or by mail with Form LLC-50.1. The filing fee is $75.
The report is due regardless of whether your LLC is active or inactive.Filing a report late (more than 60 days after the due date) incurs an additional $100 penalty.
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What to do After Forming Your Illinois LLC
Keep your personal and business assets separate
Your personal assets (such as your home, car, and other valuables) may be at risk when your Illinois LLC is sued if they are mixed with your business accounts.
Here are some steps you can take to protect your LLC in Illinois:
1. Create a Business Plan:
If you have decided that a Illinois LLC will be a good choice for your business in Illinois, your next step is to create a business plan (although it is not required), so that you have a roadmap for what you will do and how you will accomplish it.
Free: Business Plans Examples
Do you need help creating a business plan? Check out these six free, proven business plan examples from different industries to help you write your own.
2. Open a Bank Account
As soon as your LLC is officially formed, you should open a business bank account. Why? Keeping separate bank accounts will help you maintain the legal distinction between the LLC and you (the owner).
Because LLCs are limited liability companies, creditors and litigants can’t take your assets.
It is essential for small business owners to partner with the right bank.
Recommended: Check out our business bank account page to learn which banks offer the best business check accounts, ATM access, interest-bearing accounts, and online and mobile banking options for businesses.
3. Obtaining a business credit card:
- Allows you to separate personal and business expenses.
- Develops your company’s credit history, which can be helpful to raise capital (e.g., small business loans) later.
4. Hiring a business accountant:
- It prevents your business from overpaying taxes while preventing penalties, fines, and other costly tax mistakes.
- Gives you more time to focus on your growing business by simplifying bookkeeping and payroll.
- Manage your business’s funding more effectively. Find out where extra profit or loss can be made
Getting Business Insurance for Your LLC
You can manage risks and grow your LLC with business insurance. Here are the most common types:
- General liability insurance protects your business from lawsuits. Most small businesses purchase general liability coverage.
- Professional liability insurance protects professionals and businesses from claims of negligence from their clients or customers. Liability insurance typically covers negligence, copyright infringement, personal injury, and more.
- Workers’ compensation insurance: Covers illnesses, injuries, and deaths resulting from a worker’s work.
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- General business liability insurance
- Medical insurance
- Term life insurance
- Workers’ Comp
- Surety bonds
- Commercial auto
Illinois LLC FAQs
The filing fee for articles of organization in Illinois is $150, which is the most significant step toward creating an LLC there. You can submit your papers by mail or online for faster processing.
Whether you are just starting a business or have already been running it as a sole proprietor, you should consider forming an LLC. An LLC (limited liability company) in Illinois is advantageous since it provides the same limited liability as a corporation, but with less formality in its formation and operation.
To dissolve an LLC in Illinois, you must complete Form LLC-35-15, Statement of Termination, and submit it with a filing fee to the Illinois Secretary of State by mail or in person.
Changes to a domestic limited liability company’s name may only be file online. Articles of Amendment that seek to make any other modifications must be submitted using LLC-5.25. Learn more about how to change a business name here,
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