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How to Form an LLC in Illinois
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Affordable investment starting at $99 to set up your limited liability protection.
This guide to starting an LLC in Illinois provides step-by-step instructions on filing formation documents, obtaining tax IDs, and setting up company records.
Overview
LLCs are the most popular business structure because they are inexpensive to form, provide flexibility to the owners, and are easy to run. Forming your LLC legally establishes your business, limits your personal liability, and gains tax flexibility. The following step-by-step will help you as you undertake this process.
Fast Facts: Your Budget and Timeline
Here is an overview of the total paperwork, cost, and time it takes to form an LLC in Illinois. Be sure to read the final step in this guide - "Ongoing Filings" - to understand your ongoing costs to maintain a compliant Illinois LLC.
- Form LLC-5.5: Illinois Limited Liability Company Act Articles of Organization
- Operating Agreement
- IRS Form SS-4: Obtain an EIN
- Form REG-1: Illinois Business Registration Application
- FinCEN Beneficial Ownership Report
- Formation: $500 + optional $100 expedite fee
- Illinois business registration: state fee varies depending on tax accounts needed
- Formation: Immediately online. ~2 weeks by mail or fax. ~1 business days with $100 expedite fee.
Step-by-Step Illinois LLC Instructions
Warning
Illinois LLCs must pay a $250 Secretary of State annual report fee every year by the anniversary of their formation.
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Check Name Availability
The legal name of your LLC may not conflict with any other registered name. Check availability of your desired name by conducting a name search.
Name Search: Illinois Secretary of State - Business Services Department
Name searchName Reservation: Optional Suffix: Shall contain the terms "limited liability company", "L.L.C.", or "LLC", or, if organized as a low-profit limited liability company under Section 1-26 of this Act, shall contain the term "L3C". Shall consist of letters of the English alphabet, Arabic or Roman numerals, or symbols capable of being readily reproduced by the Office of the Secretary of State; shall be the name under which the limited liability company transacts business in this State unless the limited liability company also elects to adopt an assumed name or names as provided in this Act; shall contain the word "trust", if it is a limited liability company organized for the purpose of accepting and executing trusts.
805 ILCS §180/1-10 -
Appoint a Registered Agent
Before you officially file to create your Illinois LLC, you will need to decide who your Illinois registered agent will be. A registered agent is a business's legal appointee to receive notice of lawsuit and other legal or government notices.
State law requires every LLC to have a registered agent. The registered agent is designated when you file Illinois articles of organization with the Illinois Secretary of State - Business Services Department.
Our reliable registered agent service fulfills this requirement. You get:
- Same-day documents from our local office in Springfield
- Immediate online access to state forms with our address and, where required, our signature
- Annual fees from $89 to $99 per state with no additional charges
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File Illinois Certificate of Formation
File the articles of organization to create your limited liability company.
Agency: Illinois Secretary of State - Business Services Department Form: Instructions: Pub c334: A Guide for Organizing Domestic Limited Liability Companies
Filing Method: Mail, fax (only if you have a prepaid account), or online
Agency Fee: $150 + optional $100 expedite fee. The expedite fee is required if you file online.
Turnaround: ~2 weeks by mail or fax. ~1 business days with $100 expedite fee.
Law: Notes: - When you file by mail you must submit the original articles with signatures in black ink and one copy.
- In addition to a traditional LLC, Illinois offer a Series LLC and L3C. They each have special formation requirements.
- When you file online, you may return to the Secretary of State’s Web site after 24 hours and retrieve a copy of the document at no extra charge for a period of 30 days.
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Establish Company Records
Your LLC must keep correct and complete books and records. Your filed articles of organization are the first documents for your LLC’s records. Your LLC will generate many other official records such as:
- Meeting minutes
- Operating agreement
- EIN verification letter
- Amendments and other filings made to the LLC throughout its lifetime
Organizations need a secure, centralized tool for managing and accessing sensitive records. Our Records Manager software offers a simple, efficient way for LLCs to store records, track members and managers, and customize meeting notifications.
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Create the Operating Agreement
Draft an Operating Agreement (potentially using a template) which is the governing document for the LLC. It defines the formalities of how the LLC will run itself such as holding an annual meeting. You will review and adopt the agreement at your organizational meeting.
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Hold the Organizational Meeting
The first meeting of the members of the LLC is the organizational meeting. You will need your filed articles of organization and your operating agreement in order to conduct this meeting. Keep minutes of this meeting and store them in your company record book.
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Get a Federal Employer Identification Number (EIN)
If your LLC has more than one member or will hire employees, it must obtain an EIN. An EIN is also often required to open a bank account.
Agency: Internal Revenue Service (IRS) Form: Instructions: Applying for an EIN without a SSN/TIN:
- Online applications are not accepted if an individual does not have a SSN/TIN.
- Form SS-4 must be completed, signed, and faxed to the IRS, leaving the SSN/TIN field blank or adding the terminology "foreign" to that line item.
- To follow up on the application, call the IRS and ensure they received the application.
- Depending on the agent you speak with, you may be able to obtain the EIN over the phone. The IRS may then fax the EIN documentation back to you.
Filing Method: Mail, phone, fax, or online.
IRS fee: $0
Turnaround: Immediately online or by phone. 4 business days by fax. 4-5 weeks by mail.
Notes: The IRS website is only available during certain hours. Print your EIN before closing your session. For additional guidance, see IRS Pub 1635: Understanding Your EIN.
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Get Illinois State Tax Identification Numbers/Accounts
Illinois offers a consolidated state tax registration application.
- Submit to:
- Illinois Department of Revenue
http://www.revenue.state.il.us/ - Form:
- Form REG-1: Illinois Business Registration Application
- Filing Method:
- Mail or online
- Fee:
- State fee varies depending on tax accounts needed
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Report Beneficial Ownership Information to FinCEN
As of January 1, 2024, millions of entities in the US need to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) as part of the Corporate Transparency Act (CTA). LLCs formed before that date must submit BOI before January 1, 2025, while those formed after must submit it within 30 days of formation.
Our BOI reporting service completes the initial filing and provides support for updating your information going forward. We will:
- Submit your beneficial ownership filings to FinCEN
- Handle initial filing, updates, and changes as needed
- Ensure compliance with BOI reporting requirements for $149 per year
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Consider Electing S-Corp or C-Corp Taxation
By default, your LLC receives pass-through taxation and the vast majority of LLCs keep this tax classification. Some LLCs benefit from electing S-Corp or C-Corp tax treatment:
- S-Corp treatment can help owner-employees who earn more than ~$75,000 per year save on self-employment taxes. File Form 2553: S-Corp Election.
- C-Corps suffer from double taxation: the corporation pays taxes on profits then members pay taxes on their distributions. If profits exceed $250,000 per owner, you provide employee benefits, or you will re-invest most of your profit in the business, you may benefit from the low tax rates on retained earnings under C-Corp treatment. File Form 8832: C-Corp Election.
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Obtain Business Licenses & Permits
To run your business legally, you must obtain applicable licenses and permits. The easiest way to navigate the wide range of federal, state, and local requirements is to search by your business type and locality using the Small Business Administration Business License & Permit look-up tool.
Illinois Business License
Not required
General Business License licensure is not required on the State level in Illinois.
Illinois does not have a general business license at the state level, but local licenses are often required.
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Ongoing Filings to Maintain Your LLC
You must file federal and state tax returns.
Many states also require business entities to file an annual report to maintain good standing with the secretary of state. If an annual report is required for LLCs formed in Illinois, view the table below.
Domestic
Agency: Illinois Secretary of State - Business Services Department Form: Filing Method: Mail or online.
Agency Fee: - $75 annual report fee + franchise tax (varies) +$1.69 transaction fee
- An additional $5 fee applies if the entity needs to report changes in issued shares or paid-in capital. Another $25 fee applies if the entity is a publicly held corporation with outstanding shares listed on a major U.S. stock exchange and has its principal executive office located in Illinois.
Due: Annually by the end of the month prior to the registration anniversary month. So if you incorporated on February 14th, then your annual report is due January 31. Reports may be filed up to 60 days prior to the start of the anniversary month.
Law: Penalties: Late fee is calculated based on franchise tax due.
Notes: - The report must be signed by an officer named in the report.
- You must submit original signatures.
- Changing your registered agent requires submitting a separate form.
Required Attachments: - Entities required to file form EEO-1 must attach section D of their EEO-1 with their annual report filing.
- Form 8.12: Female And Minority Directors Report if the entity is a publicly held corporation with outstanding shares listed on a major U.S. stock exchange and has its principal executive office located in Illinois
- Form 14.30: Cumulative Report of Changes in Issued Shares and Paid in Capital if the reported authorized shares or paid-in capital differ from the Secretary of State’s records.
For more details, see our Illinois annual report information center page.
As your LLC grows, you will need to demonstrate your company’s good standing to banks, customers, and other state agencies. After all the work involved in forming your Illinois LLC, don’t let a missed annual report filing cause your new business to fall out of compliance.
Tracking and filing annual reports on your own can be time consuming and lead to accidental lapses. Protect your LLC’s good standing with Managed Annual Report Service, which tracks and automatically files reports on time, every time, so you can focus on your business.
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