Starting an Illinois LLC, step-by-step
Starting an Illinois LLC costs $150. And it takes 10 days to get an LLC in Illinois.
Here are the 6 steps to forming an LLC in Illinois:
- Choose an LLC Name
- Select a Registered Agent
- File Articles of Organization
- Create an Operating Agreement
- Get an EIN
- Register with the Department of Revenue
If you want to form your LLC yourself, follow our free guide below.
If you want someone to take care of it for you, we recommend hiring Northwest Registered Agent
(We recommend Northwest. We've reviewed all the top companies in the industry. And Northwest is our #1 pick for prices, customer support, and address privacy. Check out Northwest vs LegalZoom to learn more.)
How much does it cost to start an LLC in Illinois?
It costs $150 to start an LLC in Illinois.
And then it costs $75 per year.
What are these fees for?
- The $150 is to file the Articles of Organization – the document that creates an LLC.
- The $75 per year is for your Annual Report – a mandatory filing that keeps your LLC in good standing.
To learn more about LLC Costs, see LLC Costs in Illinois.
How long does it take to get an LLC in Illinois?
If you file your LLC by mail, it will be approved in 7-14 business days (plus mail time).
But if you file online, your LLC will be approved in 7-14 business days (plus mail time).
Please see How long does it take to get an LLC in Illinois to check for any delays.
Here are the steps to forming an LLC in Illinois
1. Search your LLC Name
Search your Illinois LLC Name to make sure it’s available in the state.
You need to do this because two businesses in the state can’t have the same name.
First, search your business name and compare it to existing businesses in Illinois. You can make sure the LLC Name you want is unique from existing businesses using the Department of Business Services’ Business Entity Search.
Second, familiarize yourself with the naming rules in Illinois (so your Illinois LLC gets approved).
We’ll explain both in more detail here: Illinois LLC Name.
2. Choose an Illinois Registered Agent
The next step is to choose an Illinois Registered Agent.
An Illinois Registered Agent is a person or company who accepts legal documents and state notices on behalf of your Illinois Limited Liability Company.
Who can be an LLC Registered Agent?
You have 3 options for who can be the Registered Agent:
- A friend or family member
- A Registered Agent Service
Illinois law requires LLC Registered Agents to have a physical street address in Illinois. PO Boxes aren’t allowed.
And the Registered Agent’s name and address will be listed on public records.
If you don’t have an address in Illinois, or you want more privacy, you can hire a Registered Agent Service for your LLC.
We recommend Northwest Registered Agent
Our favorite feature about Northwest is they’ll let you use their office address throughout your LLC filing. This way, you can keep your address off public records.
They’ll also scan any mail sent to your LLC and upload it to your online account.
Northwest has excellent customer service, and they’re who we trust to be our own Registered Agent.
3. File Illinois LLC Articles of Organization
To start an LLC, you need to file the Illinois Articles of Organization.
This gets filed with the Illinois Secretary of State.
The Illinois Articles of Organization costs $150 if you file online.
This is a one-time fee to create your LLC.
If you want to file this yourself, see our step-by-step guide: Illinois Articles of Organization.
Or, you can hire a company to do it for you.
4. Create an Illinois LLC Operating Agreement
An Illinois LLC Operating Agreement serves as a “companion” document to the Articles of Organization.
The Articles of Organization creates your LLC, and the Operating Agreement shows who owns the LLC.
Additionally, some banks require an Operating Agreement when you open an LLC bank account.
And having an Operating Agreement will be very helpful if you ever end up in court. Reason being, it helps prove that your LLC is being run properly.
That’s why we recommend that all LLCs have an Operating Agreement – including Single-Member LLCs.
Furthermore, an Operating Agreement is an “internal document“. Meaning, you don’t need to file it with the state or the IRS (Internal Revenue Service). Just keep a copy with your business records.
You can download a free template below.
Then, learn how to fill it out by watching our step-by-step Illinois Operating Agreement video.
5. Get an EIN for your LLC
The next step is to get an Illinois EIN Number from the IRS for your LLC.
Note: An EIN Number is also called a Federal Tax ID Number or Federal Employer Identification Number.
An EIN Number is used to:
- identify your LLC for tax purposes
- open a business bank account
- apply for business licenses and permits
How much does an EIN cost?
Getting an EIN Number from the IRS is completely free.
How long does it take to get an EIN?
If you apply online, it takes 15 minutes.
If you apply by mail or fax, it can take 1-3 months.
How can I get an EIN?
US Citizens/US Residents: If you have an SSN or ITIN, you can apply for an EIN online. Follow these instructions: Apply for an EIN online.
Non-US Residents: You can’t get an EIN online, but you can still get one by fax or by mail. Follow these instructions: How to get an EIN without an SSN or ITIN.
6. Register with the Department of Revenue
Good news, Illinois doesn’t have a state general business license.
That said, all LLCs must register with the Department of Revenue in order to do business in the state.
When you register, the DOR will give you a Certificate of Registration and a Taxpayer ID.
The Certificate of Registration acts like a general business license, and the Illinois taxpayer ID is different from your LLC’s federal EIN number.
The Certificate of Registration and Taxpayer ID are free ($0), and both are required in order to do business in Illinois.
Also, depending on where your LLC is located, you may need a local business license or permit.
For example, if you want to start a daycare, you may need a business license from the city or county.
You can learn more on our Illinois Business License page.
What do I do after my LLC is approved?
After your Illinois LLC is approved, there are some additional steps.
Open an LLC business bank account
You’ll want to open a business bank account for your LLC.
This makes accounting and record-keeping much easier for your business finances.
Having a separate business bank account also maintains your personal liability protection. This is because it keeps your business finances separate from your personal finances.
File your Illinois LLC Annual Report
All Illinois LLCs must file an Annual Report every year.
This filing keeps your LLC in good standing with the state.
How much does an Illinois LLC Annual Report cost?
The Annual Report filing fee is $75 per year.
When is the Annual Report due?
Your Annual Report is due before the first day of your LLC’s anniversary month, every year. And your LLC’s anniversary month is the month your LLC was formed.
For example, if your LLC is approved on May 16, 2024, your anniversary month is May. That means your Annual Report is due before May 1, every year.
When is my first Annual Report due?
Your first Annual Report is due the year after your LLC was approved.
For example, if your LLC was approved on April 12, 2024, your first Annual Report is due before April 1, 2025.
How do I file my LLC Annual Report?
You can file your LLC’s Annual Report online or by mail. We recommend the online filing because it’s easier to complete.
Follow our step-by-step guide here: Illinois LLC Annual Report.
LLCs don’t pay federal taxes. Instead, the LLC Members pay the taxes for the LLC.
Said another way, the owners pay taxes for the LLC as a part of their personal tax return.
How will my LLC be taxed?
By default, an Illinois LLC is taxed by the IRS based on the number of owners your LLC has:
- A Single-Member LLC is taxed like a Sole Proprietorship.
- A Multi-Member LLC is taxed like a Partnership.
Alternatively, you can ask the IRS to tax your LLC like a C-Corporation or S-Corporation.
Illinois LLCs are also required to pay 1.5% of their net income to the Illinois Department of Revenue. This is called the Personal Property Replacement Tax.
Learn more about federal, state, and local income taxes (plus sales tax) in Illinois LLC Taxes.
How to Start an LLC in Illinois FAQs
Can I start an LLC online in Illinois?
Yes, you can file your LLC online in Illinois. The Articles of Organization filing fee is $150.
When you start your LLC online, it will be approved 5-10 business days
What are the benefits of an LLC?
The first benefit of an LLC is protecting your personal assets. Meaning, if your business is sued, your personal assets – like your home, cars, and bank accounts – are protected.
This protection applies to all LLC owners (called LLC Members). It doesn’t matter if you have a Single-Member LLC or Multi-Member LLC. All of the LLC owners are protected from the business debts and liabilities.
This type of protection wouldn’t apply if you operate as a Sole Proprietorship or Partnership. With these types of informal business structures, the owners aren’t protected in the event of a lawsuit. For that reason, Limited Liability Companies (LLCs) are a much more popular business structure.
Another benefit is LLC pass-through taxation. This means the LLC itself doesn’t pay federal income taxes. Instead, the profits “pass through” to the LLC Members. And the Members pay the taxes on their personal tax return.
And Illinois state income taxes are very similar, since the state honors the federal tax treatment of your LLC.
To learn more, please see How are LLCs taxed.
Is Illinois a good state to start an LLC?
Whether Illinois is a good state to start an LLC depends on where you live – and where you’re doing business.
Meaning, if you live in or do business in Illinois, then you should start your LLC in Illinois. While many websites talk about tax rates and advantages of certain states, none of that applies if it’s not the state where you live and do business.
For example, if you form an LLC in Delaware, but live in and conduct business in Illinois, you’ll also need to register your Delaware LLC in Illinois (and pay extra fees). And you’ll end up paying Illinois taxes anyway. This ends up leading to more costs and more headaches with no advantages.
In summary, if you live in and conduct business in Illinois, then yes, Illinois is a good state to start a business. If you don’t live in and do business in Illinois, then no, Illinois isn’t a good state to start a business.
Real estate exception: If you’re purchasing real estate outside of Illinois, you should form your LLC in the state where the property is located.
For more information, please see Best State to Form an LLC.
Illinois State Agencies
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.