Why Choose Illinois for Your LLC?
The Prairie State is a great place to start a business. With Chicago in the northeast, small industrial cities and immense agricultural productivity in the north and center of the state and natural resources such as coal, timber and petroleum in the south, Illinois has a diverse economic base and is a major transportation hub.
For most business owners, the fastest and easiest way to start a business in Illinois is by creating an Illinois LLC. A limited liability company (LLC) is a type of business entity that’s ideal for startups and small- to medium-sized businesses. You get the advantages and protections of larger Illinois corporations but with much simpler rules and regulations.
Briefly, the benefits of starting an Illinois LLC include:
Separating and limiting your personal liability from your business liability and debts
Quick and simple filing, management, compliance, regulations and administration of your Illinois LLC
Easy tax filing and potential advantages for tax treatment
Learn more about the benefits of the LLC business structure.
In this guide you’ll find information on starting your Illinois business, searching for and naming your LLC, registering your business, getting an Illinois Registered Agent, the fees you’ll need to pay, business taxes and much more.
Forming Your Illinois LLC Yourself: 6 Main Steps
Complete an Illinois LLC Search and Choose a Unique Business Name
You will need a distinctive and original name for your Illinois LLC that’s not used by any other business in IL. If you’re having trouble coming up with a name, try out Incfile’s Business Name Generator to brainstorm ideas. There are also a few naming rules you’ll need to follow, which you can read about in detail on our section on Illinois LLC Business Names. One Illinois rule, for example, is that certain restricted words need additional paperwork if you want to use them in your business name. This includes both names associated with institutions and words associated with certain qualified professions, such as insurance, surety, underwriters, bank, bankers, banking or any licensed professional services.
Once you’ve chosen a name, you’ll need to make sure it’s available in Illinois. To find out if another company is using your chosen business name, use Incfile’s fast and easy Business Name Search tool below. Alternatively, you can carry out an Illinois business entity name search on the IL Secretary of State website.
Provide an Official Business Address for Your LLC
Every Illinois LLC must have a designated street address. That could be your home address (if you’re running the company from your residence), your company’s office building or any physical address of your preference. The address can be outside the state of Illinois and can be a P.O. Box.
Assign an Agent for Service of Process for Your Illinois LLC
Every Illinois LLC is required to have a Registered Agent. This is an official position; the Registered Agent is someone who receives official legal and tax correspondence and has responsibility for filing reports with the Illinois Secretary of State.
This position can be filled by you, another manager in the business or a dedicated Registered Agent service. If your Registered Agent is a person, they must reside in and have a physical street address in Illinois and must be present to receive important documents for your company during business hours. In Illinois, you designate your Registered Agent when you file your Articles of Organization and formally create your business.
At Incfile, all of our packages include an Illinois Registered Agent service that is free for the first year and just $119 per year afterward. We also have a dashboard where you can log in and easily view any document your Registered Agent has received on your behalf.
File Articles of Organization with the Illinois Secretary of State
Once you've gathered all the information for your Illinois LLC, you’ll need to file a formal document (Form LLC-1) with the IL Secretary of State. This document is known as your “Articles of Organization,” and filing the document creates your Illinois LLC. Here’s what is typically included:
You can file your Illinois LLC Articles of Organization online with the Illinois Secretary of State (SOS) filing system, mail in a form to the Office of the Secretary of State or have Incfile do it on your behalf. The State of Illinois charges a $154 fee to file and start an LLC.
You only need to file your Articles of Organization once, but every year after you need to file an annual report for your LLC. This is also something Incfile can remind you to do or do for you if you choose to have us handle the paperwork.
Get an Employer Identification Number (EIN) from the Internal Revenue Service
You will need an EIN to identify your business to the IRS. You use this number when filing and paying taxes or when submitting payroll information and payments for your employees. An EIN number is also required to open a business bank account. You can obtain one directly from the IRS, or Incfile can get one for you as part of the Illinois LLC business formation process.
Create an Illinois LLC Operating Agreement
An Operating Agreement is a kind of “instruction manual” that outlines how you will run your business. It includes how decisions are made, how the business is divided amongst members and what happens if a member leaves the company.
Many states require that a company have an Operating Agreement in place — it isn’t legally required in Illinois, but it’s a good idea to have one nonetheless.
Other Important Illinois LLC Info
Special Types of LLCs in Illinois
A regular Illinois LLC is suitable for most business needs, but you also have a few other options to incorporate a special type of LLC.
In Illinois, you also have the option to set up a Series LLC. These are specialized LLCs designed to allow you to manage multiple separate LLCs under one master, umbrella LLC. These can be very useful if you don’t want to set up a separate Illinois LLC for every individual business you run. You can apply for a Series LLC in IL after you file Articles of Incorporation by filling out Form LLC-37.40 and paying a fee of $400.
Some states, including Illinois, allow certain occupations to form Professional LLCs. These types of businesses typically have specialized requirements and licensing. A standard LLC may be formed to provide professional services, such as the practice of medicine or dentistry, if all the members are licensed.
A limited liability company engaged in rendering a professional service regulated by the Illinois Department of Financial and Professional Regulation must register with that agency.
If your business is already operating in another state and expanding to Illinois, you’ll need to form a foreign LLC.
Helpful Resources from the Illinois Secretary of State
The IL Secretary of State has plenty of additional information on forming and running a business in Illinois.
More Information in This Guide
You’ll find plenty more insight and guidance on the other pages of this guide, including:
Learn how to appoint an Illinois Registered Agent, known as an “Agent for Service of Process,” to your LLC. Includes information on Registered Agent rules and searching for Illinois Registered Agents.
Learn about the various fees you’ll need to pay and the requirements you’ll need to meet for both federal and Illinois rules, including the Illinois Franchise Tax. Includes information on Employer Identification Numbers (EINs), Illinois and federal business licenses, your Statement of Information and more.
How to understand the various taxes you will need to pay to the federal and Illinois government. Includes details of federal taxes like income and self-employment and Illinois taxes like sales tax and income tax.