Have a great business in mind? Let Incfile help your ideas take flight! Whether you’re in the Windy City or on the prairie frontier, creating an LLC in Illinois is an easy way to get your business off the ground. With minimal membership requirements, tax credits and other business incentives, the state of Illinois offers a great place to start your business. Here’s how to form an LLC in the Land of Lincoln.
The first step to forming your LLC is choosing a name for your business. The name must not be the same as another LLC, corporation or other business entity already registered in the state. A simple way to make sure your name is available is to do a name search on the Illinois state website.
Here are some other tips for naming your LLC:
Now that you have thought of a good name for your LLC, the next step is creating and filing your articles of organization. The state fee to file in Illinois is $500. Incfile makes filing your articles of organization super easy.
The Articles of Organization include:
It is required that every LLC filed in the state of Illinois have a registered agent. The agent must be in-state. The purpose of an agent is to receive and send paperwork on behalf of your company.
Incfile provides Registered Agent services for Illinois LLCs FREE for your 1st year in business.
Once you have completed your articles of organization, you will need to create an operating agreement. While an operating agreement is not mandated by the state of Illinois, it is a crucial legal document that explains ownership and day-to-day operating procedures for your company. It essentially serves an internal contract for members and owners.
An operating agreement should include:
Operating agreements are an important way to have all the details of your LLC written out to avoid potential legal issues. You do not need to file this agreement with the state.
LLC owners are usually referred to as members. An LLC must have at least one member, but there is no maximum. To become a member, an individual must make some kind of contribution to the business, either by paying cash, transferring property, or by assuming an obligation to do so. Members have voting and control over the company. The procedure for becoming a member and resigning should be outlined in the operating agreement.
In order to stay in good standing with the state, Illinois requires all LLCs to provide an annual report within 60 days of the first day of the anniversary month of your LLC. The cost is $300 to file online. Incfile will send you reminder emails before the due date.
In many states an LLC can be a “pass-through entity,” meaning the LLCs do not pay the federal income tax, only the members do. In Illinois that is not the case. The state imposes a separate tax on LLCs, called a personal property replacement tax. For most LLCs, it is 1.5% of the net income.
If your LLC has employees, or if you are selling goods and collecting sales tax, you will need to register with the Illinois Department of Revenue.
If in the future your LLC can no longer operate, you will need to officially dissolve it. Your operating agreement should include a dissolution plan and its procedures to close the business. Illinois’s LLC Act includes these tasks for dissolving your LLC:
Illinois’s LLC Act requires filing articles of dissolution with the Secretary of State. The article includes:
The fee to file the article of dissolution is $100. You must file two identical copies.
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