How to Start an LLC in Illinois
To start an LLC in Illinois, you must file Articles of Organization with the Department of Business Services, Limited Liability Division. You can file the document online or by mail. The Articles of Organization cost $150 to file. Once filed with the state, this document formally creates your Illinois LLC. However, to actually ready the LLC to do business, you must complete several additional steps. Whether you want to try filing yourself or prefer to use our expert services, Northwest can help you start your Illinois LLC with confidence.
Starting an Illinois LLC Guide:
Illinois LLC Filing Options
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Illinois LLC Articles of Organization free download. When you're done filling out the form, submit it to your state.
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Illinois LLC Articles of Organization Requirements
To form an Illinois LLC, you must complete and file the Articles of Organization with the Department of Business Services, Limited Liability Division. See the document below and click on any number to see what information is required in the corresponding section.
You have to include “Limited Liability Company” or an abbreviation like “LLC.” You can’t include words that would make people think you’re a different business entity like “corporation.”
This must be a street address in Illinois (no PO Boxes). When you hire Northwest, you can list our Illinois address as your principal address.
Most businesses begin their existence as soon as their Articles are approved. If you want to push off your start date a bit (maybe if the next tax year is just around the corner), you can list a date up to 60 days in the future.
You can list yourself, someone else, or a service like Northwest. Naturally, we recommend Northwest.
This is the street address in Illinois where your registered agent will be available. When you hire us, our address will go here.
If you’d like to include a specific purpose for your business, you can enter one in this section. The Articles already include a general purpose (the transaction of lawful business), however, so it’s not usually necessary to add anything further.
If you don’t want a specific end date for your LLC, skip this section. Otherwise, write in the date you want your business to end.
Include the name and business address of the managers (if your LLC is manager-managed) or members. Note that you only need a business address; there’s no need to include anyone’s personal address.
Your organizer is just the person who completes and submits your Articles. Organizers are required to put their name, address and signature. This doesn’t have to be anyone within your LLC—when you hire Northwest, we’ll put all of our information in this section.
How much does it cost to start an Illinois LLC?
The filing fee for your Illinois LLC Articles of Organization is $150, plus $100 if you want expediting. Online filings also have a credit card processing fee based on the total amount of the transaction, adding on a few more dollars.
Hire Northwest, and your total, out-the-door cost is $379 ($481 for 1-day expediting), including state filing fees, registered agent service, and loads of useful forms to help get your Illinois LLC up and running.
How long does it take to start an Illinois LLC?
Pay an extra $100 for expediting and you can get your Articles of Organization processed in one business day. Have a couple weeks to kill while you wait for your Articles to be processed? You can save a little cash in exchange for your patience. Unexpedited filings average 10 days for processing.
If you hire Northwest to start your LLC, we file online and typically have your expedited Illinois LLC formed within 24 hours.
Does an Illinois LLC need a registered agent?
100% yes—Illinois requires LLCs to appoint and maintain a registered agent. You could appoint an individual like yourself or a secure, dependable company like ours. Hiring Northwest as your registered agent gives you some great benefits—namely privacy and consistency.
Your Articles of Organization are part of the permanent public record—including all the names and addresses. If you list your own private address, you could end up with unwanted visitors at your door (not to mention a mailbox full of junk). Let us deal with the strangers and spam—when you hire us, you can list our Illinois office address on your Articles of Organization.
Also, when you appoint yourself or a friend as registered agent, there’s going to be a lot of adjustments. You’ll switch offices. You’ll need to be out of town for a while. These things happen. And whenever you change up your registered agent or office, you have to pay a $25 fee and file a Statement of Change. With Northwest, you’ll have consistency—no worrying about constant (and expensive) address updates.
Create the Illinois LLC Operating Agreement
Do I need an Operating Agreement?
You don’t have to file your operating agreement with any Illinois agency, so technically, you could get away without one—but why would you want to? An operating agreement isn’t just annoying paperwork. It’s one of your LLC’s most important internal documents.
Why is an Operating Agreement important?
Your operating agreement lists everything from individual investments to how profits and losses are allocated. It even goes over what happens if the business closes. Members and managers will definitely want to see this information in writing. Even if your dream isn’t to be the next Caterpillar and you plan to stay small (maybe even just you), it’s useful to have an operating agreement. When you open a business bank account, the bank will want to see your agreement. Potential business partners and investors will want to see it too. You don’t want to respond to a request for your operating agreement with “hang on, I have to go write one real quick.”
Do I have to write the Operating Agreement?
Not from scratch. At Northwest, we’re here to help your LLC get off on the right foot. When you hire us, we don’t just form and file your Articles and provide expert registered agent service (although we do both of these things very well). We also provide your LLC with a free operating agreement, specific to your management style. We’ve spent years developing these agreements and other forms—free LLC forms which have been used by over a million LLCs.
Get an Illinois LLC EIN
Do I have to get a tax ID number (EIN)?
Yes—you’ll need an EIN to file your Personal Property Replacement Tax with the Illinois Department of Revenue. You’ll also need an EIN if you have employees, and you’ll likely use your EIN when you open a business bank account. You can apply for an EIN directly from the IRS at no cost. Or, save some time and pay us to do it for you.
At Northwest, our LLC formation service includes the essential, like your name reservation, registered agent and LLC filing. However, we also aim to ensure that every business—from those that want to save the most money to those that want to do the least paperwork—gets what they need from us. Prefer to apply for a tax ID yourself? Great. Rather have us do it? Just add on tax ID service during checkout.
Open a Bank Account for Your Illinois LLC
To open a bank account for your Illinois LLC, you will need to bring the following with you to the bank:
- A copy of the Illinois LLC Articles of Organization
- The LLC operating agreement
- The Illinois LLC’s EIN
If there are multiple members in the LLC, you may also want to bring an LLC resolution to open a bank account that states that the person going to the bank is authorized by the members to open the account in the name of the LLC. Northwest can help with this as well—LLC bank resolutions are one of the many free legal forms we provide to ensure you can get your LLC started fast.
We recommend calling your bank ahead of time before going in and asking what their requirements are. Most banks don’t open business accounts nearly as frequently as personal accounts, so some bankers may be unfamiliar with their own bank’s requirements. As frustrating as that may be for you, calling ahead will help save you from being super annoyed when you walk into the bank.
Obtain a Business License
Does an Illinois LLC need a business license?
While Illinois doesn’t have a state-level business license, some cities and counties require business licenses. For example, Chicago only requires licenses for specific business activities, such as manufacturing or child care. Elgin, on the other hand, requires a (free) general business license in addition to any business-specific licenses.
Need an EIN or a certified copy of your formation docs for your license applications? Northwest can help. You can easily add on these items to your LLC formation order.
File Illinois LLC Reports
What is an Illinois LLC Annual Report?
The Illinois LLC Annual Report is basically an information update you file each year so the state knows who currently runs things and how to contact your business. The $75 filing fee is no fun, but the real killer is the late fee—if your report is more than 60 days late, you’re stuck with a $300 penalty. Fail to pay your filing and penalty? Your business will be dissolved 180 days after the original due date. Yikes.
The lesson here? Don’t take your annual reports lightly. They may seem a little ridiculous, especially if you don’t need to update anything from the previous year, but they’re serious business (and revenue) for the state. We want you to stay in good standing—and in business! When you sign up for Northwest, we send you reminders for your annual report due dates. You can even hire us to complete your reports for you if you want one less thing to worry about each year.
How much does an LLC in Illinois cost each year?
The fee for the Illinois LLC Annual Report is $75.
Pay the LLC Taxes
What are the Illinois LLC taxes?
The Illinois personal net income tax rate is a flat 4.95%. The state also has a 6.25% sales tax—although cities and counties can stack on local sales taxes as well. The maximum total sales tax tops out at 11% (which you can find in River Grove), but the average total sales tax is 7.651%
Most LLCs are taxed as either partnerships or S corporations, so you shouldn’t have to worry about corporate net income taxes, right? Well, not exactly. While you won’t pay the actual corporate net income tax, Illinois has still found a way to tax your income at the entity level with its Personal Property Replacement Tax. Businesses taxed as partnerships or S corporations pay a 1.5% tax on net income. (At least it’s better than the C corporation PPRT rate of 2.5%.)
Property taxes are also worth a note—Illinois has the second-highest property tax in the country, averaging a painful 2.32%. This doesn’t necessarily mean business owners should swear off property in Illinois though. For example, the high taxes have driven many to rent instead of buy, so there’s a strong apartment rental market. If you do decide to invest in Illinois property, your attorney will likely advise creating an LLC to protect your personal assets. At Northwest, we can form your Illinois LLC for as low as $379.
Is registration with the Department Of Revenue required?
Yes. Illinois is pretty heavily invested in making sure businesses meet all of their tax obligations. If you conduct business in Illinois, you must register with the Illinois Department of Revenue. You can register online with MyTaxIllinois or by filing an Illinois Business Registration Application.