How to Start an LLC in Illinois
An Illinois limited liability company (LLC) is a business entity type that benefits from a flexible management structure, pass-through taxation, and strong liability protection. To form an LLC in Illinois, you’ll need to file the Articles of Organization with the Illinois Department of Business Services, Limited Liability Division, and pay the $150 filing fee. Before you file, you must choose a company name and appoint a registered agent. The state can take between three days and three weeks to process filings they receive, depending on how you file and whether you pay for expedited processing. We’ll walk you through the process of starting your LLC in Illinois.
Ready to Start an LLC in Illinois?
Get Started
Name Your LLC
Designate a Registered Agent
Submit LLC Articles of Organization
Write an LLC Operating Agreement
Get an EIN
Open a Bank Account
Fund the LLC
File reports + taxes
1. Name Your LLC
When choosing a name for your Illinois LLC, you’ll need to follow the guidelines in §805 ILCS 180/1-10. Basically, your LLC name has to:
- Include the words “limited liability company” or an abbreviation, such as “LLC.”
- Not include words or abbreviations that are reserved for other entity types, such as “corporation,” “limited partnership,” or “inc.”
- Not include the words “trust,” “trustee,” or “fiduciary,” unless the business is an authorized corporate fiduciary.
- Be distinct from any other active business name in Illinois.
Already have a business name? Check to see if it’s available.
Can I reserve a business name in Illinois?
Yes. If you need to reserve your name until you’re ready to officially start your LLC, you can submit an Application for Reservation of Name to the Illinois Department of Business Services to reserve the name for up to 90 days. The filing fee is $25.
What’s the difference between my LLC’s name and an assumed business name?
Your LLC’s official name is the one written on your Articles of Organization. Any other name your LLC does business under is an assumed business name (sometimes called a fictitious business name or DBA). Assumed business names need to be registered with the Illinois Secretary of State’s office.
Considering using an assumed business name? Learn How to Get a DBA.
2. Designate a Registered Agent
Your business needs an Illinois registered agent. A registered agent is a person or business entity designated to accept service of process (legal mail, including lawsuits) on behalf of your business. All Illinois LLCs are required to maintain a registered agent. You’ll have to include your registered agent’s name and address on the Articles of Organization.
Learn why the pros use a registered agent service.
What does a registered agent do?
Illinois’s registered agent rules are outlined in §805 ILCS 180/1-35. Registered agents are required to:
- Have a physical address (not a P.O. box) in the state of Illinois.
- Hold regular business hours.
- Accept legal mail on your business’s behalf and deliver it to you promptly.
Can you be your own registered agent in Illinois?
Yes. However, if you are your own registered agent, you will have to put your own name and address on the public record. You will also need to be at your address during regular business hours to accept service of process.
Can I change my registered agent after I start an LLC?
Yes, you can change your registered agent in Illinois by filing a Statement of Change of Registered Agent with the Illinois Secretary of State and paying the $25 filing fee.
3. Submit LLC Articles of Organization
Your LLC won’t be official until the Illinois Secretary of State approves your Articles of Organization. You can submit your Articles online, by mail, or in person.
Note: All of the information on this form will become part of the public record.
Here is the information you will need to provide:
- Company name: Should include “limited liability company” or an abbreviation.
- Business address: Must be a street address in Illinois.
- Formation date: Indicate whether you want your business to become official immediately or at a later date (no more than 60 days after filing).
- Registered agent: Someone authorized to accept legal mail on behalf of your LLC.
- Registered office: Must be a street address in Illinois.
- Purpose: Optional unless your LLC will offer services that require a professional license.
- Business duration (optional): If you want your business to dissolve on a certain date, add it here.
- Optional provisions: Additional rules for how your business will operate. You can also record these in your operating agreement.
- Member or Manager Names and Addresses: If your LLC is member-managed, list the names and addresses of members. If your LLC is manager-managed, list the names and addresses of the managers.
- Organizer: Whoever fills out and signs the Articles of Organization.
How can I keep my personal information off the public record?
It’s true that when you submit your Articles of Organization to the state, all the names and addresses listed on it become part of the public record. Marketing firms are experts at finding this information and using it to send you junk mail.
The best way to limit the amount of personal information you share is by hiring a registered agent service that will put their address on this form instead of yours wherever possible.
What’s the difference between a member-managed and manager-managed LLC?
In a member-managed LLC, the LLC members themselves manage the daily operations of the business. In a manager-managed LLC, the members hire one or more people to be the LLC’s managers. The people who manage your LLC will be able to enter contracts, hire and fire workers, and open business bank accounts, along with other responsibilities.
For help with deciding which management structure will work for you, see our page on LLC Member Vs Manager.
How do I file the Illinois Articles of Organization?
You can submit your Articles of Organization online, by mail, or in person.
By mail or in person:
Department of Business Services
Limited Liability Division
501 S. Second St., Rm. 351
Springfield, IL 62756
Online:
What’s a series LLC?
In a series LLC, there is a “parent” LLC (also called an umbrella LLC) with one or more divisions within it (called “series”). Each series has its own assets and liability protection. If you’re thinking about forming a series LLC, you should consult an attorney to see if it’s a good option for your business.
Intrigued? Learn How to Start a Series LLC in Illinois.
4. Write an LLC Operating Agreement
An operating agreement lays out the rules and procedures an LLC will follow. It’s an essential document establishing each member’s investment amount, rules for voting, how you will settle disputes, and much more.
Check out our attorney-drafted Illinois LLC Operating Agreement.
Does Illinois require an LLC to have an operating agreement?
Not technically. Per §805 ILCS 180/1-30, an LLC may enter into an operating agreement but is not required to. That said, you should consider an operating agreement a must. If you don’t have an operating agreement, your business will be governed by Illinois’s default LLC statutes.
Operating agreements are internal documents, so you don’t need to file yours with the Secretary of State. Even so, you’ll need one to open a business bank account. And in case of a lawsuit, your operating agreement could help you protect your limited liability.
What should be included in an operating agreement?
Your operating agreement should plan for every major situation that your LLC is likely to deal with. This includes everything from allocating profits and losses to dissolving the business, if you ever need to. Here are some common topics operating agreements cover:
- initial investments
- profits, losses, and distributions
- voting rights, decision-making powers, and management
- transfer of membership interest
- dissolution
You’re free to include almost any rule in your operating agreement as long as it doesn’t contradict the Articles of Organization or Illinois law.
Does a single-member LLC need an operating agreement?
Yes. Even though a single-member LLC won’t have to deal with internal disputes, it will still need an operating agreement to open a bank account and reinforce its limited liability protection.
5. Get an EIN
Your business’s EIN (employer identification number) is the number the IRS will use to identify your business on tax forms. Basically, it’s a social security number for your business. The IRS lets you apply for an EIN for free online and by mail. It’s faster to apply online, but if you don’t have a social security number, you will need to apply by mail.
Do I need an EIN for my Illinois LLC?
Yes. Technically, you’re only required to have an EIN if your LLC employs people or is taxed as an S-Corp or C-Corp. However, almost all banks require you to have an EIN to open a business bank account. Plus, with an EIN, you can avoid giving out your own social security number.
What To Do After Forming Your Illinois LLC
6. Open a Bank Account
The next step is to open a business bank account. This step is essential for LLCs, since your limited liability depends on keeping business and personal finances separate.
When you go to the bank to open an account for your Illinois LLC, be sure to bring:
- Illinois LLC Articles of Organization (a copy is fine)
- the LLC’s operating agreement
- the LLC’s EIN
- an LLC Resolution to Open a Bank Account (if your LLC has more than one member).
If your LLC has more than one member, use our free LLC Resolution to Open a Bank Account.
7. Fund the LLC
Now you’re ready to fund your LLC. All of your members should make a contribution to the LLC to pay for their membership interest. Most of the time, members contribute monetarily by writing a check to the business bank account. However, sometimes members contribute property or services instead. Be aware that investments of property or services often result in a tax event.
What is LLC membership interest?
Membership interest is a member’s ownership stake in the LLC. Usually, the amount each member invests is proportional to their amount of ownership. For example, if one member invests $6,000 in the LLC, and four members each invest $1,000, the first member would own 60% of the business, and the other four members would own 10% each. Often, membership interest is directly tied to voting power.
8. File State Reports & Taxes
Illinois LLCs are required to file an annual report each year. The purpose of the annual report is to inform the state if the LLC has changed ownership and to make sure they have up-to-date contact information for your business. Illinois’s annual report fee is $75.
Worried you’ll forget? Let us file your annual report for you.
When is the Illinois Annual Report due?
In Illinois, your annual report is due before the first day of your business’s anniversary month. So if your LLC was formed on April 7th, your annual report is due by March 31st the following year. If your report is more than 60 days late, you will have to pay a $100 late fee.
How are Illinois LLCs taxed?
The default tax classification for LLCs is pass-through taxation. This means that the LLC itself doesn’t pay taxes. Instead, the LLC’s profits “pass through” the business to the owners, who then report the profits as income on their individual tax returns. The profits for Illinois LLCs are taxed at the federal self-employment tax rate (15.3%). LLCs can also submit a form to the IRS to be taxed as an S-Corp or a C-Corp.
Learn more about S-Corp Vs LLC tax designation.
