How to Start an LLC in Illinois

When starting your business in Illinois, you can choose to form a limited liability company (LLC). An LLC is a business structure that combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. If you want to limit your personal liability for business debts and lawsuits, you should consider forming an LLC.

Follow the steps below to form an LLC in Illinois:

(For more on how to form an LLC in any state, see our article on how to start your LLC.)

1. Choose a Name for Your Illinois LLC

You should choose a unique business name. Illinois requires that your LLC's name be distinguishable from the names of other business entities already on file with the Illinois Secretary of State (SOS). In other words, the name of your business can't be the same as any other business name registered or reserved in Illinois. You can check to see if a name is available by searching the SOS Business Services business entity search database. (805 Ill. Comp. Stat. § 180/1-10 (2023).)

You can reserve a name for up to 90 days by filing an application with the SOS. (805 Ill. Comp. Stat. § 180/1-15 (2023).) Mail a completed Application to Reserve a Name (Form LLC 1.15) to reserve your name. As of 2023, the filing fee is $25.

Under Illinois law, an LLC name must contain the words:

• limited liability company
• L.L.C., or
• LLC.

The abbreviations "Ltd." and "Co." aren't allowed in Illinois. Your LLC's name also can't include a designation for another business entity such as "Corp.," "Inc.," or "L.P." (805 Ill. Comp. Stat. § 180/1-10 (2023).)

2. Appoint a Registered Agent for Your Illinois LLC

Every Illinois LLC must have an agent for service of process in the state. Commonly called a "registered agent," this agent is an individual or business entity that agrees to accept legal papers on the LLC's behalf if someone sues the company. A registered agent can be an individual who resides in Illinois or a registered business authorized to do business in Illinois. The registered agent must have a physical street address in Illinois. (805 Ill. Comp. Stat. § 180/1-35 (2023).)

3. File Articles of Organization With the Illinois Secretary of State

You can create an Illinois LLC by filing articles of organization with the SOS's Department of Business Services. The articles must include:

• the LLC's name
• the address of the LLC's principal place of business
• the purpose(s) for which the LLC is organized
• the name and address of the LLC's registered agent
• a statement that the LLC has at least one member
• the names and addresses of the initial manager(s) if manager-managed; the names and addresses of initial member(s) if member-managed
• a statement regarding the LLC's duration (perpetual or for a specified period), and
• the name and address of each organizer.

(805 Ill. Comp. Stat. § 180/5-5 (2023).)

You can file the articles online through the Department of Business Services or by mail by submitting Form LLC-5.5 to the SOS. As of 2023, the filing fee is $150. Online filings can be handled on an expedited basis within 24 hours for an additional $100 fee (2023).

4. Prepare an Operating Agreement

Illinois doesn't require your LLC to have an operating agreement. Though not required, it's strongly recommended that your LLC as one. An operating agreement is an internal document that establishes how you'll run your LLC. This document sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. If you don't have an operating agreement, state LLC law will govern how your LLC operates.

For help creating an LLC operating agreement, see Form Your Own Limited Liability Company by Anthony Mancuso (Nolo) or use our online LLC formation service.

5. Get an EIN and Comply With Other Tax and Regulatory Requirements

After formation, your LLC will need to complete other tax and regulatory requirements. These requirements include:

EIN. If your LLC has more than one member, it must obtain a federal employer identification number (EIN), even if it has no employees. If you form a single-member LLC, you must obtain an EIN for your LLC only if either you elect to have your business taxed as a corporation instead of a sole proprietorship (disregarded entity) or your single-member LLC has employees. You can get an EIN by completing an online EIN application on the IRS website. There's no filing fee.

Business Licenses. Depending on its type of business and where it's located, your LLC might need to obtain local and state business licenses or permits. You'll need to make sure you get all the necessary licenses and permits at the state, county, and city levels.

Department of Revenue. If you have employees or will be selling goods and collecting sales tax, you'll need to register with the Illinois Department of Revenue (DOR). You can register your business online at the DOR website. For more information on Illinois LLC tax registration, check out the Illinois annual tax and LLC filing requirements.

6. File Annual Reports With the Illinois Secretary of State

All LLCs doing business in Illinois must file an annual report with the SOS. The report is due each year before the first day of the LLC's anniversary month (the month when your LLC was created). For example, if your LLC was created on July 15 then your report would be due each year by July 1.

You can file your LLC annual report online at the SOS website or on paper using Form LLC-50.1. As of 2023, the fee to file an annual report is $75. Filing a report late (more than 60 days after the due date) incurs an additional $100 penalty.

Additional Help Starting Your Illinois LLC

You can find many free available resources online through the Illinois state government. The business section of the Illinois state website has information and links related to business registration, name searches, licenses, permits, and employer responsibilities.

If you'd like personalized legal help, talk to an Illinois business lawyer. An attorney can help you with your business registrations, tax and regulatory obligations, and formation paperwork.