These are the steps to form a single-member limited liability company (SMLLC) in Illinois. Remember: For most formation purposes, an Illinois SMLLC is considered the same as a multi-member limited liability company (LLC).
The name of an Illinois SMLLC must contain the words “Limited Liability Company” or the abbreviation “L.L.C.” or “LLC.” If organized as a low-profit SMLLC, the name must contain the abbreviation “L3C.” The name must not contain any of the following words or abbrevations: “Corporation,” “Corp.,” “Incorporated,” “Inc.,” “Ltd.,” “Co.,” “Limited Partnership” or “L.P.” The SMLLC’s name must be distinguishable on the records of the Illinois Secretary of State (SOS) from the names of other domestic or foreign business entities already registered or reserved with the state.
Check to make sure the name you want is available by doing a business name search on the SOS website. For a fee of $25 you can reserve a name for 90 days by filing an Application for Reservation of Name (Form LLC-1.15).
You create an Illinois SMLLC by filing Articles of Organization with the Illinois Secretary of State. To complete the articles you'll need to provide:
Every Illinois SMLLC must have a registered agent. A registered agent is an individual or business entity that agrees to accept legal papers on behalf of the SMLLC. The registered agent can be an individual Illinois resident or a domestic or foreign business entity authorized to do business in Illinois. The registered agent must have a physical street address in Illinois.
All of the paperwork and procedural steps to start a single-member limited liability company in Illinois can be done online using Nolo's Illinois Online LLC Formation application.
Illinois does not require an SMLLC to have an operating agreement. However, even though an SMLLC has just one member, an operating agreement is highly recommended. An SMLLC operating agreement does not need to be filed with the state.
The operating agreement is usually made between the single member and the LLC itself. The agreement typically covers the member’s rights, duties, and obligations, as well as the SMLLC’s management structure. Having an agreement in place can help with liability protection by separating your business from you personally. It also can be useful with lenders and other businesses when entering into business transactions.
In most states, if you don’t state that your SMLLC will be manager-managed when you first register with the state, then your SMLLC will be treated by default as member-managed. The distinction between member-managed and manager-managed can be important so be sure to consider both options before you decide which type of management structure you want for your SMLLC.
An SMLLC that keeps its default tax status of disregarded entity (same as a sole proprietorship) and does not have employees is not required to obtain a federal Employer Identification Number (EIN). Instead, owners of these SMLLCs can report their business profits and losses on their personal tax returns using their own Social Security number or tax identification number.
If your SMLLC has employees or if you choose to have your SMLLC taxed as a corporation rather than as a disregarded entity, you must obtain a federal Employer Identification Number (EIN) from the IRS. Even if you are not required to obtain an EIN for your SMLLC, there are often business reasons for doing so. Banks often require an EIN to open an account in the business’s name and other companies you do business with may require an EIN to process payments. In many cases it makes sense to obtain an EIN for your SMLLC even if it is not required for federal tax purposes.
You can get an EIN by completing an online application on the IRS website. There is no filing fee.
In some cases, for example if you will be selling goods and collecting sales tax or if you have employees, you’ll need to register with the Illinois Department of Revenue (IDOR). You can register either online (through the MyTaxIllinois website) or on paper (Form REG-1). For more information on state LLC tax registration, see Nolo's article LLC Annual Report and Tax Filing Requirements: A 50-State Guide.
Depending on what kind of business you’re running and where it’s located, you may need to obtain local or state business licenses for your SMLLC. Among other possibilities, these might include licenses related to:
You can find additional official information on business licenses through the business registration section of Illinois.gov.
The State of Illinois requires you to file an annual report for your SMLLC. You can file the annual report online at the SOS website or by mail using Form LLC-50.1. The report mainly contains some of the same information as the articles of organization. The report is due each year by the first day of the month in which your SMLLC was created. For example, if your SMLLC was created on July 15 then your report would be due by July 1. The current filing fee is 75. Filing a report late (more than 60 days after due date) incurs an additional $300 penalty.