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 these steps to create an LLC in Illinois. For more information on how to form an LLC in any state, see our article on how to start an LLC. You can also use our online LLC formation service to register your LLC.
Before filing your paperwork to create your LLC, you'll need a business name. Illinois has some rules for LLC names that you need to follow.
LLC name must be distinguishable. 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 (2024).)
LLC name must include an entity designator. Under Illinois law, an LLC name must contain the words:
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 (2024).)
Name reservation. You can reserve a name for up to 90 days by filing an application with the SOS. Mail a completed Application to Reserve a Name (Form LLC 1.15) to reserve your name. As of 2024, the filing fee is $25. (805 Ill. Comp. Stat. § 180/1-15 (2024).)
Using an assumed name. When you register your LLC with the SOS, the name you choose for your LLC on your articles of organization becomes your business's legal name. But you don't have to use your LLC's legal name when doing business in the real world. Instead, you can use an assumed business name, also called a "fictitious business name," "DBA" (short for "doing business as"), or "trade name." In Illinois, you must register your assumed name with the SOS.
You can register your assumed name online at the SOS website or by mail using the Application to Adopt Assumed Name (Form LLC-1.20). The registration is good for up to five years. Illinois has an unusual fee schedule. As of 2024, the filing fee ranges from $30 to $150 depending on the year you file your application. (805 Ill. Comp. Stat. § 180/1-20 (2024).)
You can find a list of publications and forms on the SOS website.
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 (2024).)
You can create an Illinois LLC by filing Articles of Organization with the SOS's Department of Business Services. The articles must include:
(805 Ill. Comp. Stat. § 180/5-5 (2024).)
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 2024, the filing fee is $150. Online filings can be handled on an expedited basis within 24 hours for an additional fee.
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, you can use our online LLC formation service. If you'd like more personalized legal help, talk to an Illinois business attorney. They can help you draft an organizational agreement that works best for you and the other LLC members.
Other tax and regulatory requirements might apply to your LLC. For instance, your LLC might need to obtain an EIN, apply for business licenses and permits, and register for business taxes.
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 your LLC's business activities and locations, you 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. For example, you might need a professional or occupational license at the state level, a general operating license at the city level and building permits at the town level. For more, read how to get a small business license in Illinois.
Illinois 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 LLC annual report and tax filing requirements in Illinois.
Here are some other questions you might have about your Illinois LLC.
If you're just starting your business or have already been operating as a sole proprietor, you should consider forming an LLC. LLCs limit an owner's personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business.
To learn more about LLCs and decide if it's the right business structure for you, see our article on LLC basics.
Below are the fees (as of 2024) you might need to pay to form your LLC in Illinois:
Filing on your own is often the cheapest option, but completing all of the forms and filing them yourself can be complicated. Hiring a lawyer is another option, but it will often cost you hundreds, if not thousands, of dollars in the process. If you'd like help completing all the filings, try our online LLC formation service.
To learn more about the costs associated with forming and running an LLC, see our article on how much it costs to form an LLC.
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. (805 Ill. Comp. Stat. § 180/50-1 (2024).)
You can file your LLC annual report online at the SOS website or on paper using Form LLC-50.1. As of 2024, the fee to file an annual report is $75. Filing a report late (more than 60 days after the due date) incurs an additional penalty.
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.
Apart from annual reports, your LLC will need to file and pay applicable taxes to the local, state, and federal governments. In addition, your LLC might need to obtain and periodically renew any required general or special business licenses or permits. You'll be responsible for keeping track of these maintenance requirements to keep your LLC in good standing and legally compliant.
Starting in 2024, all LLCs were previously required to submit a beneficial ownership information (BOI) report to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury. However, in March 2025, after some constitutional challenges, FinCEN revised the BOI reporting rule so that the requirement only applies to companies created outside the U.S. So, if you form your LLC within the U.S., then you no longer need to worry about the BOI reporting requirement.
You're not required to have an operating agreement in Illinois. But it's highly advantageous to have this foundational document. An operating agreement will help protect your limited liability status, prevent financial and managerial misunderstandings, and ensure that you decide on the rules governing your business instead of state law by default.
Illinois doesn't require a general business license at the state level. However, you'll likely need to get some sort of operating license at the local level. Some cities require all businesses to get a license (unless exempt) while other cities require only some types of businesses to obtain a license. While you don't need a general business license at the state level, you might still need to apply for a professional or occupational license with the state.
For local licenses, check with your local city clerk (or county if it's in an unincorporated area). For state licenses, check the Illinois Department of Commerce First Stop Business Information Center.
For more detailed guidance, read how to get a small business license in Illinois.
Yes. LLCs are a unique business structure when it comes to taxes. By default, LLCs are taxed as pass-through entities (PTEs), meaning the income passes through the business to the owners, who then pay taxes on their share of the income. Specifically, single-member LLCs are taxed as disregarded entities, and multi-member LLCs are taxed as partnerships. In either case, you can elect to have your LLC taxed as a corporation and pay Illinois's corporate income tax.
Most LLCs (including those taxed as corporations and partnerships) must pay a replacement tax. This tax is also known as a personal property replacement tax. If your LLC is taxed as a partnership, you have the option of paying Illinois's PTE tax. If you choose to pay this tax (available through 2025), your LLC will pay a flat rate income tax on behalf of all LLC owners and each owner can claim a credit on their personal tax return.
Your LLC might be responsible for other state and local taxes, such as sales and use tax, property tax, withholding tax, and other business taxes.
Read about business income tax in Illinois to learn more.
To do business in Illinois, all LLCs organized outside of the state (called "foreign LLCs") must register with the SOS. Foreign LLCs must appoint a registered agent for service of process physically located in Illinois. To register, file an Application for Admission to Transact Business (Form LLC-45.5). The completed application must be accompanied by a certificate of good standing or existence from the foreign LLC's home state, dated no more than 60 days prior to the filing of the certificate.
Before filing, make sure the LLC's name is available in Illinois by checking the Illinois business name database. If the name isn't available, the foreign LLC must adopt an assumed name for use in Illinois and submit it with the application. As of 2024, the fee to file an Application for Admission to Transact Business is $150.
(805 Ill. Comp. Stat. §§ 180/45-1 and following (2024).)
For more detailed guidance, see how to qualify as a foreign business in Illinois.
Yes. For most formation purposes, an Illinois single-member LLC is considered the same as a multi-member LLC. The steps to form a single-member LLC in Illinois are the same as those listed above.
Single-member LLCs do have additional flexibility when it comes to filing a tax return. To learn more, see our article on how single-member LLCs pay federal income tax.
Yes. If you provide a licensed professional service in Illinois and want to form an LLC, you can form a professional LLC (PLLC). Examples of providers of professional services include architects, dentists, nurses, certified public accountants, and more. Generally, if you provide a service that requires you to be licensed under the Illinois Department of Financial and Professional Regulation, then you provide a professional service.
(805 Ill. Comp. Stat. §§ 185/1 and following (2024).)
Read how to form a professional LLC in Illinois for more on PLLC requirements and step-by-step instructions on how to form a PLLC in the Prairie State.
When you're ready to close your business, you should legally dissolve your LLC to limit your liability for lawsuits and government fees. To dissolve an LLC in Illinois, you should:
(805 Ill. Comp. Stat. §§ 180/35-1 and following (2024).)
You also need to close your tax accounts and take any other steps necessary to close out your business. See our article on what you need to do when closing your business for more in-depth information and guidance.
Ready to start your LLC?
Frequently asked questions about starting and running an LLC, or limited liability company.
LLC owners report business income and losses on their personal tax returns. Learn how to make the most of your LLCs tax flexibility.
Take our business formation quiz to find out what the best form of business ownership is for you.
Read about why you need an operating agreement and what to include in one.
LLCs offer their owners liability protection, but if you aren't careful an LLC's owners, members, or shareholders may be on the hook personally for business debt.
Appointing a registered agent is a simple - but essential - step for every business. Learn more about what a registered agent does.
Get all of the information you need to start and run a small business.
Copyright ©2025 MH Sub I, LLC dba Nolo ® Self-help services may not be permitted in all states. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site. The attorney listings on this site are paid attorney advertising. In some states, the information on this website may be considered a lawyer referral service. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state. Your use of this website constitutes acceptance of the Terms of Use, Supplemental Terms, Privacy Policy, Cookie Policy, and Consumer Health Data Notice.
Your Privacy Choices
