To start an LLC in Illinois, you file Articles of Organization with the Illinois Secretary of State, which costs $150 online. The process takes about a week for standard processing, though you can pay more for expedited service. Beyond that single filing, there are a few additional steps to make your LLC fully operational and compliant with state requirements.
Choose a Name for Your LLC
Your LLC name must be distinguishable from any other business entity already on file with the Illinois Secretary of State. The name must include “LLC,” “L.L.C.,” or “Limited Liability Company” as a designation. You can search the Secretary of State’s business database online to check whether your preferred name is available before filing.
If you want to reserve a name before you’re ready to file, Illinois allows you to do so for 90 days. This is optional but useful if you need time to finalize your operating agreement or line up funding before officially forming the LLC.
Appoint a Registered Agent
Every Illinois LLC must have a registered agent, which is the person or company designated to receive legal documents and official state correspondence on behalf of your business. The agent must be either an individual who lives in Illinois or a business entity authorized to operate in the state.
The registered agent’s office must have a physical street address in Illinois. A P.O. Box alone does not qualify. If you use yourself as the registered agent, your home or office address becomes part of the public record. Many LLC owners hire a commercial registered agent service to keep their personal address private and ensure someone is always available during business hours to accept documents. These services typically cost between $50 and $300 per year.
File Articles of Organization
The Articles of Organization is the official formation document that creates your LLC. You can file online through the Illinois Secretary of State’s website at apps.ilsos.gov. The filing fee is $150 for online submissions.
During the filing process, you’ll provide your LLC’s name, its principal office address, the registered agent’s name and address, and the name and address of at least one LLC manager or member. You’ll also choose between forming a standard LLC or a Series LLC. A Series LLC is a more complex structure that allows you to create separate “series” within a single LLC, each with its own assets and liabilities. Most small business owners choose a standard LLC. If you’re unsure whether a Series LLC makes sense for your situation, the Secretary of State’s office notes that they cannot advise on that decision.
Standard online filings are typically processed within five to ten business days. If you need your LLC formed faster, Illinois offers expedited processing for an additional fee.
Draft an Operating Agreement
Illinois does not require you to file an operating agreement with the state, but having one is important for any LLC with more than one member, and still valuable for single-member LLCs. This internal document spells out how the business is owned, how profits and losses are divided, how decisions get made, and what happens if a member wants to leave or the LLC dissolves.
Without an operating agreement, your LLC defaults to the rules in the Illinois Limited Liability Company Act, which may not match what you and your co-owners actually want. Banks also frequently ask to see an operating agreement before opening a business account.
Get an EIN from the IRS
An Employer Identification Number (EIN) is a federal tax ID for your business, similar to a Social Security number but for your LLC. You need one if your LLC has more than one member, if you plan to hire employees, or if you want to open a business bank account (which most banks require). Even single-member LLCs with no employees often get an EIN to avoid using their personal Social Security number on business forms.
Applying for an EIN is free and takes just a few minutes on the IRS website. You’ll receive your number immediately after completing the online application.
Register for Illinois Taxes
Depending on what your LLC does, you may need to register with the Illinois Department of Revenue using Form REG-1, the Illinois Business Registration Application. This form covers several state tax accounts at once, including sales tax, withholding tax, and other business taxes.
If your LLC sells physical goods or certain services, you’ll need to collect and remit Illinois sales tax, which means registering for a sales tax account through REG-1. If you hire employees, you’ll also need to register for state income tax withholding through the same form, and separately register for unemployment insurance tax with the Illinois Department of Employment Security using Form REG-UI-1.
Not every LLC needs all of these registrations. A single-member consulting LLC with no employees and no taxable sales, for example, may not need to file REG-1 at all. The requirement depends on your specific business activities.
Open a Business Bank Account
A separate bank account for your LLC is essential. Mixing personal and business funds undermines the liability protection that an LLC provides. If a court finds that you treated LLC money as your own, it can “pierce the corporate veil” and hold you personally responsible for business debts.
To open a business account, most banks will ask for your Articles of Organization, your EIN confirmation letter, and your operating agreement. Some banks also require a copy of your LLC’s formation certificate from the Secretary of State.
File Your Annual Report
Illinois requires LLCs to file an annual report with the Secretary of State each year. The report is due before the first day of the anniversary month of your LLC’s formation. So if you formed your LLC in March, your annual report is due by March 1 of the following year and every year after that. The filing fee is $75.
Missing the deadline triggers penalties. Illinois imposes a late fee, and if you continue to ignore the requirement, the state can administratively dissolve your LLC. Reinstatement after dissolution involves additional fees and paperwork, so it’s worth setting a calendar reminder well ahead of your anniversary month each year. You can file the annual report online through the Secretary of State’s website.
Local Licenses and Permits
Forming your LLC with the state is just the legal creation of the entity. Depending on your industry and location, you may also need local business licenses, zoning permits, or professional licenses before you can legally operate. Many cities and counties in Illinois require a general business license, and certain professions (construction, food service, healthcare, real estate) have their own licensing requirements at the state level.
Check with your local city or county clerk’s office to find out what applies to your specific business and location. These requirements vary widely and are separate from your LLC formation with the Secretary of State.