How to Start an LLC in Illinois

How to start an LLC in Illinois in 6 easy steps

Starting an LLC in Illinois may seem like no easy feat at first, but it can actually be quite simple once you understand all of the steps required. Whether you are trying to convert an existing business into an LLC or you are trying to start up a brand-new Illinois company, this guide can help you progress through every step of the process without too much stress. Below, we will be discussing both federal and state requirements that you need to adhere to when starting your LLC. You’ll also learn how to file any necessary documents and what state business laws you will need to keep in mind. Plus, you’ll learn the best way to establish your LLC for as little as $150!

Step 1. Naming Your Idaho LLC

The name for your LLC is especially important as this is how the public will know your business and what you will write on all necessary legal documents. Below, we discuss some essential Illinois LLC naming rules.

Legally Required Designation

According to Illinois requirements, your LLC name must contain either the phrase “limited liability company” or one of the abbreviations below:

  • LLC
  • L.C.

No other abbreviations or shortening of the “limited liability company” phrase are permitted.

Unique Name

The name that you choose for your LLC must be recognizably different from any other LLC or business in the state of Illinois. You can check to see if your desired name is available by using the business name search on the Illinois Secretary of State website.

If you find an available name and want to reserve it ahead of time, you can file an Application to Reserve a Name to hold the name for up to 90 days before establishing your LLC. There is a $25 fee for filing this form and an additional $50 fee if you want it to be expedited.

Additionally, you may also want to perform a domain name search to secure a website name ahead of time. Even if you don’t anticipate wanting a business website at first, it can be a good idea to purchase a domain name ahead of time to save future stress.

Restricted Words

You must also not include any words in your LLC name that run the risk of confusing your business with a government entity. This can include words like “FBI,” “IRS,” “Treasury,” or “State Department.”

Additionally, using words such as “bank,” “attorney,” or “university” may mean that you need to file additional paperwork for your LLC and that a properly licensed individual needs to be a part of your LLC.

Using an Assumed Name

It is possible to use an assumed, or DBA (doing business as), name while you are operating your Illinois LLC. This type of name is a good idea for anyone who registers their LLC under one available name but wants the name they use with the public to be slightly different or more recognizable.

To file for a DBA name, you will need to complete the Application to Adopt an Assumed Name and send it to the address below. You will need to include a check for the filing fee, which can range from $30 to $150; more details on this fee can be found on the form.

Your assumed name will be valid for up to 5 years and can be renewed with a $150 filing fee.

Secretary of State

Department of Business Services

Limited Liability Division

501 S. Second St., Rm. 351

Springfield, IL 62756

Step 2. Choose a Registered Agent

Also called an Agent for Service of Process in Illinois, every LLC established in the state must appoint a registered agent. The registered agent can be an individual or a business entity, and they will be responsible for receiving all legal documents, government communications, and necessary tax documents, acting as a contact point between your LLC and federal agencies or the state of Illinois.

You can appoint any individual or entity in the state as your regsitered agent, including a registered agent service that is authorized to conduct business in Illinois. As long as your registered agent has a valid Illinois street address and is available during regular business hours, they are eligible to be your registered agent.

Step 3. File Your Articles of Organization

The Articles of Organization are the legal document that officially establishes your LLC with the state of Illinois. Below, we give you an idea of the type of information you will need to include on this form.

  • The name of your LLC
  • Your LLC’s principal office address
  • The date you wish your Articles to be effective, if not immediate
  • Your registered agent’s name and address
  • The purpose(s) for which your LLC is created
  • Your LLC’s duration (either perpetual or a specific time period)
  • The names and addresses of all initial members if your LLC is member-managed, or the names and address of all initial managers if your LLC is manager-managed
  • The names, addresses, and signatures of all LLC organizers

Once completed, you will file your Articles either online or through the mail with the Illinois Secretary of State. There is a $150 filing fee and an additional $100 expedited service fee if you want a quicker turnaround time.


To file your Articles of Organization online, use the Illinois Secretary of State’s website here. Online filings can take up to 10 days to be processed, and you can pay for expedited service to have the documents processed within 24 hours.

By Mail

To file your Articles of Organization by mail, you will need to print and fill out this form, LLC-5.5. Once the form is completed, place it into an envelope with a $150 check made out to the Illinois Secretary of State. Then, send the document to the address below.

Secretary of State

Department of Business Services

Limited Liability Division

501 S. Second St., Rm. 351

Springfield, IL 62756


It can take several weeks for your mail filing to be processed, and expedited filing is not available for this option.

Step 4. Create an Operating Agreement

Your Illinois LLC is not required to have an operating agreement, but you should consider creating one anyway. The operating agreement is an important document that establishes clear and set guidelines for how exactly your LLC is managed, the rights that members or managers have, and what to do in the case that your LLC dissolves or experiences a lawsuit.

It is likely that you will need an operating agreement on hand to open bank accounts or receive funding from lenders, and the agreement can help to establish your LLC as a separately operating business entity.

Keep in mind that if you do not create an operating agreement, Illinois law will dictate how your LLC is to be managed in the event of dissolutions, conflict, or lawsuit. This is something that will likely not be in your best interests.

You may choose to give copies of your LLC operating agreement out to members or managers to ensure all participants are kept up to date with how your business is run.

Step 5. Get an EIN/Tax ID Number

Once the Articles of Organization has been processed and your LLC has been legally established, you will need to apply for a Tax ID number, also known as an EIN (Employer Identification Number). The EIN is provided by the IRS and is required for any LLC that has more than one member, or for any single-member LLC that wants to hire employees or chooses to be taxed as a corporation.

You will use your EIN to identify your business to the IRS on all tax documents and necessary government filings; the number acts much like a social security number for your LLC. If you want to hire employees, file federal taxes, open business bank or credit accounts, or apply for business funding, you will need an EIN.

It is free to apply for your EIN with the IRS, and you can file the application online or by mailing it in. Keep in mind that if you are a foreign filer or do not have a social security number, you will need to file for your EIN through the mail.


Visit the IRS website to apply for your EIN for free. This is the quickest and easiest way to apply for an EIN, as you will receive your number once your application is complete. It takes about 10 to 20 minutes to fill out the necessary information.

By Mail

When applying for your EIN by mail, you will first need to fill out this form. If you are a foreign filer or do not have a social security number, leave section 7b blank. Mail the completed form to the address below, and follow up on any questions with the IRS at (267) 941-1099.

Internal Revenue Service

Attn: EIN Operation

Step 6. Keeping Your LLC Running

After you have filed all necessary paperwork and received your EIN (when applicable), it is time to start conducting business under your LLC! There are a few things to keep in mind to make sure that your LLC runs legally and smoothly in all circumstances.

Pay Annual Registration Fees

Annual reports are required for all Illinois LLCs. These filings are intended to keep the state up to date on everything that has to do with your LLC, and can be filed either online or by mail. There is a $75 filing fee for the report and an additional $50 optional expedited service fee when filing online.

The report is due each year on the first day of the month during which your LLC was formed. For example, if you officially established your LLC on October the 15th, your annual report would be due on October the 1st of the next year, and each year thereafter.

If you file a report more than 60 days past your LLC’s due date, the report will be regarded as late and will incur an extra $100 penalty fee. If you don’t file your report on an annual basis, you run the risk of the state dissolving your LLC.

To file online, use the Illinois Secretary of State’s website. If you want to file by mail, fill out form LC-50.1 and mail it to the address below.

Secretary of State

Department of Business Services

Limited Liability Division

501 S. Second St., Rm. 351

Springfield, IL 62756

Separate Your Business Finances

While not required by the state of Illinois, it can be a good idea to open up a business credit or debit account in the state. Doing this can help you keep your LLC’s finances separate from your personal ones, further protecting your personal assets in the event that your LLC experiences a lawsuit. A separate bank account can also help show that your LLC is an individually operating business and may help you secure future funding.

To open a bank account for your business, you will likely need your Articles of Organization, Operating Agreement, EIN, and possibly other LLC documents. Some banks may require different information, so be sure to check what is needed before you go to open an account.

You should also keep in mind that business bank accounts often have varying required minimum balanced or credit spending limits, so you should be sure to compare all of your options before making a choice to ensure you get the best business account for your LLC’s needs.

Keep up With Federal and State Taxes

It is important that you keep up to date with all federal and state tax filing requirements if you want your LLC to stay running legally and without major issues.

Illinois State Business Taxes

In most cases, your LLC will be required to pay state income tax at a rate of 4.95% of net income on any business income earned. This rate will be calculated on your individual tax return. There may be additional taxes if your LLC is being taxed as a corporation.

You can find more information about state business income taxes on the Illinois Department of Revenue website here.

Illinois Sales Taxes

If your LLC will be selling goods or services, you will be required to collect sales tax and pay taxes to the Illinois Department of Revenue. You can register to pay taxes online or by filling out form REG-1 and mailing it to the address below. It will take up to a week to process this form when filed online or 6 to 8 weeks to process through mail filing.

Central Registration Division

Illinois Department of Revenue

PO Box 19030

Springfield IL 62794-9030

State Employer Taxes

If your LLC will have employees, you must register for Withholding Tax with the Illinois Department of Revenue. You can register for these taxes through the online portal, where you will also find information about how much tax to withhold and how often to pay taxes.

You must also register for Unemployment Taxes through the Illinois Department of Employment Security. This can also be done online.

Keep in mind that you may also be required to pay federal Withholding and Unemployment Insurance tax, so be sure to check the federal requirements or consult with a professional tax adviser if you are confused about what you owe.

Federal Tax Requirements

After your LLC is established, there are several different tax structures you can choose from that may meet different company needs. This article can help you gain an in-depth understanding of the differences between each type and help you decide which is best for you.

In general, most LLCs are taxed as sole proprietorships or partnerships. This means that they will be expected to file an individual income tax return with the IRS that also contains a Schedule C, where the LLC’s income is reported. When using this tax structure, you should keep in mind that you will most likely need to pay self-employment tax (which has a rate of 15.3%), in addition to any income tax. You may also need to make quarterly estimated tax payments to avoid any IRS fines; the IRS website gives more details on this.

Electing to be Taxed as a Corporation

If you want, you can choose to have your LLC taxed as a corporation, like an S Corporation or a C Corporation. You will need to fill out IRS Form 8832 and IRS Form 2553 to declare this. After these forms have been processed, your LLC will be treated as a corporation and expected to file a separate corporate tax return with the IRS.

It may be a good idea to consult with a professional financial advisor or accountant to help you decide which tax structure is the best for you and to make sense of any federal tax obligations, so you don’t miss any requirements and get hit by unexpected IRS penalties.

Acquire Necessary Permits and Licenses

Illinois does not have a state-wide business license requirement, but the city or county that your LLC is located in might. You should check with the city or county clerk’s office in the area that your LLC is located to figure out if a business license is required or not. You can visit the Illinois First Stop Business Center if you want assistance or need more information about business licensing.

Additionally, depending on the type of business you have, you may need to obtain and display professional licenses. This is typically required in cases where your LLC will be offering legal, cosmetic, or other advising services. Again, make sure to check with your locality’s clerk’s office and the Illinois First Stop Business Center for more information.

You may also be required to obtain certain permits and licenses for your LLC on a federal level. Again, this depends mostly on the type of business you are running and the services you are offering.

For help determining if you need to meet additional federal licensure requirements, you can use the directory on the US Small Business Administration’s website.

Illinois LLC Resources

This collection of resources for starting your LLC can help guide you through every step of the Illinois LLC establishment process.

Illinois LLC FAQs

These frequently asked questions can help answer any remaining worries you may have about legally establishing your LLC in Illinois.

To set up an LLC in Illinois, it will cost you $150 as you file the Articles of Organization. It may cost you an extra $25 to reserve an LLC name ahead of time, and an extra $100 fee if you want expedited filing for your formation.

You may also need to pay extra fees for filing an Application to Adopt an Assumed Name.

The cheapest way to start your Illinois LLC would be to file your Articles of Organization online without paying for expedited services, reserving a name ahead of time, or filing for a DBA name. This way, you will pay only $150 to get your LLC up and running.

How much your Illinois LLC pays in taxes depends on the tax structure that you are operating your business with. All LLCs will be subject to a state income tax, in addition to any federal taxes, and you may need to pay additional fees if you want your LLC to be taxed as a corporation.

You will be required to file a state report with Illinois on an annual basis. The report costs $75 to file, with an additional optional $50 expedited service fee. You can file either online or by mail, and the report will be due by the first day of the anniversary establishment month for your LLC every year.

How long it takes to establish your Illinois LLC depends on whether you file online or by mail, and if you pay for expedited services. Filing online can have your LLC set up within a week or two, or within 24 hours if you pay for the expedited fee.

Filing by mail takes the longest, and it can take between 4 and 8 weeks for your LLC to be officially established this way.

Once you are done conducting business under your LLC, you will need to file the Articles of Dissolution with the Illinois Secretary of State. There is a $100 filing fee for this form.

You will also need to consult your operating agreement for how to tie up any loose ends and conduct the final business of your LLC. More information about dissolving your Illinois LLC can be found here.

Team BusinessNerd

Our team of legal experts and business professionals have years of experience and are dedicated to providing accurate and up-to-date information to our readers.

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