An Illinois LLC (Limited Liability Company) is a legal entity you can create to protect your personal assets in the event of a lawsuit against your business.
An Illinois LLC can be formed to run and manage a business or to purchase assets such as real estate and aircraft.
It’s easy to create an LLC in Illinois. The cost of this document is $150. You can apply online or by mail.
A simple guide to starting an LLC Illinois by 2021
Step 1 – Name your LLC (“Limited Liability Company”)
First, you must choose a name for your LLC. It must comply with Illinois LLC naming regulations. Potential clients can also search for the name.
- Your name must include the phrase “limited liability corporation” (or one of its abbreviations), L.L.C.
- Names that might cause confusion between your LLC and government agencies such as FBI, Treasure, State of Department, or State of the Union cannot be included in your name.
- Additional paperwork may be required for certain words, such as Bank, Attorney, or University. A licensed person, such as a lawyer, doctor, or doctor, may be required to join your LLC.
- You must distinguish your business name from any Illinois corporation, limited liability company, or partnership.
The complete list can be found in the Illinois naming guide. Here is some additional information.
The legal name of your LLC must be unique and can not conflict with any other registered name.
|Name Search:||Illinois Secretary of State – Business Services Department
|Suffix:||Shall contain the terms “limited liability company”, “L.L.C.”, or “LLC”, or, if organized as a low-profit limited liability company under Section 1-26 of this Act, shall contain the term “L3C”. Shall consist of letters of the English alphabet, Arabic or Roman numerals, or symbols capable of being readily reproduced by the Office of the Secretary of State; shall be the name under which the limited liability company transacts business in this State unless the limited liability company also elects to adopt an assumed name or names as provided in this Act; shall contain the word “trust”, if it is a limited liability company organized for the purpose of accepting and executing trusts.
805 ILCS §180/1-10
Next, verify that the Illinois name is still available. To make sure the name you’re interested in isn’t already owned by someone else, visit the Secretary of State Cyberdrive Illinois website.
You can also check URL availability online.
Even if your goal is to build a website for your business website, it’s possible to purchase the URL or book it.
FAQ [Naming an Illinois LLC]
What’s an LLC?
LLC stands for Limited Liability Company. This is a simpler structure than a traditional corporate. The LLC offers greater flexibility than traditional corporations, but it still has many of the same advantages.
What are the steps to get a DBA or Trade Name for my business?
Most LLCs do not require a DBA. You can use the name of the LLC as your company’s brand name. You can accept checks and other payments under that name. However, you may need to register a DBA if you wish to do business under a different name.
Step 2 – Select an Illinois Registered Agent
To start an LLC, the Secretary of State will require that you name a registered representative.
Your responsibility is to ensure that the registered agent you nominate for your LLC is either a resident of Illinois or a corporation (such a registered service) authorized to transact business in Illinois.
FAQ (Nominating an Illinois Registered Agent)
Can I be my own registered agent for Illinois?
You or someone from your company can register as an agent for an Illinois LLC. Other requirements must be met.
Is it worthwhile to pay for a registered agent?
A registered agent can help you manage your Illinois LLC’s government filings.
Step 3 – Filing the Illinois LLC Articles of Organization
To register your Illinois LLC, you will need to submit your Articles of Organization online or by mail. It is the best time to determine if your LLC will be member-managed.
Articles should contain
- Name and contact information for the LLC’s founder
- Name and Address of the LLC
- Name, address, and signature must be provided by the registered agent of the LLC.
- Address and name of up to one manager or member
- The email address for the LLC,
- Signed By The Organizer
File the ARTICLES OF ORGANIZATION
Option 1 – File online with Cyberdrive Illinois
Option 2 – Fill out the Form LLC-5.5 in Person or by Mail
State Filing fee: $150 (non-refundable).
Mailing address: Department of Business Services Limited Liability Division
501 S. Second St. RM. 351
Springfield, IL 62746
You can expand your LLC to Illinois by filling out the Foreign LLC Form.
File the articles of organization to create your limited liability company.
|Agency:||Illinois Secretary of State – Business Services Department|
|Form:||Form LLC 5.5: Articles of Organization|
|Instructions:||Pub c334: A Guide for Organizing Domestic Limited Liability Companies|
|Filing Method:||Mail, fax (only if you have a prepaid account), or online|
|Agency Fee:||$150 + optional $100 expedite fee. The expedite fee is required if you file online.|
|Turnaround:||~2 weeks by mail or fax. ~1 business days with $100 expedite fee.|
|Law:||805 ILCS 180|
|Reference:||State of Illinois|
Visit The State of Illinois website for current fees and procedures
FAQ (Filing Illinois LLC Documents)
How long does it take to form an LLC in Illinois
It takes about 10 business days to file the Articles of Organization online with the Illinois Secretary of State. For an additional fee, expedited processing can be arranged.
What is the difference between a domestic and foreign LLC?
An LLC called a “domestic LLC” means that it does business in the state where it was established. However, if an LLC wishes to expand its business to another state, it will need to form a foreign LLC.
How much does it cost to start an Illinois LLC?
An Illinois LLC can be opened for $150.
Step 4 – Establish an Illinois LLC Operating Agreement
While an operating agreement does not have to be required to create an LLC in Illinois, it is beneficial. This will reduce the likelihood of future conflicts.
This document describes the structure of your LLC, as well as the rights and responsibilities of each member. It also describes how the LLC will function.
FAQ: How to Create an Illinois LLC Operating Agreement
Do you need to file an operating agreement in Illinois?
Illinois’ Secretary-of-State does not require an operating agreement. But, many states require operating agreements.
Step 5 – Get an Illinois LLC EIN
EIN stands for Employer Identification Number. It is a nine-digit number that Internal Revenue Service (IRS) uses to identify businesses.
Sometimes an EIN can also be called a Federal Tax Identification Number or Federal Employer Identification Number. Your company will need an EIN to open a bank, manage Federal and State taxes and hire employees.
Your business can get an EIN for free. It is possible to request an EIN online or via post.
Get an EIN
Option 1 – Request an IRS EIN
Option 2 – Apply by Fax, Mail, or Email for an EIN
Send mail at:
Internal Revenue Service
Cincinnati, OH 45999
Fax: (855) 641-49935
FAQ: How do I get an Illinois LLC EIN
What happens if I don’t have a Social Security Number.
An Illinois LLC’s EIN can be obtained without a social security number. You can complete the IRS Form SS-4.
What tax structure should I use to fund my Illinois LLC?
When you apply for an EIN, you will be informed of the tax classification options.
What EIN should I have for my LLC?
All LLCs with employees or more than one member need an EIN.
Important Steps After Creating a Limited Liability Company
Separate personal and business assets
You can protect your LLC by taking these steps in Illinois if your Illinois personal and business accounts are combined.
This is a crucial step as it allows you to separate your company and personal assets. This is important for personal asset protection. It will also make it easier to file tax returns and do business accounting.
While it’s not a requirement, it’s a good practice that business owners can follow to help manage their expenses. Credit can also be used to increase your credit score, which can come in handy when you borrow small business loans.
You can manage your company’s books yourself, but it is better to hire a business accounting. They have the expertise and experience to ensure that your company doesn’t overpay taxes. They can also avoid penalties and fines that could result in costly tax errors.
An accountant can simplify bookkeeping and payroll. You can focus on what you do best, which is managing your bookkeeping and payroll.
Get business coverage for your LLC.
Personal insurance is just as important as business insurance. With business insurance, you can focus on your LLC’s growth here in Illinois.
General Liability InsuranceThis policy protects your Illinois LLC from lawsuits. Small businesses can protect their assets by purchasing general liability insurance.
Professional Liability InsuranceThis insurance is only for professionals like accountants and consultants. This insurance covers against any malpractice claims or other business mistakes.
Workers’ Comp InsuranceThis insurance covers employees against job-related illnesses and deaths. If your LLC employs employees, this insurance is worth looking into.
Create your website
A website is an essential step in legitimizing your Illinois LLC.
Many business owners worry that building a website will be too complicated for them because they lack experience.
These are all the reasons why you should seriously consider building a website for your business.
- Every legitimate business needs a website. No matter how small or large your business, it is possible to create an online business.
- These social media profiles (such as Facebook pages or business profiles on LinkedIn) are not enough and should not replace your business website.
- There are many website builders available online, like GoDaddy Website Builder. These website builders make it easy for you to create a website you love.
Send a press release.
While it is not necessary to form an LLC by the Illinois Secretary of State, press releases are a great marketing strategy and can offer many benefits like:
- Excellent publicity
- It is vital to have your brand online
- Increase your SEO to drive more customers towards your website
- One-time cost in terms of money and time
- Get long-lasting, sustainable benefits
Keep your Illinois company compliant
Illinois Business Permits & Licenses
Do you need permits or licenses to operate a business?
To operate an LLC in Illinois, you must comply with all federal, state, and local regulations.
Each state has its own requirements for business licenses and permits.
These are the easiest ways to get Illinois business licenses and permits for your LLC. Professionals can also be hired to do them.
Federal Use the U.S. Small Business Administration guide to obtaining federal business permits or licenses.
State register at the Illinois Licenses & Permits website to apply for licenses or permits
local information on permits and licenses available for local businesses, ask your county clerk.
It is a smart idea to have someone review your licensing requirements for first-time entrepreneurs.
Illinois LLC Tax Filing Requirements
Your business’s nature may require you to register for a variety of state taxes.
Illinois Sales tax
If you sell physical products, you will need to register with MyTax Illinois to obtain a seller’s license. This certificate allows you to collect sales tax on taxable sales.
The sales tax (also known as the “Sales and Use Tax”) is a tax that states and counties levy on transactions that involve certain taxable goods or services.
Illinois Employer taxes
Register for Illinois Employer taxes if you are involved in hiring employees. This includes employee withholding tax and unemployment insurance tax.
Federal LLC Tax Filing Guidelines
Most, if not all, LLCs in Illinois will need to fill out the following forms to report their income to the IRS each year:
- Form 1065 Partnership report (most multi-member LLCs use this form)
- Schedule C 1040 (most single-member LLCs utilize it)
Remember that the way you pay yourself as an owner of a company will impact your federal taxes.
Your Illinois LLC Annual report
An Illinois LLC will require that you file an annual report with the Illinois Secretary of State.
Illinois LLC Annual Release
Option 1 – File online with Secretary of State
Option 2 – File by Mail or In Person
Fee: $150 online and $74 by mail (nonrefundable).
Send mail at:
Department of Business Services
Limited Liability Division
501 S. Second St. Rm 251
Springfield, IL 62756
Due Date: Each year before the first day of the month, your LLC was formed. Reports can be filed up to 60 days in advance.
Late filings are subject to a $74 fee by mail and $125 online filing fees. If your Illinois LLC fails to file its annual report within 180 days, it could be dissolution.
Avoid Automatic Dissolution
Failure to file any state filings can lead to penalties or even dissolution for Illinois LLCs. They will notify you of upcoming filing deadlines and help you to submit reports.
Illinois Workers to Hire
If you are an Illinois LLC owner and plan to hire employees, these steps will be necessary.
- All new employees are allowed to work in the USA with valid work passes
- Employers as “new hires” from the State
- Workers’ compensation insurance for employers
- Employer taxes withheld
- Display compliance posters prominently in your workplace.
FAQ (Hiring Employees).
What’s the minimum wage in Illinois?
The minimum hourly wage in Illinois is $11.00. In Chicago, it is $13.50.
How frequently do I need to pay Illinois employees?
Illinois law requires that employees receive their wages at least twice per month. Except for professional, executive, and administrative employees defined in the Federal Fair Labor Standards Act of1939, this is not required. According to the Illinois Employment Statutes, these wages can be paid once per month.
More Illinois LLC Information
Illinois Foreign LLCs
Foreign LLCs allow you to operate your business in multiple states as one entity.
REGISTER ILLINOIS FOR A FOREIGN LLC
Write a letter to the Secretary Of State
Send mail at:
Department of Business Services
Limited Liability Division
Springfield, IL 62756
You should also note that any request to obtain a certificate of good standing must be accompanied by a Certificate from the Secretary of State where the LLC was established.
How to obtain a Certificate of Good Standing in Illinois
A Certificate of Good Standing certifies your Illinois LLC is legally established and properly managed. In certain situations, a Certificate of Good Standing may be required.
- Lenders and banks may be able to fund your project.
- You can, for example, form a foreign LLC to start your own business.
- Renewing and obtaining certain business licenses or permits
You can order an Illinois LLC Certificate Of Legal Existence online or by mail.
ORDER A Certificate of Legal Existence
Option 1 – Request a Certificate Online through the Illinois Secretary of The State Department
$25 Non-Refundable Fee
How can you dissolve an Illinois LLC
If you want to cease doing business with your Illinois LLC in the future, it is important that you correctly dissolve it.
- Open your tax accounts for business.
- Filled Illinois Articles of Dissolution
Questions Other Than Frequently Asked
Do you need an LLC?
An LLC is a great idea for anyone starting a business or if they have been sole proprietors. LLCs also offer greater flexibility for business management, ownership, and taxation.
How do I check if my LLC’s name has been taken?
Illinois LLCs need to have a unique name that is different from other businesses.
How much does it cost to form an LLC (Limited Liability Company) in Illinois?
The Secretary of State Department will require a $150 filing fee for articles of organization.
While filing the documents yourself is the best option, it can be time-consuming and costly.
What operating agreements do I need to establish Illinois LLCs
Even though Illinois State does not require LLCs to have operating agreements, it’s strongly recommended. It will help protect your limited liability status and prevent miscommunications in financial and managerial matters. This will allow you to determine the rules that govern your company and not state law.
Can an LLC from abroad do business in Illinois?
LLCs must register with the Illinois Secretary of State Department to conduct business in Illinois.
Is it possible to form an LLC in Illinois with one member?
For most purposes, a single-member LLC in Illinois can be the same entity as an LLC with multiple members. These steps are identical to those listed above.
How can I dissolve an LLC?
You can shut down your business to limit your liability in case of a lawsuit, government fee, or other legal proceedings.