To form an LLC in Illinois, file Articles of Organization (Form LLC-5.5) with the Secretary of State and pay a $150 filing fee. Before you file, you need a compliant name and an Illinois registered agent. After the state approves your formation, you’ll get a federal EIN, register with the Illinois Department of Revenue if it applies to your business, and plan for an annual report each year. Straightforward online filings are typically approved within a few business days.
Pick a Name That Will Clear the State’s Review
Your LLC name must end with “Limited Liability Company,” “LLC,” or “L.L.C.”1Illinois General Assembly. Illinois Code 805 ILCS 180/1-10 – Limited Liability Company Name
It also has to be distinguishable from every other business entity already on file with the Secretary of State, including existing LLCs, foreign LLCs registered in Illinois, reserved names, assumed names, and corporate names. The Secretary of State makes the final call on whether two names are too similar.1Illinois General Assembly. Illinois Code 805 ILCS 180/1-10 – Limited Liability Company Name Search the Secretary of State’s online business database before filing to avoid a rejection.
If you’ve settled on a name but aren’t ready to file, Illinois lets you reserve it for 90 days for a $25 fee. That gives you time to line up financing or finalize your operating agreement without losing the name.
Designate a Registered Agent
Every Illinois LLC must maintain a registered agent with a physical street address in the state. The agent receives legal notices and official correspondence, including lawsuits. An individual agent must be an Illinois resident; a business entity authorized to operate in Illinois can also serve.2FindLaw. Illinois Code 805 ILCS 180/1-35 – Registered Office and Registered Agent
P.O. boxes don’t qualify. You can name yourself, but two things follow: your address becomes part of the public record, and you need to be at that address during business hours to accept service. Commercial registered agent services typically cost $50 to $300 per year and keep your address off public filings. If you ever fail to maintain a registered agent, the Secretary of State can administratively dissolve your LLC.
File Form LLC-5.5
Form LLC-5.5, the Articles of Organization, brings your LLC into legal existence. You can file online through the Secretary of State’s portal or mail a paper form to the Department of Business Services in Springfield. Online is faster.
The form asks for:
- The LLC name, with its required designator.
- Principal place of business (the address where records are kept; does not have to be in Illinois).
- Effective date — the filing date by default, or a future date up to 60 days out.
- Registered agent name and Illinois street address.
- Purpose. Most filers use a general purpose clause covering any lawful business activity, which avoids amending the articles later.
- Duration, which is perpetual unless you specify an end date.
- Management structure: member-managed or manager-managed.
The management choice matters more than it looks. In a member-managed LLC, all owners share authority over daily operations. In a manager-managed LLC, one or more designated managers run the business while other members function as passive investors. Solo founders almost always go member-managed. Multi-member LLCs with hands-off investors should consider manager-managed.3Illinois Secretary of State. Limited Liability Company Act Filing Information
The standard filing fee is $150.4Illinois Secretary of State. Limited Liability Company Publications and Forms Expedited processing costs an additional $100. Once approved, you’ll receive a stamped copy of the articles or a certificate of organization confirming your LLC exists.
Put an Operating Agreement in Place
An operating agreement is the internal rulebook for your LLC: how profits and losses are split, voting rights, how members join or leave, and what happens if a member dies or becomes incapacitated. Illinois law says members “may” enter into an operating agreement, so it’s not technically mandatory.5Illinois General Assembly. Illinois Code 805 ILCS 180/15-5 – Operating Agreement
Skipping it causes problems. Without a written agreement, the default rules in the Illinois LLC Act govern internal affairs, and those defaults rarely match what members actually wanted. Courts also look at whether an LLC kept proper internal documentation when deciding whether to hold members personally liable for business debts. A signed operating agreement is evidence that you treated the LLC as a separate entity.
You don’t file it with the Secretary of State. Keep a signed copy at the principal place of business and give each member their own.
Get an EIN and Set Your Federal Tax Classification
Once the state approves your formation, apply for a Federal Employer Identification Number on the IRS website. The IRS recommends forming your state entity first, because applying for an EIN before your LLC exists in state records can delay processing.6Internal Revenue Service. Get an Employer Identification Number You need an EIN to open a business bank account, hire employees, and file federal tax returns. The online application is free and gives you the number immediately.
The IRS doesn’t treat LLCs as their own tax category. A single-member LLC is taxed as a disregarded entity, so income passes through to your personal return. A multi-member LLC is taxed as a partnership by default.7Internal Revenue Service. Limited Liability Company (LLC) In both cases, the LLC itself pays no federal income tax; the members do.
You can change that. File Form 8832 for corporate tax treatment, or Form 2553 for S-corporation treatment, which can reduce self-employment taxes for owners who pay themselves a reasonable salary.8Internal Revenue Service. S Corporations For a calendar-year LLC, the S-corp election is due by March 15 of the year you want it to take effect, or within two months and 15 days of formation in your first tax year. Miss the window and you wait until next year.
Register for Illinois Taxes
Illinois adds its own layer. The one that catches new owners off guard is the Personal Property Replacement Tax. Partnerships and S-corporations pay a 1.5% replacement tax on net Illinois income. If your LLC is taxed as a partnership, file Form IL-1065 by the 15th day of the fourth month after your tax year ends. If taxed as an S-corporation, use Form IL-1120-ST, due by the 15th day of the third month after your tax year ends.9Illinois Department of Revenue. Personal Property Replacement Tax
Beyond the replacement tax, register with the Illinois Department of Revenue for any obligations that fit your business. Selling tangible goods means collecting and remitting Illinois sales tax. Hiring employees means withholding Illinois income tax from paychecks. Online registration is fastest; paper registration takes four to six weeks to process.
Employers also take on federal employment taxes: withholding federal income tax and FICA, plus paying the employer’s share of Social Security and Medicare. Federal Unemployment Tax (FUTA) applies once you’ve paid $1,500 or more in wages in any calendar quarter, or had at least one employee for part of a day in 20 or more weeks during the year.10Internal Revenue Service. Topic No. 759 – Form 940 FUTA Tax Return
File Your Annual Report
Illinois requires every LLC to file an annual report with the Secretary of State. It’s due before the first day of the anniversary month of your LLC’s formation. If your LLC was formed on June 15, the report is due by June 1 each year. The filing fee is $75, and late filings incur a $100 penalty.11Illinois Secretary of State. LLC Annual Report Instructions Failing to file will eventually lead to administrative dissolution.
The report itself is short. You’re confirming that your registered agent, principal address, and management structure are still current. The deadline is easy to miss because it’s tied to your formation date rather than a fixed calendar date.
Local Licenses and What You Don’t Need to File
Depending on where your LLC operates, you may need local business licenses or permits from your city or county. These vary by municipality and industry, so check with your local clerk’s office. Some Illinois cities charge flat annual fees while others base costs on revenue or number of employees.
One federal requirement you can skip: beneficial ownership information (BOI) reporting to FinCEN. As of March 2025, domestic entities, including LLCs formed in any U.S. state, are exempt from BOI reporting. The requirement now applies only to foreign companies registered to do business in the United States.12FinCEN. Beneficial Ownership Information Reporting Older guides that tell you to file a BOI report with FinCEN are outdated for domestic LLCs.