To open an LLC in Illinois, file Articles of Organization (Form LLC-5.5) with the Secretary of State and pay the $150 filing fee. Before you file, you need a compliant name and an Illinois registered agent; after you file, a short list of follow-up steps keeps the LLC legally valid and preserves the liability protection that makes the structure worth having in the first place.
Pick a Name That Clears the State’s Rules
Your LLC’s name has to include “Limited Liability Company,” “L.L.C.,” or “LLC,” and it cannot include words like “Corporation,” “Corp.,” “Incorporated,” “Inc.,” or “Limited Partnership,” which point to different business structures.1Illinois General Assembly. Illinois Code 805 ILCS 180 – Limited Liability Company Act
The name also has to be distinguishable from every other entity already on file with the Secretary of State, including other LLCs, corporations, and reserved names.2Legal Information Institute. Illinois Admin Code Title 14 Section 178.135 – Distinguishable Defined Run the Business Entity Search on the Secretary of State’s website before you commit. If you’ve found the name but aren’t ready to file, you can reserve it for $25.3Illinois Secretary of State. Limited Liability Company Publications and Forms
Appoint a Registered Agent in Illinois
Every Illinois LLC needs a registered agent with a physical street address in the state. The agent accepts legal documents and official mail for the LLC and can be either an Illinois resident or a business entity authorized to operate here.1Illinois General Assembly. Illinois Code 805 ILCS 180 – Limited Liability Company Act P.O. boxes don’t qualify, and the agent’s name and address become part of the public record.
You can serve as your own registered agent to save money. The trade-offs: you need to be available at that address during business hours to accept service of process, and your home address goes into a public database. Professional registered agent services typically charge between $35 and $300 per year.
File the Articles of Organization
The Articles of Organization (Form LLC-5.5) is the document that officially creates your LLC. Illinois law requires it to include:4Justia Law. Illinois Code 805 ILCS 180 – Article 5 Organization
- The LLC’s name and principal address (the principal address does not have to be in Illinois).
- A statement of business purpose, which can be as general as “to engage in any lawful business.”
- The registered agent’s name and Illinois office address.
- A statement that the LLC has at least one member at the time of filing.
- The names and business addresses of all managers, or of any member with manager-level authority.
- The LLC’s duration, which is perpetual by default unless you specify otherwise.
- The name and address of each organizer. Organizers don’t have to be members, but they must be at least 18.
File online through the Secretary of State’s website, by mail, or in person. The standard filing fee is $150, and $100 more buys expedited 24-hour processing.3Illinois Secretary of State. Limited Liability Company Publications and Forms Online filings are processed fastest even without the expedited fee; mail filings can take several weeks. The LLC officially exists once the Secretary of State files the Articles, or on a later date you specify, up to 60 days after filing.4Justia Law. Illinois Code 805 ILCS 180 – Article 5 Organization
Decide How the LLC Will Be Managed
Illinois defaults to member-managed, meaning every owner has equal authority to run the business and bind it in contracts.5Illinois General Assembly. Illinois Code 805 ILCS 180/15-1 You don’t need to do anything extra if that’s what you want.
If you’d rather have designated managers running the business while other members stay passive, state that in your Articles of Organization or your operating agreement. Manager-managed structures suit LLCs with passive investors or enough members that collective decision-making gets unwieldy. Even then, members still vote on major structural decisions like mergers or dissolution.
Settle this before you file. The Articles ask for the names of all managers or members with manager authority, so the choice is baked in from day one.
Write an Operating Agreement
Illinois doesn’t require you to file an operating agreement with the state, but any LLC with more than one member needs one. The agreement spells out ownership percentages, how profits and losses are split, what happens when a member wants to leave, and how major decisions get made. Without it, you fall back on the default rules in the Illinois LLC Act, which may not reflect what you and your co-owners actually agreed to.
Single-member LLCs benefit too. An operating agreement reinforces the separation between you and the business, which matters if the LLC’s liability protection is ever challenged. Creditors trying to hold you personally responsible will point to a lack of formal business practices as evidence that the LLC is just an alter ego, and an operating agreement, along with separate finances and real record-keeping, makes that argument much harder to win.
Get an EIN and Open a Business Bank Account
An Employer Identification Number is a federal tax ID from the IRS. You need one if your LLC has more than one member, if you’ll hire employees, or if you’ll file excise tax returns.6Internal Revenue Service. Single Member Limited Liability Companies A single-member LLC with no employees technically doesn’t need one and can use the owner’s Social Security number for federal taxes. Most banks require an EIN to open a business account, though, so most owners apply anyway.
The application is free and takes about five minutes on the IRS website; you get your number as soon as you finish the online interview.7Internal Revenue Service. Employer Identification Number Then open a dedicated business bank account. Banks will ask for the EIN and a copy of your Articles of Organization. Keeping business and personal money completely separate isn’t optional if you want the liability shield to hold.
Choose a Federal Tax Classification
An LLC has no federal tax category of its own. The IRS assigns a default based on how many members you have. A single-member LLC is treated as a sole proprietorship, with all income flowing through to your personal return. A multi-member LLC is treated as a partnership, filing Form 1065 and passing each member’s share to their personal return.8Internal Revenue Service. LLC Entity Classification
You can override the default. An LLC can elect C corporation treatment by filing Form 8832.9Internal Revenue Service. About Form 8832, Entity Classification Election It can also elect S corporation status by filing Form 2553, which must be submitted no later than two months and 15 days after the start of the tax year the election applies to.10Internal Revenue Service. Instructions for Form 2553 S corp status can lower self-employment tax for profitable LLCs, but it comes with restrictions, including a 100-shareholder cap and a single class of ownership. Talk to an accountant before you elect; reversing the choice is much harder than making it.
Register for Illinois Taxes and Local Licensing
Illinois has no general statewide business license. If your LLC will collect sales tax, withhold income tax from employees, or otherwise owe state tax, register with the Illinois Department of Revenue through the MyTax Illinois portal.11Illinois Department of Revenue. Business Registration
Your city or county may require its own license or permit. Chicago has its own licensing rules that differ from downstate municipalities, so check with your local government about what your business type and location require.
File the Annual Report to Stay in Good Standing
Illinois requires every LLC to file an annual report with the Secretary of State. The report updates basic information like the registered agent, principal address, and manager names. It’s due within the 60 days before the first day of your LLC’s anniversary month. Form the LLC in August, and the window runs from roughly early June through the end of July.12Illinois General Assembly. Illinois Code 805 ILCS 180/50-1
The annual report fee is $75, with an optional $50 expedited processing fee.3Illinois Secretary of State. Limited Liability Company Publications and Forms Missing it is where a lot of LLC owners stumble, and the consequences run past a late fee. The Secretary of State can administratively dissolve your LLC for failing to file, failing to maintain a registered agent, or failing to pay required fees. A dissolved LLC can no longer legally do business, and you may lose the personal liability protection the LLC was supposed to provide.
Reinstatement is possible but expensive: a $200 reinstatement application, every missed annual report fee, and $100 in late penalties per missed report. If another business grabbed your name while you were dissolved, you’ll also have to pick a new one. Put the annual report on your calendar and file on time.