To set up an LLC in Illinois, you file Articles of Organization with the Secretary of State and pay a $150 filing fee. Before and after that filing, a handful of other steps — picking a compliant name, naming a registered agent, getting an EIN, registering for state taxes, and keeping up with the $75 annual report — turn the paperwork into a working business. Here’s how each piece fits together.
Pick a Name That Will Clear the State’s Database
Your LLC’s name has to be distinguishable from every other business entity already on file with the Secretary of State, and it has to include “Limited Liability Company,” “L.L.C.,” or “LLC.”1Illinois General Assembly. Illinois Code 805 ILCS 180/1-10 – Limited Liability Company Name Run your proposed name through the Secretary of State’s online business database before you do anything else; if it conflicts with an existing entity, the filing gets rejected.
A few words carry extra baggage. “Bank,” “Banking,” “Insurance,” and similar terms require written approval from the relevant state regulator before the Secretary of State will accept the filing. The exception: if “Bank” is simply someone’s surname and the LLC isn’t in the financial business, that restriction doesn’t apply.2LII / Legal Information Institute. Illinois Administrative Code Title 14 Section 178.165 – Restricted and Professional Words
If you want to lock in a name while you finish the rest of the formation work, you can reserve it for $25.3Justia. Illinois Code 805 ILCS 180 Article 50 – Fees and Other Matters
Appoint a Registered Agent in Illinois
Every Illinois LLC has to continuously maintain a registered agent and a registered office in the state. The agent can be an individual Illinois resident or a business entity authorized to operate in Illinois.4Illinois General Assembly. Illinois Code 805 ILCS 180/1-35 – Registered Office and Registered Agent The registered office needs a physical street address, because the agent’s job is to accept service of process and official state mail on your behalf. A P.O. box won’t satisfy the requirement.
You can serve as your own agent if you live in Illinois. A lot of owners who work from home pay a commercial registered agent service instead, mostly to keep their home address off public filings. If your agent ever resigns, you have 60 days to appoint a new one before the state flags a compliance problem.4Illinois General Assembly. Illinois Code 805 ILCS 180/1-35 – Registered Office and Registered Agent
File the Articles of Organization
Articles of Organization (Form LLC-5.5) are what actually create the LLC. The statute requires:5Illinois General Assembly. Illinois Code 805 ILCS 180/5-5 – Articles of Organization
- The LLC’s name and principal office address (the principal office does not have to be in Illinois).
- The business purpose. Most filers use broad language like “any lawful purpose.”
- The name and Illinois street address of the registered agent.
- The management structure: member-managed or manager-managed.
- Names and business addresses of managers or managing members.
- The organizer’s name and address.
- Duration, which is perpetual unless you set an end date.
Pay attention to the management structure box. In a member-managed LLC, every owner can bind the company in deals. In a manager-managed LLC, only designated managers have that authority. If you have passive investors who shouldn’t be signing contracts, choose manager-managed. The LLC comes into existence on the filing date, or you can pick a later effective date up to 60 days out.5Illinois General Assembly. Illinois Code 805 ILCS 180/5-5 – Articles of Organization
Online filing through the Secretary of State’s portal is fastest.6Illinois Secretary of State. LLC Articles of Organization Online Filing Paper filings go to the Springfield office and take longer. The standard filing fee is $150, expedited processing adds $100, and a series LLC under Section 37-40 of the Act runs $400.3Justia. Illinois Code 805 ILCS 180 Article 50 – Fees and Other Matters Mail-in checks are payable to the Illinois Secretary of State. Once approved, you’ll get a file-stamped copy of the Articles. Keep it; that’s your proof of existence.
Write an Operating Agreement
Illinois law doesn’t require an operating agreement. The statute says members “may enter into” one.7Illinois General Assembly. Illinois Code 805 ILCS 180/15-5 – Operating Agreement Skip it anyway and the default rules in the Illinois LLC Act decide how profits are split, how decisions get made, and what happens when a member leaves. Those defaults rarely match what the owners actually wanted.
A workable agreement spells out capital contributions, how profits and losses are divided, voting and decision-making procedures, how members are added or removed, and what triggers a dissolution. It also strengthens your limited liability. Courts give more weight to the separation between you and your LLC when a written agreement shows you treated the company as a real entity. The agreement stays internal and never gets filed with the state.
Get an EIN and Choose How You’ll Be Taxed
Most LLCs need an Employer Identification Number from the IRS to open a bank account, file taxes, and hire employees. The IRS online application at IRS.gov/EIN issues the number immediately, and the applicant needs a valid Social Security Number or ITIN to use it.8Internal Revenue Service. Employer Identification Number Form SS-4 is also available by fax (about four business days) or mail (four to five weeks).9Internal Revenue Service. Instructions for Form SS-4
By default, the IRS treats a single-member LLC as a disregarded entity and a multi-member LLC as a partnership. Income flows through to the owners’ personal returns either way.10Internal Revenue Service. Limited Liability Company (LLC) You can elect C corporation treatment by filing Form 8832, or S corporation treatment by filing Form 2553. S-corp status can lower self-employment taxes for owners paying themselves a reasonable salary, but it adds payroll complexity. Talk to an accountant before electing; switching back is restricted.
Register for Illinois Taxes and Local Licenses
Illinois has its own tax layer on top of the federal rules. LLCs taxed as partnerships or S corporations owe a 1.5% personal property replacement tax on net Illinois income. LLCs taxed as C corporations pay 2.5%.11Illinois.gov. Personal Property Replacement Tax – Local Governments This is separate from state income tax and surprises many new owners.
If your LLC will collect sales tax, withhold employee income taxes, or do anything else taxable, register with the Illinois Department of Revenue on Form REG-1. The form asks for your federal tax classification and the tax types that apply to your business, and you’ll need the Secretary of State identification number from your filed Articles. Many Illinois cities also require a local business license or permit; fees and rules vary, so check with your local clerk’s office before you open.
File an Annual Report Every Year
Every Illinois LLC has to file an annual report with the Secretary of State. The fee is $75, and it’s due before the first day of your LLC’s anniversary month, meaning the month your Articles of Organization were filed.3Justia. Illinois Code 805 ILCS 180 Article 50 – Fees and Other Matters The report mostly confirms your current address, registered agent, and management information.
Miss it and the Secretary of State sends a delinquency notice. Ignore the notice and your LLC can be administratively dissolved, which ends its legal existence; a dissolved LLC can only wind down, not operate. Reinstatement is possible, but it costs $200 plus every unpaid annual report fee, up to six years’ worth.12Illinois Secretary of State. LLC Reinstatement A calendar reminder for your anniversary month solves the whole problem.
What About Beneficial Ownership Reporting?
The federal Corporate Transparency Act originally required most new LLCs to file a Beneficial Ownership Information report with FinCEN. Under an interim final rule published on March 26, 2025, all U.S.-formed entities are exempt from that requirement.13FinCEN.gov. Beneficial Ownership Information Reporting If you’re forming a standard domestic LLC in Illinois, you don’t need to file a BOI report right now. The rule could change if FinCEN issues new guidance, so it’s worth checking back before you assume the exemption still applies.