Illinois is home to a huge business community centered on Chicago. This guide to LLC formation in Illinois explains the filing, the annual report and the Illinois tax rules that affect LLCs.
Forming an Illinois LLC is straightforward. However, Illinois has a replacement tax that applies to many LLCs and a series LLC option for investors. Therefore, understanding these helps you plan.
Our attorneys form Illinois LLCs and draft operating agreements at fixed prices.
Filing your Illinois LLC
Illinois LLCs are formed by filing Articles of Organization with the Illinois Secretary of State, usually online. State fees change from time to time, so confirm the current amount when you file.
The articles list the LLC's name, registered agent, principal office and management structure. In addition, you may state a duration and purpose. Our LLC Formation service, from $99, handles the filing.
Name and agent
The name must be distinguishable from existing names and include "LLC" or similar. Furthermore, you need a registered agent with an Illinois address. Consequently, many owners use a professional agent service.
Annual reports in Illinois
Illinois LLCs must file an annual report each year before the first day of the anniversary month of formation. The report confirms the LLC's information.
Missing it leads to penalties and, eventually, administrative dissolution. Therefore, track the anniversary date carefully. Our annual report filing service handles it for you.
The Illinois replacement tax
Illinois imposes a personal property replacement income tax on partnerships and S corporations. For LLCs taxed as partnerships, the rate is 1.5% of Illinois net income. As a result, many LLCs pay tax at the entity level even though they are pass-through entities.
In addition, Illinois has an elective pass-through entity tax that can help owners with federal deductions. Consequently, talk to an accountant about the best tax structure for your LLC.
Series LLCs in Illinois
Illinois allows series LLCs. A series LLC can create separate series inside one company, each with its own assets and liabilities. For example, a real estate investor might hold each property in a different series.
However, each series must keep separate records and accounts. Moreover, Illinois requires filings for each series. Therefore, a series LLC needs careful administration. A business formation consultation explains whether it fits your plans.
Your Illinois operating agreement
Filing with the state creates the LLC. However, the operating agreement decides how it actually works. Without one, Illinois's default LLC rules apply, and they may not match your deal.
What it should cover
A strong agreement sets ownership percentages and capital contributions. Moreover, it explains how profits and losses are allocated and when distributions are paid. In addition, it sets voting rules and decides whether the LLC is managed by its members or by managers.
Exits and disputes
Next, the agreement should plan for exits. For example, what happens if a member dies, divorces, becomes disabled or simply wants out? Similarly, how is a departing member's interest valued and paid? A buy-sell agreement can add detail here.
Illinois notes
Illinois does not require you to file the operating agreement with the state. However, Illinois law gives members broad freedom to set their own rules. Therefore, a written agreement is the best protection.
Our LLC Operating Agreement service drafts a Illinois-ready agreement, starting at $79.
Flat fee LLC formation pricing in Illinois
Our LLC Formation service starts at $99, plus state fees. Our operating agreement starts at $79. In addition, our annual report filing service keeps you in good standing.
If you need a corporation instead, our corporation formation service sets it up. For more, read our national guide to LLC formation and corporate structuring.
Common Illinois LLC mistakes
The most common Illinois mistake is missing the annual report deadline. Consequently, the LLC can lose good standing. Another is overlooking the replacement tax when budgeting.
Similarly, some owners skip the operating agreement or mix personal and business funds. As a result, liability protection can weaken. Therefore, keep separate accounts and a signed agreement from the start.
Chicago licenses
Finally, Chicago businesses often need a city business license in addition to state registration. Similarly, suburban municipalities may have their own licensing rules. Therefore, check local requirements before opening.
LLC or corporation in Illinois?
Most small businesses in Illinois choose an LLC for its flexibility and simple taxes. However, a corporation is sometimes the better fit. For example, startups seeking venture capital usually need a C corporation, often formed in Delaware and registered in Illinois. In addition, Illinois corporations pay an annual franchise tax based on paid-in capital, while LLCs do not. Consequently, compare both before you file. Our business formation consultation walks through the trade-offs for your plans.
Your first month after forming a Illinois LLC
Forming the LLC is only the first step. Next, obtain an Employer Identification Number from the IRS. It is free and usually issued online the same day. Then open a business bank account in the LLC's name. As a result, business and personal money stay separate, which protects your liability shield.
After that, register with the Illinois Department of Revenue for sales and withholding tax where needed, and check Chicago or local licensing. Moreover, if you will hire employees, register for unemployment insurance and set up payroll withholding.
Finally, put your operating agreement in place and store it with your formation documents. In addition, calendar your recurring deadlines, such as annual reports and tax filings. Consequently, your LLC starts life organized and compliant.
Protecting your liability shield in Illinois
An LLC protects your personal assets only if you treat it as a separate business. Courts in Illinois, like courts elsewhere, can disregard the LLC in serious cases of abuse. This is often called piercing the veil.
Therefore, sign contracts in the LLC's name, keep business money in a business account and keep the LLC adequately funded. In addition, carry appropriate insurance, because an LLC does not protect you from your own personal negligence. Consequently, good habits from day one keep your protection strong.
Our LLC Formation services in Illinois
Every service below has a fixed price, is prepared by a qualified attorney and is delivered online — wherever you are in Illinois. Additionally, you can upload evidence, message your attorney and track progress from your secure client dashboard.
LLC Formation Documents in Illinois
Articles of organization, EIN guidance and initial resolutions (state fees extra).
Moreover, it is usually ready in 3 working days. Express delivery is also available. As a result, you can act before deadlines pass.
Order LLC Formation Documents — from $99 See what's included →
LLC Operating Agreement in Illinois
Single- or multi-member operating agreement.
Moreover, it is usually ready in 3 working days. Express delivery is also available. As a result, you can act before deadlines pass.
Order LLC Operating Agreement — from $79 See what's included →
Corporation Formation (C-Corp / S-Corp) in Illinois
Formation of your corporation: articles of incorporation, bylaws, initial resolutions, share issuance and S-election guidance.
It includes prepared by our US legal team for your state, based on your questionnaire answers and documents, word and PDF, ready to sign, send or file. Moreover, it is usually ready in 5 working days. Express delivery is also available. As a result, you can act before deadlines pass.
Order Corporation Formation (C-Corp / S-Corp) — $999 See what's included →
Business formation consultation in Illinois
A confidential 45–60 minute phone or video consultation with a licensed US attorney about choosing and forming the right business entity. Get straight answers on your rights, options, risks and likely costs, and a clear plan for your next steps.
It includes 45–60 minute call with a licensed US attorney — phone, video or WhatsApp, upload documents beforehand so your attorney is prepared, your rights, options, risks and likely costs in plain English. Moreover, it is usually ready in 1 working day. Express delivery is also available. As a result, you can act before deadlines pass.
Order Business formation consultation — $299 See what's included →
Annual Report Filing in Illinois
Preparation and filing of your company's annual report with the Secretary of State.
It includes prepared by our US legal team for your state, based on your questionnaire answers and documents, word and PDF, ready to sign, send or file. Moreover, it is usually ready in 2 working days. Express delivery is also available. As a result, you can act before deadlines pass.
Foreign Qualification Filing (per state) in Illinois
Registering your company to do business in another state, including the certificate of good standing and registered agent.
It includes prepared by our US legal team for your state, based on your questionnaire answers and documents, word and PDF, ready to sign, send or file. Moreover, it is usually ready in 3 working days. Express delivery is also available. As a result, you can act before deadlines pass.
Order Foreign Qualification Filing (per state) — $250 See what's included →
Buy-Sell Agreement in Illinois
A buy-sell agreement setting what happens to an owner's share on death, disability, divorce or exit — and how it is valued.
It includes prepared by our US legal team for your state, based on your questionnaire answers and documents, word and PDF, ready to sign, send or file. Moreover, it is usually ready in 7 working days. Express delivery is also available. As a result, you can act before deadlines pass.
LLC Formation across Illinois — cities we serve
We work with clients in every part of Illinois, entirely online. Therefore, it does not matter whether you live downtown or hours from the nearest courthouse. Your documents follow Illinois law and your county's local practice. Choose your city below to see local details and prices.
- Chicago: LLC Formation Documents in Chicago · LLC Operating Agreement in Chicago · Corporation Formation (C-Corp / S-Corp) in Chicago
- Aurora: LLC Formation Documents in Aurora · LLC Operating Agreement in Aurora · Corporation Formation (C-Corp / S-Corp) in Aurora
- Naperville: LLC Formation Documents in Naperville · LLC Operating Agreement in Naperville · Corporation Formation (C-Corp / S-Corp) in Naperville
- Joliet: LLC Formation Documents in Joliet · LLC Operating Agreement in Joliet · Corporation Formation (C-Corp / S-Corp) in Joliet
- Rockford: LLC Formation Documents in Rockford · LLC Operating Agreement in Rockford · Corporation Formation (C-Corp / S-Corp) in Rockford
- Springfield: LLC Formation Documents in Springfield · LLC Operating Agreement in Springfield · Corporation Formation (C-Corp / S-Corp) in Springfield
- Elgin: LLC Formation Documents in Elgin · LLC Operating Agreement in Elgin · Corporation Formation (C-Corp / S-Corp) in Elgin
- Peoria: LLC Formation Documents in Peoria · LLC Operating Agreement in Peoria · Corporation Formation (C-Corp / S-Corp) in Peoria
- Evanston: LLC Formation Documents in Evanston · LLC Operating Agreement in Evanston · Corporation Formation (C-Corp / S-Corp) in Evanston
- Schaumburg: LLC Formation Documents in Schaumburg · LLC Operating Agreement in Schaumburg · Corporation Formation (C-Corp / S-Corp) in Schaumburg
More Illinois services
LLC Operating Agreement in Illinois · Corporation Formation (C-Corp / S-Corp) in Illinois · Business formation consultation in Illinois · Annual Report Filing in Illinois · Foreign Qualification Filing (per state) in Illinois · Buy-Sell Agreement in Illinois. See all legal services in Illinois.
Nearby states
Moving between states, or is the other party elsewhere? We also cover LLC Formation Documents in Indiana, LLC Formation Documents in Wisconsin, LLC Formation Documents in Missouri, LLC Formation Documents in Iowa, LLC Formation Documents in Kentucky. See every location we cover.
Frequently asked questions
How much does it cost to form an LLC in Illinois?
Our attorney-prepared formation starts at $99 plus the Illinois Secretary of State filing fee.
When is the Illinois LLC annual report due?
Before the first day of the anniversary month of the LLC's formation each year.
What is the Illinois replacement tax?
A 1.5% tax on the Illinois net income of LLCs taxed as partnerships, paid at the entity level.
Does Illinois allow series LLCs?
Yes. Illinois allows series LLCs, but each series needs separate records and filings.
Do you form LLCs anywhere in Illinois?
Yes. We form Illinois LLCs and draft operating agreements for businesses statewide.
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This guide is general information, not legal advice for your situation. Every case is different — speak to a qualified attorney before you act.