How To Set Up An LLC In Illinois – Forbes Advisor

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If you want to know how to get an LLC in Illinois, you are not alone; limited liability companies, or LLCs, are popular business entities. Their formations skyrocketed in the late 1990s after the IRS changed its rules, allowing LLC owners to choose to get taxed as partnerships or corporations.

Establishing an LLC can feel complicated if you are new to the process and do not know all the steps. LLCs in Illinois are governed by the Limited Liability Company Act. We’ve done the research and put together this simple guide to forming an LLC in Illinois.

Before You Create an LLC in Illinois

There are a few crucial details you want to have taken care of before you move forward with forming your LLC. These steps will help you avoid unnecessary delays or wasting money.

Check That Your Preferred Name Is Available

Just because you want a specific business name does not mean it will be available to register. Illinois requires that your LLC name be distinguishable from every other LLC or corporation name registered or reserved in the state. To avoid having your formation paperwork rejected, be sure to research business name availability using the Department of Business Services search engine. It is also possible to reach out by phone regarding LLC name availability by dialing 217-524-8008.

You should prepare alternative business names just in case your first choice is not available.

Buy the Website Domain

While checking for business name availability, it is also a good idea to check for domain name availability. After all, the next step for many businesses is to create an online presence. If you find no one using the domain name associated with your brand’s identity, it is an excellent idea to buy it as soon as possible.

Hire a Registered Agent

Illinois requires you to appoint a registered agent to receive legal documents on behalf of your business. An agent can be an Illinois resident or a company authorized to do business in Illinois. The agent must have a street address in the state, known as the registered office.

You or one of your employees can act as a registered agent as long as you meet the requirements. LLCs and corporations are not legally able to act as their own registered agents in Illinois. You can also appoint a business to act on your behalf. You could spend as much as $300 or as little as $49; it usually comes down to the quality of service, so be sure to ask questions and read reviews.

How To Set Up Your LLC in Illinois

Once you take a few preliminary steps, you are ready to form your Illinois LLC.

Reserve Your LLC Name

To hold a name for business use, you must file Form LLC-1.15, the Application to Reserve a Name. The form also lets you transfer or cancel a name reservation. The filing fee to apply for a business name is $25; If you wish to cancel your reservation, the price is just $5.

This form will hold your desired LLC name for up to 90 days; filing this form is not the same as forming an LLC. It is also not mandatory. However, if you aren’t ready to file your formation paperwork yet, this is an excellent first step in ensuring your preferred name will be available for use once you establish your Illinois business entity.

Name Exceptions

When naming your business entity, you must, by law, include “Limited Liability Company” or the abbreviations “LLC” or “LLC” however, in Illinois, any business entity providing professional services licensed by the Illinois Department of Financial and Professional Regulation must use “Professional Limited Liability Company” or abbreviate it to “PLLC” or “PLLC”

Likewise, a worker cooperative must use the term “Limited Worker Cooperative Association” or abbreviations “LWCA” or “LWCA”

File Your Articles of Organization

To form an LLC in Illinois, you must file Form LLC-5.5 or the Articles of Organization with the Secretary of State’s Department of Business Services. You could choose to have the formation be effective on the filing date or at a later time, as long as it does not exceed 60 days.

You can complete the entire process online. Otherwise, submit all documents to:

Secretary of State
Department of Business Services
Limited Liability Division
501 S. Second St., Rm. 351
Springfield, IL 62756

The filing fee is $150; Make your certified check, cashier’s check, certified public accountant’s check, Illinois attorney’s check or money order payable to Secretary of State.

Foreign Business Entities Operating in Illinois

If you own a foreign or out-of-state entity and wish to operate within Illinois, you must complete a Form LLC-45.5. The process costs $150.

After Forming Your Illinois LLC

Even after setting up your LLC, a few additional actions are necessary to keep your business going and in line with federal requirements.

Get a Certificate of Good Standing

Once you set up your LLC, you can then complete Form LLC-50.25 to receive a Certificate of Good Standing. This document verifies that your business is legitimate and that you have permission from the Secretary of State to do business within Illinois. The standard fee is $25, but you can expedite the process for an additional $20.

Create an LLC Operating Agreement

Although not mandatory, creating an operating agreement is strongly recommended. Not only does it provide legitimacy to your business, it ultimately provides a foundation for your LLC. This agreement dictates everything from how you intend to run the business to each member’s financial contributions. If there is a dispute about roles or finances, all parties can refer to this agreement for clarification.

Get an Employer Identification Number (EIN)

By law, most LLCs must have an Employer Identification Number, or EIN. It is also called a Federal Tax Identification Number (FTIN) or Federal Employer Identification Number (FEIN). You’re exempt from this requirement if you own a single-member LLC with no employees, but many solopreneurs choose to get an EIN anyway. To get one, simply log into the official IRS website.

File Your Annual Report

In Illinois, both domestic and foreign LLCs must file an annual report before the anniversary date of the business entity’s formation. You must file the document within 60 days of the anniversary date or you’ll incur a $100 penalty. If you don’t file a report within the next 120 days, the LLC will be administratively dissolved. The yearly fee is $75.

You may also be responsible for paying an annual personal property replacement tax.

In addition to following this series of steps, it is always a good idea to remain updated regarding requirements and any changes to forms or fees. Taking special care from the beginning of the process and beyond will put your Illinois LLC on the path to long-term success.

Frequently Asked Questions

How much do I pay for an LLC?

In the United States, LLC prices range according to the state. The cost can be as low as $40 or as high as $500. Additionally, there may be annual costs to consider, so you should budget accordingly.

What are some advantages of forming an LLC?

LLCs are popular business entities as they protect members from for debt attributed to the company or, in some instances, being directly liable in the event of liability a lawsuit. It is also possible to choose whether to be taxed as a partnership or corporation.

How much does it cost to get an LLC in Illinois?

Forming an LLC in Illinois costs $150. Submit the filing fee and your Articles of Organization to the Secretary of State.

Can I act as my own registered agent?

You can act as your own agent in Illinois provided you’re an Illinois resident with a physical address in the state. You can also hire an individual or company to act as your registered agent.

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