Illinois LLC Formation Requirements

How to get an LLC in Illinois

Below are key steps to take when it comes to LLC registration in Illinois.

Step 1: Choose a name for your Illinois LLC

Each state has certain requirements that need to be met when it comes to naming an LLC. Here are the general rules for LLC names in Illinois:

• Unique. The name must be distinguishable from the name of any domestic or foreign LLC authorized to transact business or a name to which exclusive right is, at the time, reserved or registered.
• Required words. The LLC name must include one of the following: “Limited Liability Company," "LLC" or "L.L.C." The use of dashes in a name is often not approved by the state. (Also, the name cannot contain any of the following terms: "Corporation", "Corp.", "Incorporated", "Inc.", "Ltd.", "Co.", "Limited Partnership", or "LP".)
• Restricted words. Certain words may require prior approval. For example, "Bank" or "Trust" and variations thereof require approval from the Department of Banks and Trusts.

Step 2: Determine management structure (member vs. manager)

An LLC can either be “member-managed’' or “manager-managed”. (“Member” is the term used to describe the owner of an LLC.)

• Member-managed. All members (owners) are active in the decision-making processes of the LLC.
• Manager-managed. One or more managers are designated to make the decisions on behalf of the LLC. A manager can be a member (owner) or non-member.

In Illinois, the default management structure of an LLC is member-managed unless other provisions for the company's management are made in the operating agreement. Also, the names and business address(es) of the manager(s) and any member with the authority of the manager must be listed in the filing documents of the LLC. For more information on LLC management structures, see LLC members vs. LLC managers.

Step 3: Select your Illinois registered agent

Illinois requires each LLC to have a registered agent and an office with a physical street address (no PO Boxes) in Illinois in order to receive service of process and any official correspondence from the Illinois Secretary of State. Registered agent information must be included on the LLC filing documents and must be kept up to date with the Secretary of State's office.

Step 4: Prepare and file your LLC Articles of Organization with the State of Illinois

To officially establish an Illinois LLC, Articles of Organization must be filed with the Illinois Secretary of State's office.

You should also create an operating agreement for your LLC. While this document does not have to be filed with the state, an operating agreement helps establish the rules and structure for the LLC. It can also help to address issues that may come up in the course of business. Read our article on LLC operating agreements for more information.

Step 5: Obtain a federal employer identification number

A federal employer identification number (commonly referred to as an EIN, FEIN, or federal tax ID), is a unique business ID number issued by the IRS. An EIN is used for filing taxes with the IRS and often used when opening a bank account, obtaining a loan, paying invoices, and for other business activities. For more information, see Do I need an EIN for my LLC?

Step 6: Meet your license, permit, and registration requirements

After forming a limited liability company (LLC), you must take certain steps on an ongoing basis to keep your business in compliance. These steps are also important in preserving the limited liability an LLC provides its owner(s).

Your Illinois LLC may need to register with various federal, state, and local government agencies. Here are sample requirements:

• IDOR registration. Illinois LLCs must register with the Illinois Department of Revenue (IDOR) if they conduct business in Illinois or with Illinois customers.
• Sales tax. An LLC may need to obtain a Retailer’s Occupation Tax Number from the Illinois Department of Revenue (IDOR) Sales Tax Division.
• Employees. Before hiring any employees, LLCs must obtain an Unemployment Compensation Number from the Illinois Department of Labor. They will also need to look into Workers Compensation insurance with the Illinois Industrial Commission.
• Business licenses and permits. An LLC may need to obtain general and professional licenses and permits at the state and local levels.
• Assumed name registration. LLCs that wish to do business under an assumed name must submit a filing with the Secretary of State’s office.
• Annual report. Illinois LLCs must file an annual report with the Secretary of State’s office. Failure to comply with this requirement can result in the administrative dissolution of the LLC.

Illinois (IL) LLC basics and FAQs

What is the cost to form an Illinois LLC?

At BizFilings, we clearly outline our fees and the Illinois state fees. When you view our pricing to form an LLC you see:

• BizFilings’ package prices. BizFilings offers three incorporation service packages from which you can choose.
• Standard turn-around. Our pricing clearly shows the state fee to form an LLC in Illinois with standard turn-around.
• Expedited turn-around. You will see the BizFilings and state fee, if any, for expedited turn-around.
• Certified copy. Our pricing also displays the BizFilings and state fee, if any, for issuing a Certified Copy of the Articles of Organization.

What is an LLC member vs. an LLC manager?

An LLC can be managed by “members” or “managers”. A member is the term used to describe an owner of an LLC. Manager refers to an individual or entity appointed by the members/owners to run day-to-day operations for an LLC.

The following are Illinois’s requirements for the members/managers of LLCs:

• Minimum number. LLCs must have one or more members/managers.
• Residence requirements. Illinois does not have a provision specifying where directors must reside.
• Age requirements. Illinois does not have age requirements.
• Inclusion in the Articles of Organization. Member/Manager names and addresses are required to be listed in the Articles of Organization.

What are Articles of Organization for an Illinois LLC?

The document required to form an LLC in Illinois is called the Articles of Organization. The information required in the formation document varies by state. The requirements in Illinois include:

• Principal place of business. Address where the records of the company will be kept.
• Effective date. The effective date for the Articles of Organization can be the filing date or a later date not exceeding 60 days after the filing date.
• Registered agent. LLCs must list the name and address of a registered agent with a physical address (no post office boxes) in Illinois. The registered agent must be available during normal business hours to accept important legal and tax documents for the business.
• Purpose. In most cases, an LLC can list one or more specific purposes and/or a general statement of purpose regarding being formed for any lawful purpose. Professional limited liability companies, however, must state the specific professional service or related professional services to be rendered by the professional limited liability company.
• Duration. If the duration of the LLC is not perpetual, include the dissolution date in the operating agreement.
• Management. Include the name and business address of each manager and any member with the authority of manager.
• Organizer(s). An LLC may be formed in Illinois by one or more organizers. An organizer may either be a natural person age 18 or older or a business entity such as a partnership, LP, another LLC, or corporation.

The name and business address of each organizer must be included.

Does Illinois allow professional limited liability companies?

Illinois allows professionals, such as accountants, attorneys and physicians, to form a professional limited liability companies (PLLCs).

What are LLC taxes and fees in Illinois

The following are a few taxation requirements and ongoing fees for Illinois LLCs:

• Annual report. Illinois requires LLCs to file an annual report during the 60-day period before the first day of the anniversary month of the incorporation date.
• State taxes. How Illinois taxes an LLC depends on how it has elected to be treated by the IRS.
• Assumed name. LLCs must pay a fee each year for the right to use an assumed name.

Do I need a business license for my LLC in Illinois

Business licenses and/or permits are required for most businesses. The BizFilings Business License Application Package can help you stay on top of these requirements.

Additional Illinois information

View the following additional resources BizFilings has for forming and maintaining companies in Illinois:

• Illinois Corporation Formation
• What is an LLC annual report
• LLC guide