5 Easy Steps to Start an LLC in Illinois

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There are a number of ways to structure a business. But forming an LLC is the right choice for many. When you’ve formed your LLC, you’ll benefit greatly from its financial protection and flexibility.

The only trouble is, different states have different processes for starting an LLC, and some are definitely easier than others. Starting an LLC in Illinois, unfortunately, requires several somewhat complex steps. So in this post, we’ll guide you through those steps to ensure you complete the process successfully.

Why Starting an LLC in Illinois Is Worth It

Perhaps the most important reason to start an LLC is to limit the personal liability of the business owners. This is because creditors can only claim assets that belong to the LLC if the company incurs debts or a lawsuit is brought against the company.

In other words, forming an LLC protects members’ personal finances and assets. Sole proprietorships and traditional partnerships don’t offer this kind of protection.

Another reason to start an LLC is the tax benefits. With corporations, for example, the IRS taxes both the company’s profits and the shareholders’ dividends. 

LLCs, however, can choose to be taxed in a similar way to a partnership. This means that there’s a so-called pass-through. The IRS requires tax payments from just the members; not the members and the company.

Furthermore, there’s greater flexibility when you set up an LLC. As you will see, you’ll create an Operating Agreement that outlines the rules that govern the business. Corporations, on the other hand, have a more rigid structure and must follow strict rules for compliance.

The Investment Needed to Start an LLC in Illinois

The cost of starting a business varies tremendously. So, here, we’re talking about the costs associated with legally forming an LLC.

In the state of Illinois, you must submit Articles of Organization to create your LLC. This carries a fee of $150. You must also file an Annual Report with the Illinois Secretary of State and pay a fee of $75. 

There are also some optional documents you may wish to acquire from the state. First, you can reserve your LLC name up to 90 days before you file Articles of Organization which comes with a fee of $25.

After you file Articles of Organization, you can receive certified copies of your legal documents for $25. You can also cancel, change, renew or adopt a “Doing Business As” (DBA) name at a charge of $25.

Down the road, you may also need a Certificate of Good Standing to prove your LLC’s compliance with the state. Banks, suppliers, and government agencies sometimes require this document. In Illinois, this also costs $25.

Depending on the type of business you operate, you may also need to acquire certain business permits and licenses from the state, for which you’ll be charged a fee. 

You or a member of the LLC can file all of the above documents with the Illinois Secretary of State yourself. However, you may wish to seek help from a legal, business formation, or registered agent service.

Such services assist with documentation, help you stay compliant, and expedite filings. When it comes to online legal services, we highly recommend Bizee (formerly Incfile).

The company offers a free Articles of Organization filing service, plus a free registered agent service for one year. This is available in all states including Illinois.

Bizee's home page

Bizee also offers further affordable LLC formation services. These include Annual Report filings, EIN applications, business license research, trademarking, and Certificates of Good Standing.

5 Steps to Start an LLC in Illinois

You must complete just five steps to legally form an LLC in Illinois. These steps involve filing paperwork with the state, as well as creating key internal documents. Here you’ll find all of the information you need to ensure you complete the process correctly:

#1 – Give Your LLC an Appropriate Name

You must consider the name of your LLC carefully. This is because there are certain naming regulations you must adhere to in Illinois.

First, the name must include the term “Limited Liability Company”, “LLC”, or “L.L.C”. Some LLCs require professional certification, for instance, a doctor’s or attorney’s practice. In these cases, you need the term “Professional Limited Liability Company”, “PLLC”, or “P.L.L.C” in the name.

You mustn’t include words that indicate the company is part of a government agency, for example, “Treasury” or “State Department”. Furthermore, Illinois doesn’t allow LLCs to use the abbreviations “Ltd.” or “Co.”

There are also certain restricted words, for which you’ll need to gain permission from relevant authorities. These are words such as “University” or “Bank”.

Naturally, you may not use the words “Corporation”, “Incorporated”, “Corp.”, “Limited Partnership”, or “LP”.

It’s also rather important that your LLC name is distinguishable from others already registered in the state of Illinois. You can use the Illinois LLC Search page to search for existing business names that may be similar to yours. 

The term distinguishable here means that if a name looks or sounds similar, you won’t be able to register it. For example, you couldn’t have “The Hair Company” if “The Hare Company” already exists.

At this point, you may wish to reserve the name of your LLC.

#2 – Select a Registered Agent

The state of Illinois requires all LLCs to appoint a registered agent. This individual or business entity receives any formal or legal documents on behalf of the LLC. The registered agent must forward the documents to the appropriate person if they aren’t in charge of legal matters themselves.

The rules surrounding registered agents in Illinois are simple. The registered agent can be any member or employee of the LLC. They just need to be an Illinois resident and at least 18 years old.

If the registered agent is a company, for example a registered agent service, then it must have an office address in Illinois and be authorized to do business in the state. P.O. boxes are not allowed.

Why might you choose a registered agent service over an LLC member? 

Bizee, for example, handles important documents for you plus much more.

Bizee's registered agent services

First, they’ll make a copy of any documents they receive which you can access at any time via your own business dashboard.

You’ll receive notifications when new documents come through. Plus, they’ll remind you about key deadlines, such as annual reports, to help you stay compliant and in good standing.

Remember, you can sign up for the registered agent service and get the first year for free.

#3 – File Articles of Organization

In Illinois, you can file Articles of Organization and pay the $150 fee with the Secretary of State Department of Business Services either online or by mail. This is the legal document that establishes your LLC.

Here’s what the Articles must include:

  • LLC’s legal name
  • Address of the principal place of business
  • Effective start date of the LLC
  • Registered agent’s name and address
  • Purpose of the LLC – State “for all lawful purposes” or enter details about your product or service.
  • Duration of the LLC – Enter a date of dissolution if appropriate or note that the LLC is perpetual.
  • Other provisions for the LLC’s regulations (optional) – Enter the regulations laid out in the Operating Agreement.
  • Names and addresses of the initial members or the names addresses of the initial managers – This of course depends on whether the LLC is member-managed or manager-managed.
  • Name, address, and signature of the organizer(s) – This refers to the person or people who are forming the LLC.

Whether you submit your Articles online or by post, the Illinois Secretary of State processes the filing within ten days. You may pay an extra fee to expedite the filing.

If approved, you’ll receive a copy of the Articles of Organization for your records.

It’s also worth noting that you may form a Series LLC in Illinois. This is the parent or umbrella company under which different divisions may operate as separate business entities. As such, each business entity has separate member interests, assets, and operations. The fee in this case is $400.

Furthermore, if your business was formed in another state but you wish to do business in Illinois then you must file an Application for Admission to Transact with the Illinois Secretary of State. You must send this along with a Certificate of Good Standing from the state in which the LLC was formed.

#4 – Draw Up an Operating Agreement

An Operating Agreement isn’t a legal requirement in Illinois. However, it’s a good idea to have one to reduce the risk of conflict among members in the future. It also allows you to set the rules that govern your LLC. Otherwise, the LLC is subject to the rules and regulations of the state.

An operating agreement outlines details about the ownership, structure, and operations of your LLC. It’s an internal document that you don’t need to file with the state.

Here’s what you may wish to include in your operating agreement:

Basic Information

  • Date the LLC was formed
  • Names and addresses of members
  • Names and addresses of managers if applicable
  • Purpose of the LLC, i.e. information about the products and/or services


  • Members’ financial contributions
  • Members’ stake in the company
  • Voting rights
  • Distribution of profits and losses


  • Voting procedures
  • How you’ll admit new members
  • How you’ll appoint managers if applicable
  • How you’ll transfer roles and ownership if necessary
  • Exit strategy and dissolution procedures

Remember that, given the flexibility of the LLC’s organizational structure, you get to assign voting rights, units of ownership, and the distribution of profits and losses how you please.

For example, ownership usually corresponds to the amount of capital contributed. But you may wish to assign a greater stake into the company to members who are involved in the day-to-day running of the business.

When you’ve drafted the Operating Agreement, each member should review and sign the document. You should also provide each member with a copy of the Operating Agreement.

#5 – Apply for an EIN

The final step in forming an LLC is to get an Employer Identification Number (EIN). The IRS uses this number to identify your business for tax purposes.

An EIN is necessary if you hope to hire employees or open a business bank account. Obtaining an EIN also has a further advantage in that it provides a corporate veil for the LLC. In other words, it provides further protection to members by separating personal and business affairs.

To apply for an EIN, any member of the LLC or a responsible party must fill in Form SS-4. You can do this online using the IRS’s EIN Assistant or by fax or mail.

The applicant must be located in the US or US territories and have a valid taxpayer ID such as a Social Security Number.

Here’s what you must include in the application form:

  • Legal name of the business entity
  • Trading name if applicable
  • Principal office address plus mailing address if different
  • Name and taxpayer ID of the applicant
  • Type of business entity, i.e. LLC
  • Primary reason for applying for an EIN, e.g. “Starting a new business”.
  • Principal industry and activity
  • Details surrounding any previous application
  • Mailing address, phone number, and fax number of the applicant
  • Applicant’s signature

When you complete a successful online application, you’ll receive an EIN immediately. If you apply by mail or fax, it may take up to four weeks to process the application.

Next Steps

Now that you have all of the pertinent information, your next step is to get all of your ducks in a row. In other words, appoint your registered agent, start gathering the information you need to file Articles of Organization, and so on.

If you want to do some further research before you jump in, you may also wish to take a look at our in-depth guide to creating an operating agreement. Similarly, you may find our guide to LLC taxes useful.

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