Illinois LLC Formation Guide

This guide will help you set up an LLC in Illinois. It includes step-by-step instructions for obtaining tax IDs and filing documents.

Overview

Because they are affordable to set up, offer flexibility for the owners and are simple to manage, LLCs are the most preferred business structure. Your LLC legalizes your business and limits your personal liability. It also allows you to have tax flexibility. As you go through this process, the following steps will guide you.

Step-by-Step Illinois LLC Instructions

An annual $250 fee must be paid by Illinois LLCs to the Secretary of State every year on the anniversary of their incorporation.

  1. Check Name Availability

    Your LLC’s legal name may not be in conflict with any registered name. You can search for the name you want to check availability.

    Name Search: Illinois Secretary of State – Business Services Department

    Name Search

    Name Reservation: Optional
    Suffix: Shall include the terms “limited liability corporation”, “L.L.C.” “, “LLC” or “limited liability company”, and, if the limited liability company is low-profit, “L.L.C.” The name of the limited liability company that transacts business in this State under the assumed name, Arabic numerals or Roman numerals; shall include the word “trust” if it is limited liability company formed for the purpose of accepting trusts and executing them.

    805 ILCS SS180/1-10

  2. Name a registered agent

    Before you can file to officially create an Illinois LLC, you must decide who your Illinois registered agents will be. Register agent is the legal representative of a business that receives notices about lawsuits and other legal notices.

    Every LLC must have a registered agent as required by state law. When you file Illinois articles or organization with the Illinois Secretary Of State – Business Services Department, the registered agent will be designated.

  3. Filled Illinois Certificate of Formation

    To create a limited liability company, file the articles of organization

    Agency: Illinois Secretary of State – Business Services Department
    Form:
    Form LLC 5.: Articles of Organization
    Instructions:
    Pub C334: A Guide to Organizing Domestic Limited Liability Companies
    Filing Method Mail, fax (only for prepaid accounts), or online
    Agency Fee: $150 + $100 optional expedite fee. If you file online, the expedite fee will be charged.
    Turnaround: Approximately 2 weeks via fax or mail. 1 business day with $100 expedite charge
    Law:
    805 ILCS180
    Notes:
    • You must send the original items by mail with your signature in black ink. Also, one copy.
    • Illinois offers a Series LLC as well as a L3C. Each one has its own requirements for formation.
    • Online filing is free. You can return to the Secretary-of-State’s Web site within 24 hours to retrieve a copy of your document for a period up 30 days.
  4. Establish Company Records

    Your LLC must maintain accurate and complete records. Your LLC’s first records will be your filed articles of organization. Other official records that your LLC may produce include:

    • Minutes of meetings
    • Operating agreement
    • EIN verification letter
    • The LLC may be amended or filed with other entities throughout its life.

     

  5. Make the Operating Agreement

    An Operating Agreement is the governing document of the LLC. This document outlines the rules and procedures for how the LLC will operate, such as holding an annual meeting. The agreement will be reviewed and approved at your organization meeting.

  6. Organise the Organizational Meeting

    The organizational meeting is the first meeting of members of an LLC. To conduct this meeting, you will need to have your operating agreement and the filed articles of organization. Keep a record of the meeting and keep it in your company records book.

  7. Register for a Federal Employer Identification Number.

    An EIN is required for any LLC that has more than one member, or hires employees. A bank account opening requires an EIN.

    Agency: Internal Revenue Service (IRS).
    Form:
    IRS Form S-4
    Filing Method You can send mail, fax or online by phone.
    IRS fee $0
    Turnaround: Online or over the phone, immediately. 4 business days via fax. 4-6 weeks via mail
    Notes: Only certain hours are available for the IRS website. Before closing your session, print your EIN. For more information, please refer to IRS Pub 1635 Understanding Your EIN.
  8. Get Illinois State Tax Identification Numbers/Accounts

    Illinois offers a single application for tax registration.

    Send your submission to:
    Illinois Department of Revenue

    http://www.revenue.state.il.us/

    Form:

    Form REG-1: Illinois Business Registration Application
    Filing Method
    Mail or online
    Fee:
    The tax accounts required to pay the state fee will determine how much they charge.
  9. Consider Electing C-Corp Taxation or S-Corp Fiscal

    Your LLC will automatically be subject to pass-through taxation. However, the majority of LLCs maintain this tax classification. Some LLCs can choose to elect S-Corp and C-Corp tax treatment.

    • S-Corp is a tax-saving tool that can be used by owner-employees earning more than 75,000 annually.
    • Double taxation is a problem for C-Corps: members pay taxes on distributions and the corporation pays taxes. You may be eligible for C-Corp tax treatment if your profits exceed $250,000 or you offer employee benefits.
  10. Get Business Licenses and Permits

    You must have the appropriate licenses and permits to run your business legally. It is easy to find the right licenses and permits for your state and federal business.

    Illinois Business License

    NOT REQUIRED

     

    Illinois does not require licensure for general business licenses.

    Illinois does not have an Illinois general business license. However, local licenses are required.

  11. You must continue to file for your LLC

    You are required to file both federal and state tax returns.

    To maintain good standing with the secretary-of-state, many states require that business entities file an annual report. The table below shows the requirements for Illinois LLCs to file an annual report.

    Domestic Illinois Corporation Annual Report Requirements:

    Agency: Illinois Secretary of State – Business Services Department
    Form:
    BCA 14.05 D: Domestic Corporation Annual Report
    Filing Method Mail or online.
    Agency Fee: $75 annual report fee + franchise taxes (varies) +$1.69 transaction fees
    Due: Each year, by the end the month preceding the anniversary month. If you were incorporated on February 14, your annual report must be submitted by January 31.
    Law:
    805 ILCS 5./14.05
    Penalties: Based on the amount of franchise tax due, late fee is calculated.
    Notes:
    • A named officer must sign the report.
    • Original signatures are required
    • You will need to submit a separate form to change your registered agent.

    You will need to prove your LLC’s good standing to customers, banks, and other state agencies as your LLC grows. After all the hard work that went into forming an Illinois LLC, you should not let a missed annual reporting filing cause your business to be out of compliance.

     

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