How to Create an LLC in Illinois

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How to Form an LLC in Illinois:
5 Simple Steps to Get Started
According to the IRS, each state may use different regulations around forming an LLC, and you should check with your state if you’re interested in starting a Limited Liability Company. To simplify the process of forming an LLC in the state of Illinois, we’ve put together a step-by-step guide to detail each step of the process and answer any questions you may have.

Step 1
Name Your Illinois LLC

Your first consideration when choosing a name for your LLC is that it be unique from any other business in the state of Illinois. You can quickly and easily do a name check on the Illinois Secretary of State business name database webpage to verify the business name you want is available. For a $25 fee, you can reserve a name for 90 days by filing Form LLC-1.15.

In order to comply with Illinois state law, your company’s name must contain some form of the term “Limited Liability Company.” This can appear as the whole phrase written out or the abbreviations “LLC” or “L.L.C.” You can also choose to use abbreviations for the words “Limited” and “Company” as “Ltd.” or “Co.” respectively. The words “bank,” “trust,” “trustee,” “incorporated,” “inc.,” “corporation,” “corp.,” “insurer,” “insurance company,” or any wording that suggests the company is an insurance business are not allowed in Illinois without providing a lengthy list of supporting documents.

Step 2
Appoint a Registered Agent in Illinois

The state of Illinois requires that any LLC have a registered agent for service of process. This means your LLC must have an entity that agrees to physically accept any legal papers on the company’s behalf should it be sued. This entity does not have to be an individual person. The registered agent can be any resident of the state of Illinois or a business entity authorized to do business in Illinois so long as the agent has a physical street address within the state.

Step 3
File the Illinois Articles of Organization
To officially create your LLC in the state of Illinois, you’ll need to complete the Articles of Organization, Form LLC-5.5 and file them with the Illinois Secretary of State Department of Business Services. You’ll need to submit both the original and an exact copy of the original. For a $150 fee, this can be done either online or by mail; for an additional $100, either filing method can be expedited. To complete this form you will need to know the following:
  1. The name, address, and purpose of your LLC
  2. The name and address of the company’s registered agent
  3. Name(s) and address(es) of organizers
  4. The name(s) and address(es) of any managers or members with managing authority associated with your LLC
  5. The duration of the LLC

Step 4
Create an Operating Agreement

You may want to consider preparing an operating agreement to outline the ownership and operating procedures for your LLC.

Though not required by the state, an operating agreement will set the guidelines for running your company. This does not need to be filed with the state, but it can go a long way toward ensuring your company’s success.

Step 5
Apply for an EIN and Review Tax Requirements

An IRS Employer Identification Number (EIN) is required for your LLC unless it is a single-member LLC with no employees. Obtaining an EIN is as easy as completing the application on the IRS website.

Since Illinois is heavily invested in making sure businesses meet their tax obligations, we recommend that you register with the Illinois Department of Revenue (IDOR). You will need to determine the exact types of taxes your business will be collecting and/or has been collecting from the state and whether you will have employees. You can file online at MyTaxIllinois or by filing Form REG-1 by mail.

If your LLC will be selling a physical product, you’ll need to register for a sellers permit through the MyTax Illinois website. This will allow you to collect sales tax on taxable sales. Additionally, if you have employees, you’ll need to register for Unemployment Insurance Tax and Employee Withholding Tax. Both these taxes can be paid through the MyTax Illinois portal.

Other Considerations
Foreign LLCs and Business Licenses
Foreign LLCs

If yours is a foreign LLC, also referred to as an out-of-state LLC, wanting to do business in the state of Illinois, you’ll need to follow all the steps above with a few differences.

You will need to file an Application for Admission to Transact Business (Form LLC-45.5) with the Illinois Secretary of State as well as a Certificate of Good Standing or Certificate of Existence from your LLC’s domestic or home state. The Certificate of Existence must date back no more than 60 days prior to filing. The filing fee is the same as a domestic LLC in Illinois at $150.

Business Licenses

Some industries will require you to secure federal, state, and/or local licenses to legally operate in the state of Illinois.

You can get federal licenses and perform an Illinois license and permit search on the appropriate licensing for your business.

Since business licenses and permits are issued at all levels of government—federal, state, and local—and for such a multitude of reasons (e.g., health, building, signage, etc.), you should still do careful research to find out what licenses and permits you need. You can also hire or use a professional service to do it for you.

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