How to start an LLC in Illinois?
Starting an LLC in Illinois is a process that can seem daunting at first, but with the right information and guidance, it can be a smooth process. In this article, we will walk you through the entire process, from choosing your business structure to filing your LLC paperwork. So whether you’re just starting or are ready to take the plunge, keep reading for everything you need to know about starting an LLC in Illinois.
Before we dive in, here’s a really good explanation video on starting a Illinois LLC for those of you who prefer video over text.
Benefits of starting an LLC in Illinois
There are many benefits to starting your LLC in Illinois. As expert start-up guides will advise you, it has the advantage of limited liability protection for its members. It’s more compact than a Corporation or S Corporation.
Limited Liability Protection
One of the most significant benefits of starting your Illinois business as an LLC is that it offers limited liability protection, which means that if a lawsuit arises from a customer or client for something you did while operating your business – it won’t follow you home. Rather than the people who own it, the business itself is liable for paying out any damages.
Your personal assets, such as your car or house, are separated from your Illinois business assets and aren’t at risk of being taken away if someone sues your business for something you did wrong. Many entrepreneurs start their businesses as LLCs because of this benefit.
An LLC in Illinois has the choice of being taxed as a Sole Proprietorship, Partnership, or Corporation. It’s a good deal for start-ups since they don’t have to worry about finding an accountant or anything like that just yet.
Note: Single-Member LLCs are treated as Sole Proprietorships by default.
Minutes of meetings not required
Lastly, one of the benefits of starting your LLC in Illinois is that no minutes are required for meetings. People don’t have to travel for monthly meetings or anything like that. They need to follow the operating agreement, which doesn’t take too many hours out of the day.
Illinois LLC Rules & Requirements
This is a quick summary of the most important rules and requirements that this article will go through in-depth.
To apply for permission to form an LLC in Illinois, the company must have a in Illinois. Your LLC’s name must include “Limited Liability Company,” or their abbreviation, “LLC.” It can’t be something that resembles another already existing business. Ensure you as a business owner keep accurate records and reports of your business transactions.
Best Illinois LLC Formation Services
If you’re thinking about starting your LLC in Illinois, it’s a good idea to use a professional service that can handle the process for you. These services will ensure you get all the necessary paperwork filed correctly and timely so that you don’t have to worry about anything going wrong with your business registration.
Finding the Best LLC Formation Services in Illinois
Choosing the best LLC formation services in Illinois is an essential first step for anyone looking to start their own. Here are some of the most critical factors you’ll want to consider:
- Customer service/communication
- Integration with accounting software (if necessary)
These factors will help you narrow down your list of potential providers to find the one that provides you with the professional service you need at an affordable price. We have reviewed some of Illinois’s best LLC formation services here: Best LLC Formation Services.
As mentioned above, it’s usually recommended that if you’re unfamiliar with this kind of thing, then you should consider allowing LLC formation service providers to help you start your own business here in Illinois. These services will ensure that you comply with state law and all the rules and requirements. If anything goes wrong, they’ll have your back so that you don’t have to worry about it.
However, if you’re looking to do it on your own, then you can continue reading our guide on how to start an LLC in the state of Illinois.
The following is a step-by-step guide of what you can expect when forming an LLC in Illinois:
5 Steps to Starting an LLC in Illinois
Step 1: Name your Illinois LLC
Choosing your name can be one of the most challenging parts of starting your Illinois LLC. You’ll have to choose a name that’s not already in use by another Illinois LLC or restricted by the state.
The rules for naming your Illinois limited liability company are as follows:
- Your name cannot mislead people into thinking the Illinois LLC was set up by the government or is a federal government agency.
- The name can’t be too similar to another Illinois company’s
- Your name has to end with an LLC designator (LLC, LTD., etc.)
- You may need to fill out additional paperwork if you want to use certain words in your Illinois LLC name, including bank, trust, trustee, incorporated, Inc., and corporation.
- If you want to see if a specific LLC name is available, you can run a business name search on the Business Entity Search page of the Illinois state website.
After choosing the perfect name for your new Illinois business, you can also secure a good domain name. A domain name is also helpful if you want a business email address @yourllc.com.We recommend using Namecheap to register your domain. They have great prices, fast service, and an easy-to-use website.
Step 2: Choose your Illinois Registered Agent
Before you form your LLC in Illinois, you’ll need to appoint a registered agent with a physical street address in the state of Illinois. This person or entity would be responsible for receiving essential documents on your behalf if anything happened that would require that sort of thing (lawsuits, etc.). You can name yourself as your Illinois registered agent, but that isn’t advisable because you would not be able to claim any anonymity.
What is a Registered Agent?
An Illinois registered agent is an individual or business entity that agrees to accept the service of process on behalf of a Limited Liability Company.
When you create a Limited Liability Company in Illinois, the State of Illinois requires that this registered agent be appointed for your LLC to become effective. The Illinois Secretary of State’s Office will not file your Articles of Organization unless you designate a registered agent on your application form.
Who can be a Registered Agent in Illinois?
For a registered agent, you can select a person or an organization. The individual can be an Illinois resident, an Illinois corporation, or a non-Illinois corporation with a business presence in Illinois.
You can also use an Illinois registered agent service to appoint a registered agent and obtain a business address. Services such as Zenbusiness and Northwest Registered Agent offer this service as a feature of some of their packages when you register an Illinois company with them.
What does a Registered Agent in Illinois do?
A registered agent in Illinois is available during normal business hours to accept important documents and notices on behalf of your LLC. These can be official court papers such as lawsuits or service of process documents that will require the registered agent’s signature.
A registered agent is not responsible for the management of your Illinois LLC, nor are they required to do anything with the documents once they are received at their business address except for filing them under Illinois law.
Step 3: File your Illinois LLC Articles of Organization
You’ve chosen your Illinois name and appointed a registered agent, and now it’s time to create your LLC and become a recognized legal entity.
Before filing, you will need to decide between a member-managed and manager-managed LLC. The members run a member-managed LLC, while a designated manager runs a manager-managed LLC.
To start an LLC in Illinois, you’ll need to file your Articles of Organization with the Illinois Secretary of State, which can be done online. The online filing fee is $150, and a person must file this with authority to do so on behalf of the Illinois LLC.
File your Illinois LLC Articles of Organization Online
You’ll need the following documents to submit your papers:
- The official name of your Illinois LLC
- A brief description of the purpose of your Illinois LLC
- Your Illinois LLC’s street address
- Your Illinois registered agent’s name and address
- The signature of your registered agent
- Your LLC’s authorized person’s signature
- Your return address
You can submit your Articles of Organization through Illinois’s online business filing system.
File your Illinois LLC Articles of Organization by Mail
If you choose not to file online, you can also mail your Articles of Organization to the Secretary of State. The filing fee is $100 and a person must sign the formation documents with authority to do so on behalf of your Illinois LLC. You’ll need the download the filing form and mail it.
Department of Business Services
Limited Liability Division
501 S. Second St., Rm. 351
Springfield, IL 62746
Step 4: Create your Illinois LLC Operating Agreement
After filing your Illinois LLC Articles of Organization, you will want to create an Operating Agreement.
An operating agreement is an internal document that sets out the internal rules of your Illinois LLC. These rules address issues such as how LLC owners will spend the money, whether voting takes place within your business, what happens if someone wants to sell their interest in the company etc.
Illinois does not require an LLC to have an operating agreement, but it is recommended that you create one. An operating agreement ensures that all members know and understand their roles within the company. If they ever need to take legal action, they will show a court of law that the company functions as more than just an unincorporated association.
This operating agreement should be thorough but concise, outlining everything you want to include regarding the membership responsibilities of your Illinois LLC, so there are no misunderstandings down the line.
The operating agreement will also be necessary when you open a business bank account in Illinois.
Step 5: Get an EIN for your Illinois LLC
An EIN, or Employer Identification Number, is a unique number that the IRS issues to businesses for tax purposes. An EIN is like your business’s social security number. You can use it to file state or federal-level tax returns and financial statements with different government agencies or open a business bank account.
An EIN is required for several reasons. First, as mentioned above, it is needed to open a business bank account for your Illinois LLC. You will also need an EIN to hire employees, as it is used on employment tax forms. Finally, an EIN is often required when filing your business taxes.
After you receive your EIN, you will be informed of your Illinois LLC’s various tax classification options.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Applying for an EIN for your business is free of charge.
Illinois LLC Processing Time
Online filings usually take 7-10 business days for the state of Illinois to process your Articles of Organization and approve your LLC.
If you choose to file by mail, the processing time is approximately 10-15 business days.
Illinois LLC Frequently Asked Questions
How much does it cost to start an LLC in Illinois?
The online filing fee is $150, and the mail filing fee is $150 in Illinois.
How do I set up an LLC in Illinois?
Step 1: Choose a name for your Illinois LLC
Step 2: Choose an Illinois Registered Agent
Step 3: File the Articles of Organization
Step 4: Create an Operating Agreement
Step 5: Get an EIN
Is there an annual fee for LLC in Illinois?
The annual filing fee is $150 in the state of Illinois.
How long does it take to start an LLC in Illinois?
It takes 10-15 business days to start an LLC in Indiana when filing by mail and 7-10 business days when filing online. There is no expedited processing available in Indiana.
How to Start an LLC in Illinois
A Beginner’s Guide to Starting an LLC in Illinois