Illinois LLC Formation – Basics & Helpful Information
General Overview of the Process to Form an LLC in Illinois
This article is meant to be a general overview of the Illinois LLC formation process and other basic issues related to Illinois LLCs.
Illinois Filing Time
If the Articles of Organization are filed online (or paper filing with the expedited fee), the processing time is about 24 hours.
If the Articles of Organization are filed in paper form, the processing time generally takes up to 15-20 business days depending on the current workload. An expedited processing fee of $100.00 for paper filing reduces the turnaround time to 24 hours from receipt of the approved Article of Organization and must be made in person at the Chicago office.
Illinois Annual Compliance Requirements
An Illinois LLC is required to file an Annual Report with the Illinois Secretary of State to maintain its existence. This report is due each year prior to the first day of the company’s anniversary month (the month in which the company is organized) and may be completed by online or paper filing. The fee to file the Annual Report by paper filing is $250.00, and online filing is $300.00 which includes a $50.00 expedited fee for 24 hr. processing time.See more Info on Illinois Annual Reports →
Form an LLC in Illinois
You can use this checklist to help guide you through the process of forming an Illinois LLC:
Step 1: Decide on a Business Name
The first step in creating an LLC in Illinois is naming your business. You’ll need to check with the Illinois Secretary of State to make sure the name you’ve chosen is available. You can do this online via the Illinois Business Search.
It is also highly recommended that you check the US Patent and Trademark Office to see if someone has a federal trademark of the business name you want (the Illinois Secretary of State will not check other state’s databases or the federal trademark database). You can click here to have a comprehensive name availability search performed for you.
Your LLC name must contain the words Limited Liability Company or the abbreviations L.L.C. or LLC, and cannot contain the terms Corporation, Corp., Incorporated, Inc., Ltd., Co., Limited Partnership or L.P. The name of the LLC must be distinguishable from other business entities in Illinois.
Illinois Trade Names
A trade name is similar to a “doing business as” (DBA) name. Although a trade name is not legally required, it is a wise business practice. A trade name or “assumed name” may be adopted in Illinois in 5 year increments and can be renewed. Illinois trade or assumed names are only applicable in Illinois and are not substitutes for a national trademark filing.See more info on Illinois Trade Names →
Step 2: Register your LLC with the State
Illinois Articles of Organization
Your Illinois LLC is formed by signing and filing Articles of Organization with the Illinois Secretary of State. You can also e-file the Illinois Articles of Organization. The Illinois Secretary of State staff will examine the articles for statutory compliance and will either approve the articles for filing or reject the articles with instructions on how to resubmit the document.
The Articles of Organization must include at a minimum:
- Name of the Illinois LLC
- Physical or street address of the principal place of business of the LLC in Illinois
- Registered Agent’s Name and physical Address
- Management Structure of the LLC
- Purpose of the LLC
- Duration of LLC
- Names and addresses of the initial managers or members
- Organizer’s Name and Signature
- Effective date of the Articles of Organization
Illinois Registered Agent Information
Illinois requires that the LLC have a Registered Agent, which is an individual or a business entity the LLC appoints for the purpose of accepting service of process (lawsuit papers or legal documents) for the LLC, and any correspondence from the Illinois Secretary of State. An LLC cannot be its own registered agent, but the LLC can appoint one of its members as the registered agent. The registered agent can be an individual who resides in Illinois, or an entity authorized to transact business in the state. Illinois law requires that the registered agent have a permanent, physical address on the records of the Illinois Secretary of State at all times. The registered agent must approve of the appointment.Read more about Registered Agents →
Step 3: Create and Sign the LLC’s Governing Document
The governing document for an LLC is called the “company agreement” or sometimes the “operating agreement”. The company agreement is to an LLC like a partnership agreement is to a partnership (or bylaws to a corporation). The company agreement governs the internal operation of the LLC and is typically a private document that is kept in the company book and the principal place of business (it is NOT filed with the state). The company agreement can address many issues, some of the more common concepts found within a company agreement are:
- Limitations on the members liabilities
- The level of consent needed to take various actions (i.e. simple majority required to add new members)
- The percentage of the LLC that each member owns
- How profits and losses are allocated between the members (typically based on ownership percentages)
- Limitations on transferability
- What each member is contributing to the LLC and what happens is such contributions are not made.
- The authority of the members, officers, managers, committees, etc.
- How meeting are conducted
One of the reasons we recommend using an LLC formation company like IncFile is that they can provide you with a company agreement in connection with their LLC formation services.
Step 4: Get an EIN
After you form an LLC in Illinois, you can get the EIN. There are a few different ways to get an EIN:
- Apply Online Yourself: The IRS has an online EIN Application you can use to get an EIN. The turn around time on the EIN using this method is only a few minutes.
- Use Form SS-4: You can get an EIN the old fashion way by completing Form SS-4 and mailing or faxing into the IRS. How long does it take to get the EIN this way? According to the IRS: if you mail in Form SS-4, it will take 4-5 weeks to get your EIN. If you fax in Form SS-4 you should have the EIN back in a week if you provide a fax number or 2 weeks if you don’t have a fax number.
- Have a Third-Party Obtain: All of the LLC formation companies have the ability to get the EIN for you. The EIN obtainment charge varies by company, but it is generally between $50 and $100. If you get one of the higher priced packages, they will sometimes throw in the EIN for free.
Step 5: Get Licenses and Permits
After you create your new Illinois LLC, you’ll need to determine if your business/profession requires any licenses or permits to conduct business.Read more about Illinois Licensing and Permitting →
Registering a Foreign LLC in Illinois
If you have a non-Illinois LLC (aka Foreign LLC) and you are doing business in Illinois, you may need to register the Foreign LLC in Illinois. Each state has a different definition of “doing business”. In Illinois, the kinds of activities that would not constitute “doing business” are outlined in the Illinois Compiled Statutes Annotated, Chapter 805, Section 180/45-47.
The filing fee for the Application for Admission to Transact Business in Illinois is $500.See more about registering a foreign LLC in Illinois →