Forming a Limited Liability Company (LLC) in Illinois is an easy process, but it involves a few steps.
Start an Illinois LLC for $0 + state fee
To form an LLC in Illinois for free + state fee, we have listed 3 options to consider:
You can go online and visit the Illinois Secretary of State’s website and do it yourself or you can use the ‘free’ service from Incfile or ZenBusiness.
- DIY $0 + state fee
- Bizee $0 + state fee
- ZenBusiness $0 + state fee
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- Northwest $39 + state fee ‘Privacy by Default’
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Forming an LLC in Illinois for $0 (DIY Summary)
Here’s a brief step-by-step guide to help you through the DIY process, along with relevant links to official resources:
Step 1: Choose a Name for Your LLC
The first step is to select a unique name for your LLC. Make sure the name complies with Illinois naming requirements and is not already in use by another business entity.
You can check the availability of your desired name through the Illinois Secretary of State’s Business Services website.
Step 2: Appoint a Registered Agent
Every LLC in Illinois must have a registered agent who will receive legal and official documents on behalf of the company.
The registered agent can be an individual resident of Illinois or a business entity authorized to conduct business in the state.
Step 3: File Articles of Organization
The next step is to file the Articles of Organization with the Illinois Secretary of State.
This document officially establishes your LLC and includes essential information such as the LLC’s name, address, registered agent, and purpose of the company.
You can file the Articles of Organization online through the Illinois Secretary of State’s Business Services website or by mail.
Step 4: Create an Operating Agreement
Although not required by the state of Illinois, it is highly recommended to create an Operating Agreement for your LLC.
This legal document outlines the ownership structure, management responsibilities, and operational guidelines of your company.
It helps establish clear rules and procedures for your LLC’s day-to-day operations.
Step 5: Obtain Necessary Permits and Licenses
Depending on the nature of your business, you may need to obtain specific permits and licenses to operate legally in Illinois.
The Illinois government website provides comprehensive information on the licenses and permits required for different types of businesses.
Step 6: File Annual Reports
Once your LLC is formed, you are required to file an Annual Report with the Illinois Secretary of State.
The Annual Report confirms and updates the information regarding your LLC, such as the address, members, and registered agent.
It is important to file the Annual Report on time to maintain your LLC’s active status.
Step 7: Comply with Tax and Regulatory Requirements
Your LLC will be subject to various tax and regulatory obligations. You need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) if you have employees or if your LLC is taxed as a corporation.
Additionally, make sure to comply with state and local tax requirements and any industry-specific regulations.
Illinois LLC: Definitions
Limited Liability Company (LLC): A business structure that combines the limited liability protection of a corporation with the flexibility and tax benefits of a partnership. It offers personal asset protection for its owners while allowing them to pass profits and losses through their individual tax returns.
Secretary of State: The government agency responsible for overseeing business entity formations and registrations in Illinois. The Illinois Secretary of State’s office maintains the state’s business entity database and handles the filing of LLC formation documents.
Articles of Organization: The legal document required to formally create an LLC in Illinois. It includes essential information about the LLC, such as its name, registered agent, purpose, and the names of its members or managers.
Registered Agent: An individual or business entity designated to receive legal documents, such as lawsuits and official correspondence, on behalf of the LLC. The registered agent must have a physical address in Illinois and be available during regular business hours.
Operating Agreement: A written agreement that outlines the internal operations, ownership structure, management responsibilities, and decision-making processes of the LLC. Although not required by Illinois law, having an operating agreement is highly recommended for LLCs.
Employer Identification Number (EIN): Also known as a Federal Tax Identification Number, an EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business entity for tax purposes. LLCs often need an EIN to hire employees, open bank accounts, and file federal taxes.
Annual Report: A yearly filing required by the Illinois Secretary of State to maintain an active status for the LLC. It includes updated information about the LLC’s members, managers, and registered agent. Failure to file the annual report can result in penalties and potential dissolution of the LLC.
Operating Agreement: A written agreement that outlines the internal operations, ownership structure, management responsibilities, and decision-making processes of the LLC. Although not required by Illinois law, having an operating agreement is highly recommended for LLCs.
Professional Limited Liability Company (PLLC): A specialized type of LLC that is formed by licensed professionals such as doctors, lawyers, accountants, or architects. PLLCs must comply with additional regulations and restrictions imposed by their respective professional licensing boards.
Series LLC: A unique type of LLC allowed in Illinois that enables a single LLC to establish separate series or divisions with separate assets, liabilities, and members. Each series operates independently, providing liability protection between the series within the LLC structure.