State of Illinois LLC: Everything You Need to Know
A state of Illinois LLC is a limited liability company that offers its owners personal liability protection as well as the benefits of pass-through taxation.3 min read
A state of Illinois LLC is a limited liability company that offers its owners personal liability protection as well as the benefits of pass-through taxation. To create an LLC in Illinois, follow these steps:
- Choose an appropriate, available LLC name.
- Select a registered agent.
- File your Articles of Organization with the state.
- Create an operating agreement.
- Obtain an EIN.
- Register with the Department of Revenue.
LLCs are popular with small business owners because they're generally easy and inexpensive to start. They also allow more flexibility in how to run your business, especially compared to the more formal, regulated corporate structure.
How to Start an Illinois LLC: Choose a Name and Registered Agent
The first, most important step you'll take when starting your LLC is choosing a name. You should conduct some research so that you select a name that's suited to your business. You also want potential clients to easily remember and find it.
Follow Illinois' naming guidelines, which include the following:
- Your business name must end with words or abbreviations that indicate it's an LLC, such as “Limited Liability Company” or “LLC.”
- Some words are restricted — such as “University” or “Attorney” — and require you to submit additional paperwork to use them.
- Other words are prohibited, such as “FBI” or “Secret Service,” to prevent confusion between a state or federal agency and your company.
Check the State of Illinois website for the availability of your desired name. You must choose a name that's unique and distinguishable from existing businesses in the state. When you conduct your search, if you get no matching results for your desired name, it's likely available for you to use. Keep in mind that checking the state database is only a preliminary check. Final approval will be determined by the state.
Next, you must designate a registered agent — also called a statutory agent, agent for service of process, or resident agent — for your business. This is an individual or company that sends and receives legal paperwork on your LLC's behalf. The type of paperwork an agent handles includes state filings and service of process.
Your registered agent must have a physical street address in Illinois or it must be a company with authorization to conduct business in the state.
To officially register your business, you'll file an Articles of Organization with the state. You can do this in person, online, or by mail. In your Articles, you'll indicate whether your LLC is manager-managed or member-managed.
It costs $150 to file your Articles, and an additional $100 if you want to expedite processing. Online processing time is one to two days, and mail or fax processing time is about two weeks.
You can pay using one of the following methods:
- Money order
- Cashier's check
- Certified check
- C.P.A. check
- Illinois attorney's check
Illinois doesn't require LLCs to have an operating agreement, but it's still good practice to create one for your own records, especially if your business has more than one owner or member. This is a legal document that details your LLC's ownership and operating procedures.
Typical agreements outline the following:
- Member roles
- Voting rights
- Management style
- Procedures for admitting or removing members
- Business dissolution
- How to amend the agreement
Federal and State Government Requirements
You'll apply for an Employer Identification Number, also called an EIN or Federal Tax ID number. It's an identifying number for your business, similar to a Social Security Number. You'll need an EIN to file your business taxes and to open a business bank account.
You can obtain an EIN from the IRS free of charge by applying online or by mail. If your LLC has at least two members, you must have an EIN for tax purposes.
Illinois also requires LLCs to register with the state Department of Revenue. You can register online or by mail.
For many startup owners, LLCs offer an ideal way to start their own business. Many people can follow these simple steps without help from an attorney. You can always refer to the Secretary of State website for additional information, requirements, resources, and tips for forming your new company.
If you need help with an LLC in Illinois or another state, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.