Frequently Asked Questions About
Starting a Illinois LLC

There are a few different options when it comes to forming a business in Illinois. From a legal perspective, there are three main types of Illinois for-profit business entities: LLCs, S Corporations or C Corporations. For many entrepreneurs, we believe an LLC provides the right mix of liability protection and ease of administration.

In order to start an LLC in the state of Illinois, there are some minimum requirements you must meet. These are a completed set of Articles of Organization, a business name and a fee you pay to the Iowa Secretary of State, Department of Business Services. We recommend taking some other steps before formally starting your LLC:

• Research your target market to make sure there’s a demand for the products and services you provide.
• Read industry guides to give you a starting point in your niche.
• Create a comprehensive business plan that defines the most important aspects of your Illinois business.
• Write an Operating Agreement that covers how you will run your LLC.

After you’ve created your Illinois LLC, you will also need to review your business license requirements, understand ongoing filing needs, set up a separate business bank account and get an accountant.

In Illinois, you register a business by completing and filing your Articles of Organization with the Illinois Secretary of State, Department of Business Services. You will need to gather information about your business, fill out the form and send it to the Secretary of State along with your filing fee. This will officially form your LLC in Illinois.

You can file your Certificate of Formation on the Secretary of State website or mail it in. Alternatively, Incfile can guide you through every step of the process by getting details from you and filing the form on your behalf — for free! There’s no additional charge for our basic LLC filing service, so all you need to do is pay the Illinois state filing fee.

At the time of writing the fee charged by the Illinois Secretary of State, Department of Business Services is $150. You can always check the latest Illinois filing fees here. You can also pay an additional $100 for expedited filing through Incfile, which will create your LLC faster. Some LLC filing services do charge you extra to prepare and submit your filing documents, but at Incfile, we do this for free — so you only pay the state fee.

Once you’ve gathered all of your information together and filed your Articles of Organization (or had Incfile do it for you), it can take up to 10 business days for the Illinois Secretary of State, Department of Business Services to legally create your LLC. If you pay an additional $100 expedited fee, your LLC can be formed in as little as 24 hours.

When you choose a name for your Illinois LLC it must be unique, so you’ll need to check if it’s already being used by another business. You can do that via the Illinois Secretary of State website, or by using our fast and simple Business Name Search tool.

There are a few ways to register your Illinois LLC name. 

• If you’re creating a new business and your business name is unique in Illinois and meets state naming rules, you simply include it in your Article of Organization.
• If you want to change the legal name of your business, file Articles of Amendment with the Secretary of State.
• If you just want to do business under a different name, file an application to adopt an assumed name with the Illinois Secretary of State, Department of Business Services or have incfile do it on your behalf.

If you want to prevent people from using your business name across the U.S., you can file a trademark for the name. We can help.

In other states, the formal documents that you file to form a corporation or LLC might be known as Articles of Incorporation. In Illinois, this document is called your Articles of Organization, and it performs the same functions as the Articles of Incorporation.

The state of Illinois may refer to Articles of Incorporation at times, but this term is solely used for the formation of corporations within the state.

Yes, the State of Illinois allows the formation of Series LLC within the state. A Series LLC is a special type of LLC where you create one “overall” business and then have individual, series LLCs within it, each counted as separate legal entities.

To form a Series LLC, simply fill out the Series LLC Articles of Organization form and file it with the Secretary of State, Department of Business Services. The processing fee for a Series LLC formation is $400.

Yes, all legal business entities in Illinois, including LLCs, must have a Registered Agent at all times. Here at Incfile, we provide a free Illinois Registered Agent service for the first year if you file through us.

If you wish to change your Illinois Registered Agent you can do so by filing a Statement of Change with the Secretary of State. Here at Incfile, we provide a free Illinois Registered Agent service for the first year if you file through us. If you’ve been using a different Registered Agent and want to switch to us, we’ll file the Statement of Change on your behalf.

If you need to know the Registered Agent of a specific Illinois business, you can perform an Illinois Registered Agent search within the state's business database.

As an LLC, any business profits you earn will be reported on your personal 1040 filing and reported and taxed as “pass-through” income. You will typically need to pay:

• Self-employment or payroll tax on all business profits
• Federal income tax on profits after you meet your tax-free allowance
• Sales tax for selling taxable products and services

Illinois charges a 6.25 percent state sales and use tax on all retail sales, leases and rentals of most goods. You will also need to pay sales tax if you provide a taxable service.You can find a full list of taxable services here.

You will need to register as a sales tax vendor with the Illinois Department of Revenue. You can complete this process online via MyTax Illinois.

The base rate for Illinois sales tax is 6.25 percent, and there may be additional local or municipal sales tax depending on your region, county or city. Once you know your overall sales tax amount, calculate the value of all your taxable products and services. Then, multiply that by your sales tax rate to understand how much you will need to pay.

Once your LLC’s sales tax application is approved, you will receive a letter with instructions on how often you must file a sales tax return and pay sales taxes. Returns and payments may be due monthly, quarterly or annually.

Some businesses will need to pay a corporate franchise tax in Illinois, however it does not apply to LLCs unless your LLC is treated as a C Corporation for tax purposes. Fortunately, new legislation has initiated a phase out of franchise tax beginning in 2020, with the goal to have it completely removed by 2024.

If you're operating a business within Illinois, chances are you'll need some type of business license to continue business activities. The types of business licenses you need will vary depending on your type of business, industry, location and various other factors. We can research the types of business licenses you might need for you.