What Is an LLC in Illinois?
A limited liability company formed under the Illinois Limited Liability Company Act (805 ILCS 180/) is a legal entity distinct from its members that combines personal liability protection with flexible governance and favorable federal tax treatment. Members are not personally liable for the company’s debts or obligations—their exposure is limited to their investment in the LLC.
An Illinois LLC is member-managed by default, with each member holding equal rights in the management and conduct of the company’s business, unless the operating agreement designates one or more managers under 805 ILCS 180/15-1. For federal income tax purposes, a single-member LLC is treated as a disregarded entity and a multi-member LLC as a partnership, though either may elect corporate taxation by filing IRS Form 8832.
Illinois does impose an entity-level obligation on pass-through LLCs: the personal property replacement tax, assessed at 1.5 percent of net Illinois income. Multi-member LLCs file Form IL-1065 with the Illinois Department of Revenue to report and pay this tax. This obligation distinguishes Illinois from many states that impose no entity-level tax on pass-through LLCs.
Illinois LLC Name Search
The name of an Illinois LLC must be distinguishable upon the records of the Secretary of State from every other LLC, foreign LLC, corporation, reserved name, and registered assumed name on file. Under 805 ILCS 180/1-10, a name is not considered distinguishable solely because it differs by articles, conjunctions, abbreviations, or the words “limited,” “liability,” or “company.”
The name must contain one of three approved designators: “Limited Liability Company,” “LLC,” or “L.L.C.” It may not include terms associated with other entity types—specifically, “Corporation,” “Corp.,” “Incorporated,” “Inc.,” “Ltd.,” “Co.,” “Limited Partnership,” or “L.P.” The words “trust,” “trustee,” or “fiduciary” may appear in an LLC name only after the organizer has obtained approval from the Secretary of Financial and Professional Regulation under the Corporate Fiduciary Act. A name may not contain any word or phrase whose use is prohibited or restricted by another Illinois statute.
The Secretary of State’s Business Entity Search tool allows organizers to run a preliminary name availability check. An organizer may also submit a Corporate Name Availability Inquiry and receive a preliminary response by email. To secure a name before filing, an organizer may reserve it for 90 days by submitting an application and a $25 fee to the Secretary of State under 805 ILCS 180/1-15. The reserved name may be transferred by delivering a signed notice to the Secretary of State’s office.
Note: A positive result from the online search does not guarantee the Secretary of State will accept the name. Final approval occurs when the articles of organization are reviewed and filed.
Choosing an LLC Registered Agent in Illinois
Every Illinois LLC must continuously maintain a registered agent and registered office within the state, as required by 805 ILCS 180/1-35. The registered agent serves as the LLC’s designated point of contact for service of process, legal notices, and all official correspondence from the Secretary of State.
The registered agent must be either an individual who resides in Illinois or a business entity authorized to transact business in the state. The registered office must be an Illinois address with a street or road designation; a P.O. Box alone does not qualify, and it must be identical to the registered agent’s business office address. An LLC member or organizer with a qualifying Illinois address may serve as the company’s registered agent.
Illinois does not require a separate registered agent consent form to be filed with the Secretary of State. However, the organizer must confirm the agent’s willingness to serve before naming the agent in the articles of organization, because the execution of the articles constitutes “an affirmation by the person, under penalty of perjury, that the facts stated therein are true” under 805 ILCS 180/5-1(a). If the registered agent later resigns, the LLC must designate a replacement within 60 days. Failure to maintain a registered agent may result in administrative dissolution and impair the LLC’s ability to bring or defend lawsuits in Illinois courts.
LLC Filing Requirements in Illinois
An Illinois LLC is organized when its articles of organization are filed with the Secretary of State, or on a later date specified in the articles, not to exceed 60 days after filing. Under 805 ILCS 180/5-5, one or more persons aged 18 or older may act as organizers by executing and delivering the formation document. The articles of organization must include:
- The LLC’s name, including a required designator, and the address of its principal place of business
- The purposes for which the LLC is organized (which may be stated as “the transaction of any or all lawful businesses”)
- The name of the registered agent and the address of the registered office in Illinois
- A confirmation that the LLC has one or more members at the time of filing
- The name and business address of all managers and any member having the authority of a manager
- The duration of the LLC is perpetual unless otherwise stated
- The name and address of each organizer
The filing fee for the articles of organization is $150 for standard processing (approximately 10 business days) or $250 for 24-hour expedited service.
- Online: The fastest option is filing through the Illinois Secretary of State LLC Articles of Organization portal. Credit cards are accepted, though a payment processor fee applies. Debit cards are not recommended for this transaction.
- By Mail: The organizer may download Form LLC-5.5 from the Secretary of State’s LLC publications and forms page and mail it with the filing fee to the Department of Business Services, 501 S. Second St., Room 350, Springfield, IL 62756. Paper filings must be submitted in duplicate.
- In Person: Filings may be delivered in person to the Springfield office at the address above or to the Chicago office at 160 N. LaSalle St., Chicago, IL 60601, during business hours (Monday through Friday, 8:00 a.m. to 4:30 p.m.).
Once the Secretary of State examines and approves the filing, a confirmation is returned to the organizer. Every Illinois LLC must thereafter file an annual report on Form LLC-50.1 with a $75 fee, due within the 60 days preceding the first day of the LLC’s anniversary month, as required by 805 ILCS 180/50-1.
How Much Does it Cost to Create an LLC in Illinois?
| Cost | Mandatory or Optional | Amount | When It Applies | Official Source |
| Articles of organization (standard processing) | Mandatory | $150 | At formation (approximately 10 business days) | Illinois Secretary of State LLC forms and fees |
| Articles of organization (24-hour expedited) | Optional | $250 | At formation, if expedited processing is selected | Illinois Secretary of State LLC forms and fees |
| Series LLC articles of organization (standard) | Mandatory (if forming a series LLC) | $400 | At formation | Illinois Secretary of State LLC filing instructions |
| Name reservation | Optional | $25 | Before formation, if reserving a name | 805 ILCS 180/1-15 |
| Annual report | Mandatory | $75 | Annually, within 60 days before the anniversary month | 805 ILCS 180/50-1 |
| Certificate of good standing | Optional | $25 | When proof of good standing is needed | Illinois Secretary of State—How Do I? |
| Certified copy of filed document | Optional | $25 | When a certified copy is requested | Illinois Secretary of State LLC forms and fees |
| Commercial registered agent service | Optional | Varies by provider | Ongoing, if using a third-party agent | — |
| EIN application (IRS) | Mandatory (if the LLC has employees) / Optional but recommended otherwise | $0 | After formation | IRS EIN Online Application |
LLC Operating Agreement in Illinois
Illinois law authorizes, but does not require, the members of an LLC to adopt an operating agreement governing the company’s internal affairs. Under 805 ILCS 180/15-5, “all members of a limited liability company may enter into an operating agreement to regulate the affairs of the company and the conduct of its business and to govern relations among the members, managers, and company.” The operating agreement is not filed with the Secretary of State — it is a private governance document retained by the LLC and its members.
The statute grants the operating agreement broad authority to modify nearly any default rule in the Act. It may establish manager-managed governance, define the scope of each manager’s authority, allocate profits and losses in proportions other than equal shares, set terms for admitting new members, restrict or permit the transfer of membership interests, and establish procedures for dissolution and winding up. The agreement may also define standards for measuring fiduciary duties, though it may not eliminate the implied covenant of good faith and fair dealing or authorize intentional misconduct.
Where no operating agreement addresses a particular matter, the statutory defaults control. In the absence of a contrary agreement, each member holds equal management rights, matters in the ordinary course are decided by majority vote, and distributions are made “in equal shares” regardless of capital contributions under 805 ILCS 180/25-1. The consent of all members is required for extraordinary actions, including amending the operating agreement, admitting new members, and dissolving the company.
Even a single-member LLC benefits from a written operating agreement. Documenting the LLC’s governance, capitalization, and distribution policies reinforces the legal separation between the member and the entity, which can be critical if a creditor challenges the member’s limited liability protection.
How to Get an EIN for an LLC in Illinois
A federal Employer Identification Number is a nine-digit tax identification number that the Internal Revenue Service assigns to business entities for reporting purposes. Any Illinois LLC that employs workers, files excise tax returns, or withholds taxes on income paid to a nonresident alien must obtain an EIN. Even a single-member LLC with no employees will typically need one to open a business bank account, and the IRS recommends obtaining an EIN before registering with the Illinois Department of Revenue.
The most efficient method is the IRS EIN Online Application, which issues the number immediately upon approval. The applicant must have a valid Social Security number or Individual Taxpayer Identification Number, and the LLC’s principal place of business must be in the United States. The application must be completed in a single session — it cannot be saved and resumed.
An LLC may also apply by completing IRS Form SS-4 and submitting it by fax (processing takes approximately 4 business days) or by mail (4 to 5 weeks). The application requires the name and Taxpayer Identification Number of the LLC’s responsible party—the individual who controls, manages, or directs the entity and its funds and assets. No fee is charged for any EIN application method.
Registering for State Taxes in Illinois
Illinois imposes a flat-rate state income tax on individuals and corporations, and every multi-member LLC taxed as a partnership, or S corporation, must pay the personal property replacement tax at a rate of 1.5 percent on net Illinois income. This entity-level obligation is filed on Form IL-1065 (Partnership Replacement Tax Return) or Form IL-1120-ST (Small Business Corporation Replacement Tax Return) with the Illinois Department of Revenue. Members separately report their distributive shares of the LLC’s income on their individual Illinois income tax returns.
An LLC that sells tangible personal property or taxable services in Illinois must register for a seller’s permit (retailers’ occupation tax certificate). Registration is completed through the MyTax Illinois portal or by filing Form REG-1 (Illinois Business Registration Application). The same registration process establishes accounts for income tax withholding, use tax, and other applicable state taxes. The Department of Revenue processes online registrations faster than paper submissions, which may take six to eight weeks.
Note: A federal EIN is required before registering with the Illinois Department of Revenue. Organizers should obtain the EIN immediately after the Secretary of State files the articles of organization.
| Tax Type | Agency | Registration Method | Fee |
| Personal property replacement tax (1.5% on net income) | Illinois Department of Revenue | MyTax Illinois or Form REG-1 | — |
| Individual income tax (member-level) | Illinois Department of Revenue | Filed on members’ individual returns | — |
| Sales tax (retailers’ occupation tax) | Illinois Department of Revenue | MyTax Illinois or Form REG-1 | No fee to register |
| Income tax withholding (if the LLC has employees) | Illinois Department of Revenue | MyTax Illinois or Form REG-1 | No fee to register |
Registering as an Employer in Illinois
An LLC that hires employees in Illinois must register with the Illinois Department of Employment Security for unemployment insurance, with the Illinois Department of Revenue for income tax withholding, and with an authorized insurance carrier for workers’ compensation coverage. These registrations should be completed before the first payroll date.
Unemployment insurance registration must occur within 30 days of the LLC’s first day of operations as an employer. The Illinois Department of Employment Security (IDES) accepts employer registrations through MyTax Illinois or on paper using Form REG-UI-1. Upon registration, IDES assigns an employer account number and an initial contribution rate.
State income tax withholding registration is handled through the same MyTax Illinois portal or by filing Form REG-1 with the Illinois Department of Revenue. Every employer must withhold Illinois income tax from employee wages and remit it to the Department of Revenue on the prescribed schedule.
Workers’ compensation insurance is mandatory in Illinois for virtually every employer with at least one employee, including part-time workers. The Illinois Workers’ Compensation Commission oversees compliance, and coverage is purchased from private insurance carriers. An employer that knowingly fails to obtain insurance faces fines of up to $500 per day of noncompliance, with a minimum penalty of $10,000, and corporate officers may face criminal liability.
New hire reporting must be completed within 20 days of each employee’s first day on the payroll. IDES administers the Illinois New Hire Directory and accepts reports online, by fax to 1-217-557-1947, or by mail to Illinois New Hire Directory, 115 S. LaSalle St., Chicago, IL 60603-3820. The LLC must also comply with federal employer obligations, including filing IRS Form 941 quarterly, paying FUTA taxes, and completing Form I-9 for each new hire.
| Obligation | Agency | Registration Method |
| Unemployment insurance | Illinois Department of Employment Security | MyTax Illinois or Form REG-UI-1 |
| State income tax withholding | Illinois Department of Revenue | MyTax Illinois or Form REG-1 |
| Workers’ compensation insurance | Illinois Workers’ Compensation Commission (compliance) | Purchase policy from an authorized private carrier |
| New hire reporting | Illinois Department of Employment Security | IDES New Hire Reporting — within 20 days of hire |