To form an LLC in Illinois, you file Articles of Organization (Form LLC-5.5) with the Illinois Secretary of State and pay a $150 filing fee. Filing is only the first step, though. A well-set-up LLC also needs a registered agent, an EIN, an operating agreement, and a plan for staying in good standing each year. Here’s what the process looks like and where an attorney can help.
Step-by-step: how to form an LLC in Illinois
- Choose a business name
Your LLC’s name must be distinguishable from other businesses already registered with the Illinois Secretary of State. It must also include “Limited Liability Company,” “L.L.C.,” or “LLC.”
- Appoint a registered agent
A registered agent receives legal papers and official notices for the LLC. The agent can be an Illinois resident or a business entity authorized to operate in Illinois, and must have a physical Illinois address (not a P.O. box).
- File Articles of Organization
This is the filing that legally creates your LLC. The Articles list the company’s name, principal address, registered agent, whether the LLC is member-managed or manager-managed, and its organizers.
- Get an EIN from the IRS
An Employer Identification Number (EIN) is your LLC’s federal tax ID. It’s required for multi-member LLCs and for any LLC with employees.
- Create an operating agreement
Illinois doesn’t require an operating agreement, but we strongly recommend one, especially if your LLC has more than one member. It sets out who owns what, how decisions are made, how profits are split, and what happens if a member wants out, becomes disabled, or passes away.
- Register for state taxes and local licenses, if needed
Depending on what your business does, you may need to register with the Illinois Department of Revenue (for example, to collect sales tax or withhold employee wages).
- Open a separate business bank account
Keeping business and personal money separate is one of the most important ways to protect the liability shield an LLC is meant to provide.
- File your annual report every year
Every Illinois LLC files an annual report with the Secretary of State. It’s due before the first day of your LLC’s anniversary month, meaning the month it was formed.
Why use an attorney instead of an online filing service?
Online services can file the paperwork. What they usually don’t do is advise you on how the LLC should be set up for your situation. We help clients think through questions like:
- Should the LLC be member-managed or manager-managed?
- What should the operating agreement say about ownership percentages, buyouts, and disagreements between members?
- Should the LLC hold real estate? Many clients form LLCs to own rental or commercial property. Moving property into an LLC involves a deed, and possibly your lender and title insurance, so it’s worth planning before you transfer anything.
- How does the LLC fit with your estate plan? If you have a living trust, it may make sense for the trust to own your LLC interest. That can help the business pass to your beneficiaries without probate.
How Lauren Jackson Law can help you form your LLC
We can handle the LLC formation process from start to finish, including:
- Checking name availability
- Preparing and filing your Articles of Organization
- Drafting an operating agreement tailored to your business
- Obtaining your EIN
- Explaining your annual report and ongoing compliance deadlines
- Coordinating the LLC with your real estate holdings or estate plan
We have offices in St. Charles and Elgin and work with business owners throughout Kane County and surrounding areas.
Ready to start your LLC? Call us at (847) 714-2866 or contact us online to schedule a consultation.