How to Start an LLC in Illinois (2025 Guide)

How to Form an LLC in Illinois in 5 Steps

In order to form your LLC in Illinois, you will need to complete the following steps:

1. Name Your LLC
2. Choose a Registered Agent
3. File Your Articles of Organization 
4. File Your LLC Operating Agreement 
5. Obtain an EIN

Step 1: Name Your Illinois LLC

This first step toward starting your Illinois LLC is to choose a name. 

Your business name should be both memorable and easy to search for by potential clients as well as follow the state’s naming guidelines.

1. Important Naming Guidelines for Illinois LLCs

• Your name must contain — apart from any other word or abbreviation — the words “Limited Liability Company” or the abbreviations “LLC.” or “L.L.C.”
• Your name cannot contain the terms “Corporation,” “Corp,” “Incorporated,” “Inc,” “Ltd,” “Co.,” Limited Partnership,” or “LP.” 
• Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
• Your name cannot include improper names (i.e., names that contain any word or words that may be offensive to “good taste and decency.”). 
• Your name must be distinguishable from any other Illinois limited liability company, corporation, limited liability partnership, or limited partnership.
• Your name cannot contain any “restricted terms” (i.e., “Trust,” “Fiduciary,” and “Bank,”) without written approval from the relevant state government body.

For a complete list of Illinois LLC naming guidelines, we recommend having a look at the Illinois naming guidelines.

2. Conduct a Business Name Search in Illinois

Make sure the name you want isn’t already taken by doing a business entity search on the Secretary of State’s Illinois website.

If you’re not going to start your LLC right away, it might be a good idea to consider reserving your name for up to 90 days. You can do this by filing Form LLC-1.15 with the SOS and paying a $25 filing fee. 

For more information, you can have a look at our Illinois LLC Name Search guide. 

3. Conduct a Domain Name Search

We recommend that you check online to see if your business name is available as a web domain. Even if you don’t plan to make a business website right away, this is an extremely important step as it will prevent others from acquiring it.

Once you have verified your name is available, you may now select a professional service to complete the LLC formation process for you.

FAQ: Naming an Illinois LLC

Step 2: Choose an Illinois Registered Agent

After you find the right name for your LLC, you will need to nominate an Illinois registered agent with a registered office in Illinois. This is a requirement for all LLCs in Illinois. 

What is a registered agent? A registered agent is an individual or business entity responsible for receiving important legal documents on behalf of your business. Think of your registered agent as your business’s primary point of contact with the state.

Who can be a registered agent? A registered agent must be a resident of Illinois or a corporation – such as a registered agent service, an individual (e.g., yourself, etc.), or a business attorney – who is authorized to transact business in Illinois.  

FAQ: Nominating a Registered Agent

Step 3: File the Illinois LLC Articles of Organization

To register your Illinois LLC, you will need to file Form LLC-5.5: Articles of Organization with the Secretary of State. You can do this online or by mail.

Before filing, you will need to make sure that you have completed your Articles of Organization correctly. In order to do this, you will need to have the following information on hand: 

• Your LLC’s name
• Your principal business address (this cannot be a P.O. box)
• The effective formation date of your LLC (you can delay this for up to 60 days post-filing)
• Your registered agent’s name and registered office address (a P.O. Box alone isn’t sufficient) 
• Your LLC’s business purpose
• Your LLC’s duration (if applicable)
• The names and business addresses of all LLC managers and organizers

File the Articles of Organization

OPTION 1: File Online With Cyberdrive Illinois

File Online

– OR –

OPTION 2: File Form LLC-5.5 by Mail

Download Form

State Filing Cost: $150, payable to Secretary of State (Nonrefundable)

Mailing Address:
Department of Business Services
Limited Liability Division
501 S. Second St., Rm. 351
Springfield, IL 62746

For help with completing the form, visit our Illinois Articles of Organization

If you’re expanding an existing LLC to the state of Illinois, you will need to form a foreign LLC.

FAQ: Filing Illinois LLC Documents

Step 4: Create an Illinois LLC Operating Agreement

In Illinois, LLCs are not required to have an operating agreement, but it’s a good practice to have one.

An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.

You can use the free tool in our Business Center to create a custom operating agreement in minutes — or download our free templates:

• Illinois Single-Member LLC Operating Agreement
• Illinois Multi-Member LLC Operating Agreement

FAQ: Creating an Illinois LLC Operating Agreement

Step 5: Get an Illinois LLC EIN

You can get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for free. This nine-digit number is used to identify and keep track of a business’s tax reporting. You can think of it like a Social Security number (SSN) for your business.

Why do I need an EIN? An EIN is required for the following:

• To open a business bank account for the company
• For federal and state tax purposes
• To hire employees for the company

Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.

FOR INTERNATIONAL APPLICANTS: You do not need an SSN to get an EIN. Learn more here.

Get an EIN

Option 1: Request an EIN from the IRS

Apply Online

– OR –

Option 2: Apply for an EIN by Mail or Fax

Download Form

Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: Free

FAQ: Getting an EIN

Best LLC Services in Illinois Compared

For a comprehensive comparison, read our Best LLC Services review. We reviewed and ranked the top LLC formation services to help you determine the best fit for your new business. 

Important Next Steps to Protect Your Illinois LLC

After you form your LLC, you’ll need to complete key steps in order to:

• Separate your personal and business assets
• Stay compliant with state and federal laws

Get a Business Bank Account & Credit Card

Using a dedicated business banking account and business credit card is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (i.e., your home, car, and other valuables) are at risk in the event someone sues your LLC. In business law, this is referred to as piercing your corporate veil.

You can protect your personal assets by:

1. Opening a business bank account:

• Separates your personal assets from your company’s assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

2. Getting a business credit card:

• Helps you separate personal and business expenses.
• Builds your company’s credit history, which can be useful to raise capital later on.

Get Insurance

Even though an LLC offers limited liability, you’ll still likely need to purchase some form of business insurance to protect your LLC’s assets. The most common types are:

• General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
• Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
• Workers’ Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. In Illinois, businesses with one or more employees, including LLC members and corporate officers, are required by law to have workers compensation insurance.

Want to learn exactly what coverage your Illinois business may need? Read our full Illinois Business Insurance Guide.

Obtain Business Licenses If Needed

While Illinois doesn’t require a general state business license, you will need to register your business with the Illinois Department of Revenue to receive a Certificate of Registration and taxpayer ID. 

Additionally, your LLC may need specific licenses or permits based on its industry, location, and activities:

• State-Level Licenses: Check the state’s Registration, Licenses &Permits page to determine if your business requires any state-issued licenses or permits.
• Local Licenses: Check with your city or county clerk’s office to identify any local licensing requirements, such as zoning permits or health department approvals.
• Federal Licenses: If your business activities are regulated by a federal agency (e.g., selling alcohol or firearms or operating in the transportation industry), consult the U.S. Small Business Administration’s website to determine the necessary federal licenses or permits.

For a comprehensive overview and step-by-step instructions, refer to our Illinois Business License Guide.

Pay Illinois LLC Taxes 

LLCs in Illinois will need to pay a number of taxes at a local, state, and federal level:

Federal LLC Tax Requirements

As a pass-through entity, profits typically flow to your personal tax return. LLC members pay self-employment tax (15.3%) on their earnings.

Income Taxes

As a small business owner based in Illinois, there are several statewide taxes for you to be aware of that may be levied on your income, including:

• Personal Income Tax: In Illinois, each member of your LLC will pay this tax at a flat rate of 4.95% on their share of the business’s profits and submit their own individual tax return to the state using Form IL-1040 to declare their income.
• Corporate Income Tax: LLCs choosing to operate as C Corps are required to pay a 9.50% corporate income tax on their total net income. When filing a state income tax return in Illinois, these LLCs must complete and submit Form IL-1120 to the Illinois Department of Revenue.

Sales and Use Taxes

If you’re selling a physical product, you will need to register for a seller’s permit, also known as a sales tax permit, through the MyTax Illinois platform.  

This permit allows a business to collect sales tax on taxable sales.

Sales tax, also called “Sales and Use Tax,” is a tax levied by states, counties, and municipalities on business transactions that involve the exchange of certain taxable goods or services.

Read our sales tax guide to find out more.

Employer Taxes

If you have employees in Illinois, you’ll need to register for Unemployment Insurance Tax through the Illinois Department of Employment Security. You’ll also need to sign up for Employee Withholding Tax through the Illinois Department of Revenue.

Local Taxes 

In addition to state taxes, there are a number of specific taxes imposed by local authorities. These vary based on industry, location, and more. 

You can find a full list of taxes imposed by local governments in Illinois on the Illinois Department of Revenue website. 

Personal Property Replacement Tax

Illinois LLCs are required to pay personal property replacement tax (PPRT) to the Illinois Department of Revenue. The rate imposed depends on on how the LLC elects to be taxed: 

• C Corporations: 2.5% on net Illinois income 
• S Corporations: 1.5% on their net Illinois income

Most Illinois LLCs must file their state tax returns by April 15. For help understanding your full tax obligations — and making sure nothing gets missed — check out our full Illinois LLC Tax Guide.

File Your LLC Annual Report

Illinois requires all LLCs to file an annual report with the Secretary of State’s Department of Business Services in order to remain compliant. 

Annual reports are due prior to the first day of the month your LLC was formed. You can file your annual report online through the SOS’s website or via mail by downloading and completing Form LLC-50.1. The cost for this is $75. 

Note: Be sure to file your annual report on time, as Illinois charges a $100 penalty fee for missing the deadline. To stay on top of this deadline and other important compliance tasks, we recommend hiring a professional registered agent service — they can help ensure you never miss a filing.

Illinois Business Resources

• TRUiC Business Center
• Local Resources
• Illinois Small Business Development Centers
• Illinois Secretary of State Business Services
• Illinois.gov Business Services
• Illinois LLC Statutes