Understanding Illinois LLC Laws
The rules for starting and running an Illinois limited liability company (LLC) are laid out by Illinois's LLC laws.
In this guide, we offer simple explanations to Illinois LLC laws about:
- LLC Formation Requirements
- Registered Agent Duties and Appointment
- Operating Agreements
- Annual Report Requirements
To learn more about starting an LLC, visit our form an LLC guide.
LLC Formation Requirements
Illinois LLC laws set out the requirements for forming an LLC. The State of Illinois has created the Secretary of State LLC portal and PDF Articles of Organization form to simplify the process.
Illinois LLC Formation Statute
The following LLC formation statutes are from the Illinois Limited Liability Company Act:
Illinois LLC Act, Section 5-1. Organization.
(a) One or more persons, other than natural persons under 18 years of age, may organize a limited liability company by executing and delivering articles of organization to the Secretary of State as specified in Sections 5-5 and 5-45. The organizers need not be members of the limited liability company. Each organizer of a limited liability company organized to engage in the practice of medicine shall be a licensed physician of this State or an attorney licensed to practice law in this State. The execution of the articles of organization constitutes an affirmation by the person, under penalty of perjury, that the facts stated therein are true.
(b) A limited liability company shall have one or more members.
(c) A limited liability company is a legal entity distinct from its members.
(Source: P.A. 93-59, eff. 7-1-03.)
Illinois LLC Act, Section 5-5. Articles of organization.
(a) The articles of organization shall set forth all of the following:
(1) The name of the limited liability company and the address of its principal place of business which may, but need not be a place of business in this State.
(2) The purposes for which the limited liability company is organized, which may be stated to be, or to include, the transaction of any or all lawful businesses for which limited liability companies may be organized under this Act.
(3) The name of its registered agent and the address of its registered office.
(4) A confirmation that the limited liability company complies with the requirement in subsection (b) of Section 5-1 that the company has one or more members at the time of filing or, if the filing is to be effective on a later date, that the company will have one or more members on the date the filing is to be effective.
(5) The name and business address of all of the managers and any member having the authority of a manager.
(5.5) The duration of the limited liability company, which shall be perpetual unless otherwise stated.
(6) (Blank).
(7) The name and address of each organizer.
(8) Any other provision, not inconsistent with law, that the members elect to set out in the articles of organization for the regulation of the internal affairs of the limited liability company, including any provisions that, under this Act, are required or permitted to be set out in the operating agreement of the limited liability company.
(b) A limited liability company is organized at the time articles of organization are filed by the Secretary of State or at any later time, not more than 60 days after the filing of the articles of organization, specified in the articles of organization.
(c) Articles of organization for the organization of a limited liability company for the purpose of accepting and executing trusts shall not be filed by the Secretary of State until there is delivered to him or her a statement executed by the Secretary of Financial and Professional Regulation or successor State board, department, or agency having jurisdiction over the regulation of trust companies that the organizers of the limited liability company have made arrangements with the Secretary of Financial and Professional Regulation or successor State board, department, or agency having jurisdiction over the regulation of trust companies to comply with the Corporate Fiduciary Act.
(d) Articles of organization for the organization of a limited liability company as a bank or a savings bank must be filed with the Secretary of Financial and Professional Regulation or successor State board, department, or agency having jurisdiction over the regulation of banks or savings banks or, if the bank or savings bank will be organized under federal law, with the appropriate federal banking regulator.
(Source: P.A. 98-171, eff. 8-5-13; 99-227, eff. 8-3-15; 99-637, eff. 7-1-17.)
Start forming your LLC by reading our formation services review.
What This Means: Key Takeaways*
The Illinois LLC statute provides the requirements for setting up (or forming) an LLC. The State of Illinois offers online and mail-in LLC filing to meet these requirements.
Required Information for Illinois LLC Formation:
- LLC’s name (Must meet Illinois LLC naming requirements)
- The lawful purpose of the LLC
- The name and addresses of any LLC managers
- LLC principal office’s street and mailing address
- Registered agent’s name and the Illinois address of the registered office
Optional Information for Illinois LLC Formation:
- LLC organizers can add their own provisions as long as the provisions don’t conflict with LLC statute.
Recommended: For help with completing the LLC formation forms, visit our Illinois LLC Articles of Organization guide.
Registered Agent Duties and Appointment
Illinois LLC laws define the duties and appointment of the LLC registered agent.
Illinois LLC Registered Agent Statute
The following registered agent statutes are from the Illinois Limited Liability Company Act:
Illinois LLC Act, Section 1-5. Definitions. As used in this Act, unless the context otherwise requires:
"Registered office" means that office maintained by the limited liability company in this State, the address, including street, number, city and county, of which is on file in the office of the Secretary of State, at which, any process, notice, or demand required or permitted by law may be served upon the registered agent of the limited liability company.
"Registered agent" means a person who is an agent for service of process on the limited liability company who is appointed by the limited liability company and whose address is the registered office of the limited liability company.
Illinois LLC Act, Section 1-35. Registered office and registered agent.
(a) Each limited liability company and foreign limited liability company shall continuously maintain in this State a registered agent and registered office, which agent must be an individual resident of this State or other person authorized to transact business in this State.
(b) A limited liability company or foreign limited liability company may change its registered agent or the address of its registered office pursuant to Section 1-36 and the registered agent of a limited liability company or a foreign limited liability company may change the address of its registered office pursuant to Section 1-37.
(c) The registered agent may at any time resign by filing in the Office of the Secretary of State written notice thereof and by mailing a copy thereof to the limited liability company or foreign limited liability company at its principal office as it is known to the resigning registered agent. The notice must be mailed at least 10 days before the date of filing thereof with the Secretary of State. The notice shall be executed by the registered agent, if an individual, or, if a business entity, in the manner authorized by the governing statute. The notice shall set forth all of the following:
(1) The name of the limited liability company for which the registered agent is acting.
(2) The name of the registered agent.
(3) The address, including street, number, and city of the limited liability company's then registered office in this State.
(4) That the registered agent resigns.
(5) The effective date of the resignation, which shall not be sooner than 30 days after the date of filing.
(6) The address of the principal office of the limited liability company as it is known to the registered agent.
(7) A statement that a copy of the notice has been sent by registered or certified mail to the principal office of the limited liability company within the time and in the manner prescribed by this Section.
(d) A new registered agent must be placed on record within 60 days after a registered agent's notice of resignation under this Section.
(Source: P.A. 96-988, eff. 7-2-10.)
What This Means: Key Takeaways*
A registered agent’s job is to accept service of process (legal summons to a lawsuit).
An Illinois registered agent must:
- Maintain a registered office in Illinois (i.e., no P.O. boxes)
- Be an individual, an Illinois corporation or LLC, or foreign corporation or LLC with a business address that is the same as the registered office address
Registered agent information is kept on file by the State of Illinois. If you change your registered agent or if your registered agent resigns, you must file a change of registered agent form.
Operating Agreements
Illinois LLC laws provide guidelines for creating and maintaining an LLC operating agreement.
The following operating agreement statutes are from the Illinois Limited Liability Company Act:
Illinois LLC Act, Sec. 1-5. Definitions. As used in this Act, unless the context otherwise requires:
"Operating agreement" means the agreement under Section 15-5, whether or not referred to as an operating agreement and whether oral, in a record, implied, or in any combination thereof, of all of the members of a limited liability company, including a sole member, concerning the relations among the members, managers, and limited liability company. The term "operating agreement" includes amendments to the agreement.
Illinois LLC Act, Section 15-5. Operating agreement.
(a) 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 may establish that a limited liability company is a manager-managed limited liability company and the rights and duties under this Act of a person in the capacity of a manager. To the extent the operating agreement does not otherwise provide, this Act governs relations among the members, managers, and company. Except as provided in subsections (b), (c), (d), and (e) of this Section, an operating agreement may modify any provision or provisions of this Act governing relations among the members, managers, and company.
(b) The operating agreement may not:
(1) unreasonably restrict a right to information or access to records under Section 1-40 or Section 10-15;
(2) vary the right to expel a member in an event specified in subdivision (6) of Section 35-45;
(3) vary the requirement to wind up the limited liability company's business in a case specified in subdivision (4), (5), or (6) of subsection (a) of Section 35-1;
(4) restrict rights of a person, other than a manager, member, and transferee of a member's distributional interest, under this Act;
(5) restrict the power of a member to dissociate under Section 35-50, although an operating agreement may determine whether a dissociation is wrongful under Section 35-50;
(6) (blank);
(6.5) eliminate or reduce the obligations or purposes a low-profit limited liability company undertakes when organized under Section 1-26;
(7) eliminate or reduce the obligation of good faith and fair dealing under subsection (d) of Section 15-3, but the operating agreement may determine the standards by which the performance of the member's duties or the exercise of the member's rights is to be measured;
(8) eliminate, vary, or restrict the priority of a statement of authority over provisions in the articles of organization as provided in subsection (h) of Section 13-15;
(9) vary the law applicable under Section 1-65;
(10) vary the power of the court under Section 5-50; or
(11) restrict the right to approve a merger, conversion, or domestication under Article 37 or the Entity Omnibus Act of a member that will have personal liability with respect to a surviving, converted, or domesticated organization.
(c) The operating agreement may:
(1) restrict or eliminate a fiduciary duty, other than the duty of care described in subsection (c) of Section 15-3, but only to the extent the restriction or elimination in the operating agreement is clear and unambiguous;
(2) identify specific types or categories of activities that do not violate any fiduciary duty; and
(3) alter the duty of care, except to authorize intentional misconduct or knowing violation of law.
(d) The operating agreement may specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts.
(e) The operating agreement may alter or eliminate the right to payment or reimbursement for a member or manager provided by Section 15-7 and may eliminate or limit a member or manager's liability to the limited liability company and members for money damages, except for:
(1) subject to subsections (c) and (d) of this Section, breach of the duties as required in subdivisions (1), (2), and (3) of subsection (b) of Section 15-3 and subsection (g) of Section 15-3;
(2) a financial benefit received by the member or manager to which the member or manager is not entitled;
(3) a breach of a duty under Section 25-35;
(4) intentional infliction of harm on the company or a member; or
(5) an intentional violation of criminal law.
(f) A limited liability company is bound by and may enforce the operating agreement, whether or not the company has itself manifested assent to the operating agreement.
(g) A person that becomes a member of a limited liability company is deemed to assent to the operating agreement.
(h) An operating agreement may be entered into before, after, or at the time of filing of articles of organization and, whether entered into before, after, or at the time of the filing, may be made effective as of the time of formation of the limited liability company or as of the time or date provided in the operating agreement.
(Source: P.A. 99-637, eff. 7-1-17; 100-561, eff. 7-1-18.)
What This Means: Key Takeaways*
An LLC operating agreement allows LLC members to create rules for how their unique LLC operates. These rules are often called “terms” or “provisions.”
Operating agreements are limited by state statute. For example, if the statute says LLC members can’t dissolve an LLC without all members agreeing, LLC members can’t change or override the statute with an operating agreement.
When an operating agreement is in place, it’s easier to navigate situations involving the operation of the LLC. And, if a lawsuit or dispute arises, LLC members (or the courts) have something to reference.
If a dispute arises that can’t be resolved by LLC members and there isn’t an operating agreement, the courts will use LLC statute to resolve disputes.
Creating an Operating Agreement
Some LLCs, such as professional LLCs or real estate LLCs, might need unique terms, while others might only need to cover standard provisions:
- Each member’s responsibilities
- How new members will be admitted
- How existing members may transfer or terminate their membership
- How profits and dividends will be distributed
- The process for amending the operating agreement
Use our free operating agreement template or learn more with our What Is an Operating Agreement guide.
Annual Report Requirements
Illinois LLC laws set out the requirements for annual LLC reporting. The State of Illinois has created the Secretary of State annual report online portal and PDF annual report form to simplify the process.
Illinois LLC Annual Report Statute
The following annual report statutes are from the Illinois Limited Liability Company Act:
Illinois LLC Act, Section 50-1. Annual reports.
(a) Each limited liability company organized under the laws of this State and each foreign limited liability company admitted to transact business in this State shall file, within the time prescribed by this Act, an annual report setting forth all of the following:
(1) The name of the limited liability company.
(2) The address, including street and number or rural route number, of its registered office in this State and the name of its registered agent at that address.
(3) The address, including street and number or rural route number of its principal place of business.
(4) The name and business address of all of the managers and any member having the authority of a manager.
(5) Additional information that may be necessary or appropriate in order to enable the Secretary of State to administer this Act and to verify the proper amount of fees payable by the limited liability company.
(6) The annual report shall be made on forms prescribed and furnished by the Secretary of State, and the information therein, required by paragraphs (1) through (4) of subsection (a), both inclusive, shall be given as of the date of execution of the annual report. The annual report shall be executed by a manager or, if none, a member designated by the members pursuant to limited liability company action properly taken under Section 15-1.
(b) The annual report, together with all fees and charges prescribed by this Act, shall be delivered to the Secretary of State within 60 days immediately preceding the first day of the anniversary month. Proof to the satisfaction of the Secretary of State that, before the first day of the anniversary month of the limited liability company, the report, together with all fees and charges as prescribed by this Act, was deposited in the United States mail in a sealed envelope, properly addressed, with postage prepaid, shall be deemed a compliance with this requirement. If the Secretary of State finds that the report conforms to the requirements of this Act, he or she shall file it. If the Secretary of State finds that it does not so conform, he or she shall promptly return it to the limited liability company for any necessary corrections, in which event the penalties prescribed for failure to file the report within the time provided shall not apply if the report is corrected to conform to the requirements of this Act and returned to the Secretary of State within 60 days of the original due date of the report.
(Source: P.A. 99-637, eff. 7-1-17.)
What This Means: Key Takeaways*
You can file your Illinois annual report online or by mail.
Your Illinois LLC annual report must state the following information (and must be current as of the date of filing):
- The name of the LLC
- The street address of the principal office and mailing address
- The name, title, and address of any manager or any member with the authority of a manager
- The registered agent’s street address or rural route number, and name
- Any additional information the state might need
If your registered agent changes on the annual report, you must still complete and submit a separate change of registered agent form.
Annual Report Due Dates:
- Due within 60 days after the first day of the LLC’s anniversary month
*This information is provided for educational and entertainment purposes only. Please consult a lawyer for legal advice.