Illinois ranks near the top third of best states to start a business and ranks very high for categories like access to capital, low cost of living, and affordable cost of doing business. If you are looking to start an LLC in Illinois, this guide will walk you through the step-by-step process to help get your business up and running in no time.
What are the benefits of an LLC?
- LLCs provide liability protection for business owners, meaning that the owners’ assets will not be at risk.
- Easy to set up and manage
- One person may form an LLC
When do you need to form an LLC?
If you are exploring starting a business or perhaps you are already in business as a sole proprietor it is a good idea to form an LLC. If you are operating a business without an LLC you could be placing yourself and your personal assets at risk.
While it is not required to form an LLC before starting a business the benefits include accounting and tax standardization, limited liability risk right away, and it will be easier to stay organized since all of your business-related expenses will be tied to one business bank account.
Step 1: Choose your company name
The first step in starting an LLC is to select a business name. It is essential to choose a business name that is unique from existing entities.
Perform an Illinois business name search
The Illinois Secretary of State maintains a database of business entities registered in Illinois that is free for the public to search.
Your Illinois LLC must contain “Limited Liability Company” or include the abbreviation LLC or LLC. Prefixes, suffixes, and plural versions of an existing entity name do not make it unique.
For instance, if you wanted to start a breakfast restaurant called Pancake Cafe LLC you would want to make sure there wasn’t a similar sounding name like Pancakehouse Breakfast Cafe etc. The intent with naming rules is to create a clearly distinguishable name that avoids confusion for the public so if you find a name that is somewhat similar to the one you are considering it is probably best to move on to another name idea.
If you are struggling to develop an Illinois LLC name, one option is to use a business name generator, which can help come up with hundreds of name suggestions in seconds.
Perform a trademark search
If you intend on using your business for a commercial purpose you will want to perform a trademark search before selecting your Illinois business name. A trademark will help protect against infringement of unauthorized use of your business name and logo without your permission and can eventually become a valuable asset if your business grows.
Avoid using a trademarked or similar name to an existing business to protect yourself.
Find out if your proposed business name is available by conducting a trademark search online at the US Patent & Trademark Office.
Determine if you want to use a DBA name
A DBA is a registered “Doing Business As” name and can be used instead of the legal LLC business entity name.
A DBA allows you to have a name for your business that reflects what it does or who its customers are. Business owners use their company’s DBA names on checks, orders, contracts, and correspondence when doing business.
Some of the main benefits of a DBA:
- Flexibility: If you have your LLC established, you can use DBA names instead of creating separate entities for each new venture.
- Branding: A DBA name is easier to brand and identify for customers.
- Expansion: It is easy to file DBAs in different geographical locations to target other customers and appear hyper-focused in your marketing.
You do not need to operate under a DBA if you use your Illinois business name for all business purposes. However, using a DBA name will not affect your Illinois LLC name registration.
Register the domain name
Once you decide on a business name, check to ensure that the domain name is available. can show you which domain extensions are available for your business name.
Although .com domain names are ideal, extensions like .net, .co, and .biz are becoming more commonplace
Register social media profiles
It is vital to have a solid social media presence in today’s business environment. So be sure to register for your business name on the different social media platforms ahead of time so that no one can sign up for them.
Step 2: Register Illinois LLC
After choosing a name, start the registration process online at the Illinois Secretary of State website.
Registering your LLC in Illinois is a relatively straightforward and quick process.
Select a registered agent
A registered agent is required for an Illinois LLC and is an individual point of contact for Illinois designated to receive official correspondence from the Illinois Secretary of State. If you work from home a registered agent can help prevent your home address from being solicited by business mail since the registered agent’s address will serve as the official address for the business.
If you are not going to be your Illinois LLC’s registered agent, find a substitute Illinois resident or company to serve in this role. Be sure that the registered agent’s address is included in all your business documents and correspondence if you intend to use a different registered office.
What are Illinois registered agent requirements?
An Illinois registered agent:
- must be over the age of 18
- have a physical street address in Illinois
- be available during regular business hours
How to register
Once you choose a registered agent and perform an Illinois business search, the next step is to fill out the Illinois Articles of Organization.
The form can be filled out online and requires the following information:
- Name of corporation
- Registered agent
The Illinois Secretary of State has done a great job revamping its website to make online filing as easy as possible. If you want to drop off or mail the articles of incorporation forms you can do so to the following address:
Illinois Office of the Secretary of State
213 State Capital
Springfield, IL 62756
Our picks of the best registered agent services
Step 3: Next steps after filing Illinois LLC
Apply for an EIN
The IRS requires each LLC to have its own unique employer identification number. The Internal Revenue Service website can generate a federal tax identification number. An EIN makes it easy to file your business taxes and stay in compliance with the IRS and is similar to a Social Security number for your business.
EIN’s also add credibility to your business and are required for compliance purposes from time to time by companies that have to pay you for goods and services. An EIN is also required to open a business bank account and will help you establish business credit in the event you need to take out a business loan.
Start a business bank account
A business bank account is required for LLCs to start conducting business. Therefore, it is highly recommended that you start a low-risk bank account to start receiving income and paying any start-up expenses.
After the LLC has been established, your business bank account will be used for payroll, payment of bills, a deposit of earnings from your business, and any other financial transactions your business may have.
Back office tasks such as bookkeeping can also be performed on your start-up bank account to keep start-up costs low.
Apply for a business license and permits
If you are planning on selling goods or services in Illinois, you will want to look into whether or not the city or industry requires a particular business license.
The best way to get more information on the different license requirements throughout the state is to visit Illinois.gov.
Prepare an LLC operating agreement
An operating agreement is a contract between the LLC owners that lays out the financial and functional decisions of managing an Illinois LLC. An operating agreement is needed if there are multiple business owners of an Illinois LLC.
An operating agreement can be as simple or in-depth as desired, but it is important to have one in writing before starting any significant operations within the business.
File annual report
Illinois corporations must file an annual report l to stay in good standing with the Secretary of State. An Illinois annual report is not a financial statement and the main intention behind Annual Reports is to help keep track of active businesses in Illinois and ensure that the state has the most up-to-date contact information for businesses on file with the Secretary of State office.
How much does it cost to file an Illinois LLC?
The Illinois filing fee for a Domestic LLC in Illinois is $150. You can get a complete list of fees for all business forms by visiting the fees page on Illinois.gov.
Recommended LLC formation services
- Northwest Registered Agent: Started as a registered agent service but expanded into business formations and offered additional professional services like mail forwarding and virtual business address services.
- ZenBusiness: Another recommended online business formation platform that can help set up an LLC in Arizona. They offer a full suite of services for new business owners, including operating agreements, business websites, domain names, and more.
- Incfile: A top online incorporation service provider in the market that offers various business filing services like LLC formation, Registered Agent, State Filings, and Compliance Filings.
Illinois LLC FAQs
Is Illinois a business-friendly state?
Illinois is the 6th largest state by population in the United States and there are different types of business climates depending on the cities that you start a business in. In Chicago, there will be a slightly higher regulatory and tax environment than you will experience in other parts of the state.
What industry in Illinois is a good one to start a business?
Illinois has dense farmland throughout the state and produces a variety of commodities and beef that is distributed throughout the country. A food service delivery business could be a good idea in a state like Illinois due to the proximity to the food sources which should help provide decent margins compared to if you lived in other states.
Do I need a license for an LLC in Illinois?
There is no generic business license outside of your LLC registration, but specific licensing requirements exist in certain cities and industries.Illinois.gov is a great resource for information on which industries require them.
Does Illinois have an annual LLC fee?
Yes, there are annual reports that active LLCs must file with the Secretary of State to stay in good standing. The cost to file an annual report is $75 for LLCs.
How do you look up who owns an Illinois LLC?
The best way to look up who owns an Illinois LLC is to perform an Illinois business search through the Illinois Department of State. Searching is free for the public, and the database maintains a list of corporations that have registered their business with the state.
What is an Illinois Certificate of Good standing?
An Illinois certificate of good standing indicates that a business is in good standing with the state and has paid all applicable business fees to perform business within the state. Companies can get their certificate of good standing by visiting the Illinois Secretary of State website.
How do you terminate an Illinois LLC?
You can dissolve an Illinois LLC by filling out an Articles of Dissolution form and filing it with the Illinois Secretary of State. If you don’t plan on being in business, terminating your business is a good idea, so you won’t be responsible for biennial business filing fees.
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