Costs to Form an LLC in Illinois: True Illinois LLC Prices Revealed
The basic cost of starting a Limited Liability Company i(LLC) in Illinois is $150. When the LLC’s Articles of Organization are filed with the Illinois Secretary of State, this fee is paid.
- Forming an LLC in Illinois: Various Costs
- How to Form an Illinois LLC on Your Own?
- Crucial Steps to Take After Creating an Illinois LLC
- 1. Opening a Company Checking Account Entails the Following Measures
- 2. Obtaining a Credit Card for Your Business in Illinois
- 3. Using the Services of a Business Accountant
- 4. Get Commercial Insurance for Your Illinois LLC
- 5. Make a Website for Your Illinois-Based Company
- 6. Distribute a Press Release Within Illinois
- 7. Maintain Compliance in Your Organization
- FAQ: Forming an LLC in Illinois – Various Costs
- Get Professional Help in Forming an LLC in Illinois for The Best Price
Forming an LLC in Illinois: Various Costs
|Filing an Illinois LLC Online||$ 150|
|Filing an Annual Report||$ 75|
|Registered Agent||$ 39 / yr.|
|Forming a Foreign LLC||$ 150|
|Reservation of LLC Name||$ 25|
|Filling a DBA Name||$ 25|
|Certified Copies of Documents||$ 25|
|Good Standing Certificate||$ 25|
The $150 price to submit your LLC’s Articles of Organization online with the Illinois Secretary of State is the most expensive part of incorporating an LLC.
LLCs must file an annual report with the Secretary of State in Illinois.
This form can be submitted online through the Illinois Secretary of State’s website or by mail using Form LLC-50.1. The filing price is $75, with a $100 penalty if the application is not filed within 60 days of the deadline.
You may be your own registered agent in Illinois but hiring a registered agent service keeps your business compliant and informs you of critical filing dates so you don’t miss them. The first year of registered agent costs is $39.
If you currently have an LLC in another state and want to extend your business into Illinois, you’ll need to register it as a foreign LLC in Illinois. The cost of forming a foreign LLC in Illinois is $150.
Your business may require federal, state, and municipal permits/licenses to lawfully operate in Illinois, depending on your industry and geographic area. Whether you create an LLC or another sort of business structure, this is true.
Other LLC Filing Costs
There are additional costs involved with forming an LLC:
By submitting Form LLC 1.15 and paying the $25 filing fee, you can reserve your name for up to 90 days prior to the establishment of your LLC.
To create a name other than your legal LLC business name, file an Application to Adopt, Change, Cancel, or Renew an Assumed Name (Form LLC-1.20) and pay the $25 filing fee.
By paying $25 to the Secretary of State, you may get certified copies of your Illinois company paperwork.
An Illinois certificate of good standing can be obtained by contacting the Secretary of State and paying the $25 cost. Banks and lending institutions frequently demand a certificate of good standing.
How to Form an Illinois LLC on Your Own?
To incorporate an LLC in Illinois, you must file the Articles of Organization with the Illinois Secretary of State, which costs $150. You have the option of applying online or by mail. The Articles of Organization are the legal documents that establish your LLC in Illinois.
In Illinois, there are five basic steps to forming an LLC.
Step 1: Choose a name for your Illinois LLC (Price: $25-$50)
When naming your Illinois LLC, make sure it meets the following criteria:
- Is legal in the state of Illinois to utilize.
- Meets Illinois’ naming standards
- Is a web domain available?
The first and most significant step in forming an LLC in Illinois is deciding on a name. Make sure the name you chose conforms with Illinois LLC naming rules and can be readily found by prospective clients.
1. Follow these naming conventions:
- The word “limited liability corporation” or one of its acronyms must be in your name (LLC or L.L.C.).
- Your LLC’s name cannot contain words that may cause confusion with a government agency (FBI, Treasury, State Department, etc.).
- Restricted terms (e.g., bank, attorney, university) may necessitate additional documentation and the inclusion of a licensed professional in your LLC, such as a doctor or lawyer.
- Any other Illinois limited liability business, corporation, limited liability partnership, or limited partnership must have a name that is distinct from yours.
2. Research for Illinois Business Name
You can verify the availability of your selected organization name using the Illinois Business Name Search before completing your name reservation request. To get the most out of your search, exclude identifiers like “LLC” and type in the name you want to use. This will return any entities with the same or similar names.
If your business name is several words, you can even search just the first two words to ensure you pull up all possible similar names.
3. Domain Names That Are Available
Another factor to consider when choosing a business name is whether or not the web domain name you want is available. It’s critical to have a URL that matches your company name exactly. This apparently minor change may have a significant impact on how potential clients locate your company.
The simplest approach to find out if your chosen URL is accessible is to use your favorite domain registration, such as GoDaddy, to search for it online.
4. Reserve the name of your Illinois Corporate Entity.
All LLC name questions and requests are handled by Illinois’ Secretary of State. For up to 90 days, business names can be reserved.
You must submit an application by mail to reserve a company name. To avoid rejection, undertake a thorough search before submitting your application. You will have to pay a filing fee when reserving your name. Make checks payable to the “Secretary of State.”
File with the Illinois Secretary of State via mail.
Fee: $25 plus $50 for rush services (optional).
Department of Business Services
Limited Liability Division
501 S. Second St. Rm. 351
Springfield, IL 62756
Step 2: Choose a Registered Agent (Price: $0-120/year)
The principal point of contact for your LLC with the state is a registered agent. They are also in charge of accepting service of process in the event that your company is sued.
Your registered agent in Illinois must:
- Be at least 18 years old or elder
- Have a real address in Illinois
- Be ready to accept service of process during regular business hours.
For your LLC, you must choose an Illinois registered agent. In some states, registered agents are also known as resident agents or process servers.
What is the function of a registered agent?
A registered agent is an individual or corporate organization who accepts vital tax forms, legal papers, lawsuit notices, and official government correspondence on your behalf. Consider your registered agent to be your company’s point of contact with the government.
Who has the ability to be a registered agent?
A registered agent must be an Illinois resident or a corporation allowed to do business in Illinois, such as a registered agent service. You have the option of electing someone from your organization, including yourself.
Is it possible for me to act as my own registered agent in Illinois?
Yes. Your Illinois LLC’s registered agent might be you or anybody else in your organization.
Is it worthwhile to use a registered agent?
Using a professional registered agent firm to manage government files for your Illinois LLC is a cost-effective option for most businesses, with the benefits far outweighing the yearly fees.
Step 3: File the Articles of Organization (Price: $150)
To create an LLC, you must file Illinois Form LLC-5.5 — Articles of Organization with the Illinois Secretary of State. The cost of submitting the Articles of Organization online is $150.
State filing fees are $150 and must be paid to the Secretary of State (Nonrefundable).
Department of Business Services
Limited Liability Division
501 S. Second St., Rm. 351
Springfield, IL 62746
You’ll need to register a Foreign LLC if you want to expand your current LLC to the state of Illinois.
In Illinois, how long does it take to form an LLC?
The Articles of Organization can be filed online or by mail in 10 days, although they can be accelerated for a charge.
What is the difference between a local and a foreign Illinois LLC?
When an LLC does business in the state where it was founded, it is referred to as a “domestic LLC.” Normally, when we talk about an LLC, we’re talking about a domestic one. When an existing LLC wants to expand its operations to another state, it must incorporate a foreign LLC.
Step 4: Create an Operating Agreement (Price: $0)
Although an operating agreement is not necessary for Illinois LLCs, it is recommended.
What is an operating agreement?
An operating agreement is a legal document that spells out an LLC’s ownership and running processes.
Your operating agreement should include all of the items below, whether you’re creating a single-member or multi-member LLC. Some of these provisions will have little impact on the day-to-day operations of a single-member LLC, but they must be included for legal reasons.
- Organization: When the LLC was founded, who its members are, and how ownership is distributed are all things to consider. Multi-member LLCs might have an equal ownership structure or allocate different “units” of ownership to different members.
- Voting & Management: Whether the LLC will be run by its members or by a manager designated by them, and how members will vote on business concerns. Each member usually has one vote, but you could want to give certain members greater authority than others.
- Grants to Capital: The amount of money that each member has put into the company. This is also the time to plan how you can raise extra cash in the future.\
- Dividends: How will earnings and losses be distributed among members. The most popular method is to equitably divide earnings. If you want them distributed differently, your operating agreement should specify that.
- Membership Structure Varies: When a member quits the firm, how will duties and ownership be transferred. In the LLC’s governing document, it’s critical to spell out the procedure for buying out and/or replacing a member.
- Destruction: If all the members of your LLC agree that you no longer want to do business, you should dissolve the company. The procedure of hypothetically dissolving your company is a crucial part of your operating agreement.
What are the benefits of operating agreements?
A detailed operating agreement guarantees that all business owners are on the same page and eliminates the possibility of future disagreement.
You’ll need an operating agreement regardless of the sort of Illinois LLC you’re forming. This is why:
- The state has recommended it. Every Illinois LLC may create an operating agreement to control the company’s operational operations, according to Illinois Business Statutes Section 805 ILCS 180.
- It will keep your business partners from fighting. If you’re forming a multi-member LLC, having an operating agreement in place will help you avoid misunderstandings by defining each partner’s position and obligations.
- It aids in the preservation of your limited liability status. If you’re the only owner of a single-member LLC in Illinois, an operating agreement will assist guarantee that your limited liability status is sustained by court authorities, as well as contribute to your company’s overall credibility.
Step 5: Obtain an Employer Identification Number (Price: $0)
The Internal Revenue Service (IRS) issues an EIN, or Employer Identification Number, to identify a firm for tax reporting reasons. An EIN is a company’s version of a Social Security number (SSN).
An EIN is every so often stated as:
- Federal Employer Identification Number (FEIN)
- Federal Tax Identification Number (FTIN)
What is the purpose of having an EIN?
For the following, an EIN number is required:
- Opening a bank account for your business
- Managing and filing federal and state taxes
- Recruiting workers
What if my sole proprietorship already has an EIN?
When changing to an LLC, the IRS requires sole proprietorships to get a new EIN.
Where can I obtain an EIN?
The IRS will provide you with an EIN for free. Acquiring an EIN is a simple procedure that may be completed online or through the mail.
Option 1: The IRS will issue you an EIN upon requesting.
Option 2: Mail or fax an application for an EIN
Mail to: Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
If I don’t have a Social Security number, how can I acquire an EIN?
An EIN does not require a social security number. You may just leave section 7b blank on the IRS Form SS-4. Then, to finish your application, call the IRS at (267) 941-1099.
What is the optimum tax structure for my Illinois LLC?
When you apply for an EIN, you will be told of the many tax categorization options accessible to you. The default tax status is chosen by the majority of LLCs. However, by electing the S Corporation (S Corp) classification, some LLCs can minimize their federal tax liability.
Is an EIN required for my LLC?
An EIN is required for an LLC with workers or more than one member. The IRS requires you to do so.
Crucial Steps to Take After Creating an Illinois LLC
Keep your personal and business assets separate.
Your personal assets (your house, vehicle, and other possessions) are at stake if your Illinois LLC is sued. This is known as penetrating the corporate veil in business law.
In Illinois, you can begin safeguarding your LLC by following these steps:
1. Opening a Company Checking Account Entails the Following Measures
- Separates your personal assets from the assets of your firm, which is required for personal asset protection.
- It simplifies bookkeeping and tax reporting.
2. Obtaining a Credit Card for Your Business in Illinois
- For end-of-year tax purposes, it assists in categorizing and separating all business costs.
- Aids in the development of your business credit score, which is a necessary step in obtaining a line of credit or a business loan in the future.
- By distributing different cards (with varied budgets) to your staff, you can keep track of department costs.
3. Using the Services of a Business Accountant
- Prevents your company from paying too much in taxes while also avoiding penalties, fines, and other costly tax mistakes.
- Allows you to concentrate more time on your expanding business by simplifying bookkeeping and payroll.
- Improves the efficiency of your business finance by identifying areas of unexpected loss or profit.
4. Get Commercial Insurance for Your Illinois LLC
Business insurance allows you to focus on building your company while managing risks. The following are the most popular forms of company insurance:
- General Liability Insurance: It is a type of insurance that protects your company from litigation. General liability insurance is purchased by the majority of small enterprises.
- Professional Liability Insurance: Covers claims of malpractice and other business mistakes for professional service providers (consultants, accountants, and so on).
- Workers’ Compensation Insurance: A sort of insurance that covers employees for diseases, injuries, or fatalities caused by their jobs. Workers’ compensation insurance is required by law in Illinois for firms with one or more employees, including corporate officials and LLC members.
5. Make a Website for Your Illinois-Based Company
Having a website is an important step in establishing your company’s legitimacy. Every company needs a website. Even if you believe your company is too tiny or operates in an offline sector, if you don’t have a website, you’re missing out on a significant portion of prospective consumers and money.
Some people may believe that since they lack website-building skills, developing a company website is out of their grasp. While this may have been a valid concern in 2015, online technology has advanced significantly in recent years, making the lives of small company owners much easier.
The following are the key reasons why you should not put off developing your website:
- Websites are required for any reputable businesses. When it comes to getting your business online, it doesn’t matter what size or sector you’re in.
- Facebook pages and LinkedIn business profiles are not a substitute for a company website that you own and control.
- The GoDaddy Website Builder, for example, has made constructing a basic website quite straightforward. To build a website that you can be proud of, you don’t need to employ a web developer or designer.
6. Distribute a Press Release Within Illinois
Press releases are one of the simplest and most effective ways to advertise your company. They’re also one of the most cost-effective options because:
- It generates publicity.
- Create an online presence for your company.
- Improve your website’s search engine optimization (SEO) to attract more visitors.
- Are a one-time effort and financial investment
- Have long-term advantages
7. Maintain Compliance in Your Organization
Permits & Licenses for Illinois LLCs
Is it necessary for my Illinois LLC to obtain business licenses and permits?
You must follow federal, state, and local government requirements when operating your Illinois LLC. Restaurants, for example, are likely to require health licenses, construction permits, signage permissions, and other permits.
The specifics of business licenses and permits differ per state. Make sure you read everything thoroughly.
The cost of obtaining a business license or permit varies based on the type of license you need.
8. Filing Requirements for Illinois LLCs
You may be needed to register for one or more types of state taxes, depending on the nature of your business.
Sales Tax in Illinois
If you’re selling a tangible item, you’ll most likely need to apply for a seller’s permit on the MyTax Illinois website.
A firm can use this certificate to collect sales tax on taxable transactions.
State, county, and municipal governments levy sales taxes on commercial transactions involving the exchange of specified taxable products or services.
Employer’s Taxes in Illinois
If you have employees in Illinois, you must register on their behalf for Unemployment Insurance Tax and Employee Withholding Tax. Both of these taxes can be paid using the MyTax Illinois site.
Tax Requirements in Federal Illinois LLC
The IRS will require most LLCs to disclose their revenue each year using the following format:
- Partnership Return (Form 1065) (most multi-member LLCs use this form)
- Schedule C of Form 1040 (most single-member LLCs use this form)
Your federal taxes will be influenced by how you pay yourself as a business owner.
9. File an Annual Report of Your Illinois LLC
LLCs must file an annual report with the Secretary of State in Illinois. This can be done in person, via mail, or online.
OPTION 1: Through the Secretary of State, File it Online
OPTION 2: File by Mail or In-Person
Fee: $150 Online, $75 By Mail (Nonrefundable)
Department of Business Services
Limited Liability Division
501 S. Second St., Rm. 351
Springfield, IL 62756
Due Date: Due on the first day of the month in which the LLC was created each year. Reports can be submitted up to 60 days before the deadline date.
Late Filings: Illinois has a $75 mail-in late fee and a $125 online late cost. In addition, LLCs who fail to file an annual report will be disbanded after 180 days.
10. Automatic Dissolution Should Be Avoided
Missing one or more state filings can result in fines and possibly immediate dissolution for Illinois LLCs. LLC owners risk losing their limited liability protection if this happens. By warning you of approaching filing deadlines and submitting reports on your behalf, a good registered agent service can help you avoid this consequence.
11. Employee Recruitment in Illinois
If you intend to recruit staff for your Illinois LLC, follow these measures to stay in compliance with the law:
- Verify that new hires are eligible to work in the United States.
- Employees should be reported to the state as “new hires.”
- Employees should be covered by workers’ compensation insurance.
- Withhold taxes from employees
- Print workplace compliance posters and install them in prominent locations across your office.
What is the Illinois minimum wage?
The state of Illinois’ minimum wage is $12.00 per hour. The minimum wage in Cook County is $13.00 per hour, whereas in Chicago, the minimum wage is $14 per hour for firms with four to twenty employees and $15 per hour for enterprises with more than twenty employees.
In Illinois, how often do I have to pay my employees?
Except for salaries of executive, administrative, and professional workers, as defined in the Federal Fair Labor Standards Act of 1939, which may be paid once a month under Illinois’ Employment Statutes, Illinois requires wages to be paid at least twice a month.
FAQ: Forming an LLC in Illinois – Various Costs
Is it necessary to pay an annual fee for an Illinois LLC?
Yes, you must pay a $75 annual report fee for your Illinois LLC each year; for more information, see our Illinois Annual Report guide.
Is it really required to form an LLC?
Limited liability protection is provided by an LLC. In the case of a business failure, such as a lawsuit or unpaid debt, an LLC protects your personal assets.
What is the most cost-effective approach to form an LLC?
By completing the formation procedure yourself, creating your own operating agreement, acting as your own registered agent, and obtaining your own EIN, you may save money on an LLC.
Is an S corporation preferable to a limited liability company (LLC)?
An S corporation (S Corp) is a tax status administered by the Internal Revenue Service, not a form of a commercial entity. An LLC can be taxed either as a regular corporation or as an S corporation. Being taxed as an S corporation might make a lot of sense for some firms.
Which is preferable: a single proprietorship or an LLC?
Because sole proprietorships do not provide any liability protection, they are only suitable for enterprises with a very low risk of liability.
Get Professional Help in Forming an LLC in Illinois for The Best Price
It can be difficult and time-consuming to form an Illinois LLC. It might be beneficial to have some assistance, and we’ve compiled a list of two of the top LLC creation services available.
#1 – ZenBusiness can help you form an LLC in Illinois
ZenBusiness provides LLC creation services at a low cost and with a number of useful features. Most LLCs will benefit from two of these aspects in particular. All of ZenBusiness’s products include a year of complimentary registered agent service. With their Pro and Premium Packages, they offer ensure worry-free compliance. ZenBusiness will file your yearly report and notify you if there is anything further you need to do to be in compliance with the state under this assurance. For $119 per year, those with the basic package can purchase worry-free compliance.
ZenBusiness will help you form an LLC in Illinois for $150. They have a customer satisfaction rating of 98 percent and over 4500 verified reviews.
$0 + State Fees
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With decades of expertise, Northwest Registered Agent is an exceptional LLC creation service. They deliver excellent, well-informed customer service. Their biggest benefit, though, is the seclusion they provide. They don’t outsource any of their services to third parties, don’t sell your information, and even build their own code.
Northwest can help you form an LLC in Illinois right now. They have a customer satisfaction rating of 98 percent and over 4150 verified reviews. They’ll come with a complimentary year of registered agent service!
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In the event of a lawsuit or business collapse, forming an Illinois LLC is a fantastic method to safeguard your personal assets. Fortunately, Illinois makes forming an LLC simple and offers a favorable business climate. If you want to create an Illinois LLC, simply follow the instructions above and you’ll be up and running in no time.
Alternatively, you may hire one of the professional services listed above to get everything taken care of for you.