Illinois LLC Costs
A limited liability company (LLC) provides business owners with liability protection, specific tax advantages, and a versatile management structure. A misconception about forming a limited liability company is that it is a time-consuming and expensive process in Illinois. But, it is actually a straightforward process that is cost-effective in the long run.
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Costs to start an LLC in Illinois
Articles of Organization fee ($150)
- You will file the Articles of Organization with the Illinois Secretary of State.
- The Illinois filing fee for your Articles of Organization is $150.
- Illinois does offer expedited services for an additional $100.
Illinois annual report fee ($75)
- Your Illinois LLC will have to file an annual report with the Secretary of State.
- You can use the Illinois Secretary of State’s website or complete and submit Form LLC-50 by mail.
- The Illinois filing fee is $75. There is an additional fee of $100 for failure to file within 60 days of its due date.
- You must pay the $75 annually within 60 days of its anniversary month.
Illinois registered agent fee (varies between $50 to $300)
- In Illinois, you can act as your own registered agent. But, it is recommended that you use an experienced registered agent service to avoid late fees and missed deadlines.
- A registered agent service keeps up with documents and legal papers for you – subpoenas, tax notices, and all correspondence.
- The cost of a registered agent varies depending on what service you choose, your business needs, and Illinois state fees.
Fees to form a foreign LLC in Illinois ($150)
- You must register your LLC as a foreign LLC if you have an existing LLC registered in another state.
- The fee for registering a limited liability company as an Illinois foreign LLC is $150.
- You must complete and submit the Application for Admission to Transact Business to the Illinois Secretary of State.
LLC name reservation fee ($25)
- You can reserve the LLC name up to 90 days before LLC formation.
- You will complete and submit the Application to Reserve a Name with the $25 filing fee.
DBA filing fees in Illinois ($25)
- The business term DBA is an abbreviation for ’doing business as.’ A DBA is any registered name a person or company uses to conduct business that is not the legal name.
- You will complete and submit the Application to Adopt, Change, Cancel or Renew an Assumed Name with the $25 DBA filing fee.
Cost of certified document copies ($25)
- You must complete the Illinois LLC Request Form for Certificates of Good Standing and/or Certified Copies of Documents and submit it to the Secretary of State.
- The cost of certified copies of your Illinois business documents is $25.
Certificate of Good Standing ($25)
- Some banks and banking institutions require that you obtain an Illinois Certificate of Good Standing.
- You can order the Certificate of Good Standing online with Cyberdrive Illinois. There is a $25 fee.
Steps to start an LLC in Illinois
Choose a business name in Illinois
When you choose an Illinois LLC name, you need to consider a few things.
- It must be available for use in the state of Illinois.
- It must meet the state LLC name requirements and restrictions. Find a complete list of LLC name restrictions here.
- It is a good idea to check for web domain availability.
You will use the Illinois Secretary of State Corporation/LLC Search and check for LLC name availability.
LLC name reservation fee in Illinois
You can reserve the LLC name up to 90 days before LLC formation.
You will complete and submit the Application to Reserve a Name to the Illinois Secretary of State.
The cost to reserve an Illinois LLC name for up to 90 days is $25, and name reservation is not mandatory.
Appoint an Illinois registered agent
Illinois requires you to choose an Illinois registered agent when forming an LLC in the state.
The cost for a registered agent in Illinois varies between $50 to $300 per year depending on your Illinois LLC needs.
A registered agent in Illinois is an individual or business entity that receives tax forms, legal documents, lawsuit notices, service of process, and other official government communications on behalf of a sole proprietorship, limited partnership, corporation, or LLC.
The registered agent you choose must be an Illinois resident or a registered agent service authorized to conduct business in the state.
- Starter Plan – $39 a year plus State Fees
- Pro Plan – $149 a year plus State Fees
- Premium Plan – $249 a year plus State Fees
ZenBusiness offers a stand-along registered agent service. The price is $99 per year.
- Total Out The Door Illinois LLC Formation Package – $50 a month and includes:
- Illinois State Fee
- Filing Service Fee
- Registered Agent
- Tax ID
- Annual Plan – $225 plus State Fees a year
- Economy – $79 plus $153 Illinois filing fees
- Standard – $329 plus $153 Illinois filing fees
- Express Gold – $349 plus $255 Illinois filing fees
File your Illinois Articles of Organization
You must file your LLC’s Articles of Organization with the Illinois Secretary of State.
You will file online with the Cyberdrive Illinois website.
Or, you can complete Form LLC-5.5 and submit it by mail.
Illinois Secretary of State – Department of Business Services address:
Jesse White Building
213 State Capitol
Springfield, IL 62756
The form will ask for specific information about your LLC.
- LLC name
- Address of principal place of business
- Registered agent information
- The purpose(s) why the Limited Liability Company is organized.
Filing your Illinois LLC’s Articles of Organization costs $150.
Get an Illinois LLC EIN
An Employer Identification Number, or EIN, can also be referred to as a Federal Employer Identification Number (FEIN) or Federal Tax ID Number (FTIN).
It is a nine-digit number the Internal Revenue Service (IRS) gives for free. It helps identify companies for income tax purposes and acts as a Social Security number for a company.
The Internal Revenue Service mandates that you obtain an EIN for your Illinois business if you convert a sole proprietorship into an LLC.
The process is simple and can be done online using the IRS website.
Business banking for an Illinois LLC
Regardless of business structure, keep your personal and business bank accounts separate to protect your assets and credit scores.
You will need a copy of your Articles of Organization, operating agreement, and the LLC’s EIN to open a new business bank account in Illinois.
A business banking account is usually free and does not come with any extra cost or fee.
Business attorney fees in Illinois
Many LLCs opt to hire a business attorney to handle the business formation process and any other business-related issue that might come up.
But, most attorneys do offer free consultations for first-time clients.
Professional services such as LegalZoom and Rocket Lawyer offer LLC formation packages that include comprehensive legal services.
On average, a professional business lawyer will cost $300 per hour.
LLC taxes in Illinois
LLCs are pass-through entities. It means that the LLC members must file their personal taxes rather than the LLC state filing a tax return with the Illinois Department of Revenue.
- You must pay Personal Property Tax which is 1.5% of your overall income. Your LLC may have additional business taxes depending on business type, location of the company, etc.
- Illinois does not have a Franchise Tax for LLCs.
- An LLC will also have various taxes, such as incoming withholding tax. Illinois requires that you pay sales tax in the state for companies that sell goods.
- You will submit a sales tax return to the Illinois Department of Revenue every year to Illinois. You will want to consult a business attorney or tax consultant to avoid penalties or missing vital deadlines.
- State tax and federal taxes are complicated and might be worth the hourly consultation fee.
Business licenses and permits in Illinois
Permits and business licenses will depend on the location and type of business you own.
You will also need to contact the Illinois Department of Revenue (IDOR) and obtain your state registration/or license. For example, if you open a winery in Illinois, you must obtain a Liquor Manufacturing License.
The average cost for a business license is $250 in Illinois.
Every Illinois city or county has different mandates and rules when it comes to licenses and permits. You will need to check with local government offices to inquire about the process and price.
You may find that a document or form requires a notarization by a notary public.
If you cannot find a notary public, most government offices have one on staff.
Per Illinois law, a notary public can charge between $5 to $25 dollars per notarial act up to $75.
Employer obligations in Illinois
If you have employees in Illinois, you have additional obligations to meet.
- Within 20 days of hiring or rehiring, you must report the employees to the Illinois Department of Employment Security.
- You must purchase worker’s compensation insurance when you hire your first employee.
- In Illinois, you must pay unemployment taxes once you’ve paid $1500 in wages or the employee has worked more than 20 weeks that year.
Benefits of an Illinois LLC
- Forming an LLC in Illinois simplifies business banking. Most banks require that you open a business account separate from your personal banking account. You are reducing your personal liability for business debts and potential lawsuits.
- Compliance requirements for LLCs are different for corporations. Corporations have shareholders and stock owners to answer to.
- LLC formation means that you are not subject to double taxation. Certain business entities such as C-corporations are double taxed.
- You can choose to be taxed as a pass-through entity. Forming an LLC in Illinois ensures that business earnings are taxed once on the members’ personal tax returns.
- An LLC has a lower personal property replacement tax (PPRT). The Illinois state tax is based on your business’s net income.
How long does it take to register an LLC in Illinois?
In Illinois, it takes approximately 3 to 4 weeks to have an LLC approved if you file it by mail. It includes 10 to 15 business days of processing time and the time it takes to return the documents.
Online LLC registration takes 7 to 10 business days. The state does offer expedited same-day services for additional fees.
Why should I form an LLC in Illinois?
LLC formation is a good idea for any business owner in Illinois. It limits personal liability in lawsuits and business debts.
Forming an Illinois Limited Liability Company also provides you with flexibility in management, taxation, and ownership.
Do I need a business operating agreement for my LLC in Illinois?
Illinois does not require LLCs to obtain an LLC operating agreement.
But, many companies choose to get one because it prevents future misunderstandings between managerial and financial.
Is an LLC worth it for a small business?
Small businesses, startups, and entrepreneurs benefit from LLC formation in Illinois. It lends business credibility and allows you the ability to protect your personal assets while accessing tax breaks.
You can form a single-member LLC. It also helps you add co-owners down the road.
Can I take money out of my LLC in Illinois?
If you are a single-member LLC, you do not get a salary or paid wages. In fact, you will pay yourself from the Illinois LLC’s profits, which is called an owner’s draw.
It is perfectly legal in Illinois to write yourself a check in order to transfer the funds from your LLCs bank account into your personal one.
Are husband and wife considered single-member LLC in Illinois?
You and your spouse are considered a single owner if you are married. It means you are treated as a single-member limited liability company (SMLLC) and considered community property.
What is the minimum number of members for an Illinois LLC?
Illinois is pretty straightforward and only requires one or more people to form an LLC.
A multi-member LLC has two or more owners and will allocate profits and losses among themselves.
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