Procedures to Form Illinois LLC

Procedures to Form Illinois LLC:

An Illinois LLC is a legal business structure that protects your assets (like your home, car, and bank account) in case your company gets attacked.

An LLC can be used to run a business or hold your assets, like real estate, cars, boats, and planes.

A. Illinois LLC Name

The first step in making your own Illinois LLC is to make sure that the name you want is unique and available.

Illinois law (805 ILCS 180/1-10) says that the name of your LLC must be “distinguishable upon the record.” This means that it must be different from the other companies already listed in Illinois.

The name of your LLC must end with the right “designator.” The following names are allowed by Illinois law:

LLC (most popular)

B. Illinois Registered Agent

Under Illinois law (805 ILCS 180/1-35), all LLCs must name an Illinois Registered Agent on their Articles of Organization, which is the form they use to file with the state.

A Registered Agent can be a person or a company. This person or company gets legal papers, notices, and mail on behalf of your LLC. This is called the Service of Process.

Your Illinois Registered Agent must have a street address, not a PO box. Also, the Registered Agent must live in Illinois if he or she is a person. Your LLC must always have a Registered Agent to stay in good standing with the state. The Registered Agent should be available during normal work hours.

The following can be the Registered Agent for your LLC:

* You

* A friend or relative

* A Business Registered Agent

C. Statements of Purpose

When you file the Illinois Articles of Organization with the Secretary of State, your LLC is officially made.

Filing methods: In Illinois, you can start an LLC by mail or online. If you send in your taxes by mail, you’ll have to fill out the Illinois Articles of Organization (Form LLC-5.5) and send it to the Secretary of State. If you file online, you will send the Secretary of State an electronic copy of the Articles of Organization.

File your mail: The Articles of Organization (Form LLC-5.5) can be downloaded.

Online filing: LLC Online Articles of Organization

Illinois filing fee for an LLC: In Illinois, it costs $150 to start an LLC., whether you file by mail or online.

Payment methods: If you send in your tax return by mail, the state doesn’t take personal checks. You must use a money order or a cheque that is made out to the “Secretary of State of Illinois.” If you file online, you can use a bank card or credit card to pay.

When your Illinois LLC is approved: If you file online, it will be approved in 5–10 business days. If you pay $100 extra for an “expedited filing,” it will be approved in 1–2 business days. If you send in your application by mail, it will be approved in 7–14 business days (plus the time it takes to get there).

Recommendation: We think you should file online because it’s easier.

Secretary of State, Limited Liability Division, Department of Business Services

501 S. 2nd Street, Room 351, Springfield, IL 62756

What it gives you back: Once your LLC is accepted by the Illinois Secretary of State, you’ll get a stamped copy of your Articles of Organization and a Welcome Letter. In your Welcome Letter, you will find your LLC’s Entity File Number. This is a unique number that the Illinois Secretary of State uses to identify your business.

If you file by mail, these papers will be sent back to you by mail. If you file online, these papers will be sent back to you by email.

D. LLC Operating Agreement

In an Illinois LLC Operating Agreement, the rules for how the members of the LLC work together are written down. This includes but is not limited to, what each member’s rights and responsibilities are, how earnings and losses are split, and how taxes are paid.

In the Operating Agreement, you’ll list all of your LLC’s members (owners) and how much of the LLC each person owns. Even if you are the only member of the LLC (called a “Single-member LLC”), you should still keep an Operating Agreement.

There is no need to send the Operating Agreement to the Illinois Secretary of State or to any other state office. Just keep a copy of the other business records for your LLC.

If you end up in court, having an Operating Agreement will show that your business is being run correctly. This keeps your personal belongings safe and secure.

E. Federal Tax ID Number (EIN)

An Employer Identification Number, or EIN, is another name for a Federal Tax ID Number. FEIN, Federal Tax Number, and Federal Employer Number are all different names for the same thing.

After your LLC has been accepted, you should apply to the IRS for an Illinois EIN Number. Do not apply for your EIN until the Illinois Secretary of State gives you permission.

The EIN is given to different businesses by the Internal Revenue Service (IRS). It’s like a social security number for your business. It’s used to identify your business. It is used to file taxes and, if you have workers, pay them.

To open a business checking account for an LLC, you also need an EIN.

An EIN costs nothing: That’s right. The IRS gives out EINs for free.

Getting an EIN: You can get an EIN for your LLC in 3 ways.

By mail (approval takes four weeks)

by fax (approval takes four business days)

online (approval is quick at the end of the application).

Use Form SS-4 if you want to apply by mail or fax. The Internal Revenue Service’s shipping address is Attn: EIN Operation, Cincinnati, OH 45999, and the fax number is 855-641-6935.

Online application: This is the most popular (and fastest) way to apply for an EIN, but it can only be done if the “responsible party” has a social security number and if the LLC is owned by people and not by another company (see below).

No SSN and not a US citizen or resident: Even if you are not a US citizen, don’t live in the US, or don’t have a social security number, you can still get an EIN from the IRS. You just can’t use the online application to get the EIN. You’ll need to send Form SS-4 to the IRS by mail or fax instead. On line 7b, where it asks for your SSN, write “Foreign” instead.

F. Illinois LLC Annual Report

Each year, every LLC in Illinois has to file an Illinois LLC Annual Report. This rule applies to all LLCs in Illinois, even if your business did nothing or made no money during the year.

Starting before the first day of the LLC’s birth month, the year after it was formed, the Annual Report is due.

For example:

if your Illinois LLC was formed on November 15, 2023, your first Annual Report is due by November 1, 2024.

If your Illinois LLC was formed on January 20, 2025, your first Annual Report is due by January 1, 2026.

Illinois Fee for the Annual Report: The fee for filing an Annual Report is $75, whether you do it by mail or online.

Mail in Annual Report. Get Form LLC-50.1 here.

Send mail to: Secretary of State, Department of Business Services, Limited Liability Division, 501 S. 2nd Street, Room 351 Springfield, IL 62756

Penalty: if late or not filed: If you are 60 days late, you have to pay $100. If you are more than 180 days late, the state will end your LLC through administrative action. Note: The fine used to be $300, but as of January 1, 2019, House Bill 4578 cut it down to $100.

Reminders: About 45 days before the due date, reminders are sent to your LLC’s Registered Agent.

G. Licenses or permits for running a business

Check to see if your LLC in Illinois needs a business license or a permit. This varies on where the business is located and what kind of business it is. You can call the government agency that oversees your business’s industry or the city, town, or county where it is located to find out what licenses and/or permits your LLC will need.

H. Taxes:

Every company’s Illinois LLC Taxes are different, but we can give you an idea of what you need to do

Federal taxes: Since “pass through taxation” applies to your Illinois LLC, all of its profits and losses will be mentioned on a Schedule C and sent to the IRS with your personal income tax return (Form 1040).

Illinois Local and State taxes: You must register your LLC with both the Illinois Department of Revenue (IDOR) and the local tax officials in the town, city, or county where it is located.

I. Bank Account for LLC

Keep your liability insurance up to date: Set up a different bank checking account for your Illinois LLC to keep your personal finances separate from your business finances.

Things you need to start an account: Bring your signed Articles of Organization, your EIN Confirmation from the IRS, and your driver’s license or passport. Also, banks may need extra things, so make sure to call them ahead of time.

Benefits: Having a separate checking account will keep your personal and work money from getting mixed up or “mingling.” It will also make it much easier to keep track of the assets of your LLC.

Know what you can do: Call a few Illinois banks and compare what they have to offer. Some banks charges you an extra monthly fee to keep a checking account for your LLC, while others won’t.

When you open the account, the bank will give you a debit card.

You can also get a credit card for your business to earn points, miles, and other benefits.

J. Business Phone Number

You can buy a cheap “virtual business number” for your Illinois LLC instead of using your home phone number or your cell phone. This virtual business phone can be set up to forward to your cell phone, use voice prompts, or be set up in any way you want.