How to Start Your Own LLC in Illinois

In this guide, you'll learn how to properly name your LLC, file Articles of Organization, choose a registered agent, obtain licenses, understand taxes, and stay compliant with annual requirements. By the end, you'll have a clear, step-by-step roadmap to confidently start and manage your Illinois LLC.

1. Name Your Illinois LLC

Choosing the right name for your LLC is one of the most important early steps because it becomes your brand identity and legal business name. A strong LLC name should be unique, easy to remember, and clearly reflect what your business does.

Before settling on a name, take time to clarify your business concept. Knowing your industry, target audience, and long-term goals will make naming easier. Many business owners brainstorm with friends or colleagues they trust, while others use online business name generators to spark ideas. These tools can help, but they shouldn't replace thoughtful decision-making, as they may miss industry nuances or branding concerns.

Once you have a shortlist of names, conduct a business name search through the Illinois Secretary of State's website. This step ensures that your desired name is not already in use or too similar to an existing business. You should also run a general internet search and check domain availability to avoid confusion with other companies.

Illinois has specific LLC naming rules. Your LLC name must include "Limited Liability Company" or an abbreviation such as LLC or L.L.C. The name cannot include language that suggests your business is a government agency. Additionally, your name must be distinguishable from all other business names registered in Illinois and cannot include restricted words like bank, insurance, or university without special state approval. The name also cannot imply that the LLC is a corporation or partnership.

After confirming availability at the state level, it's wise to check the U.S. Patent and Trademark Office (USPTO) database to ensure the name is not federally trademarked. This helps protect your brand and prevents legal issues later.

Reserving Your Illinois LLC Name

If you're not ready to file your LLC immediately, Illinois allows you to reserve a business name. Name reservations must be filed by mail only—online filing is not available. You'll need to download the name reservation form from the Illinois Secretary of State website, complete it with your proposed business name and contact information, and mail it with a $25 fee to:

Secretary of State
Department of Business Services
Limited Liability Division
501 S. Second St., Room 351
Springfield, IL 62756

Once approved, the name is reserved for 90 days, giving you time to complete the rest of the formation process.

Doing Business As (DBA) in Illinois

Sometimes, an LLC needs to operate under a name different from its legal name. This is where a DBA, known in Illinois as an assumed name, becomes useful. For example, if your LLC is called JJ's Waffles, LLC and you want to sell baked goods under JJ's Muffins, you can register that name as an assumed name. An LLC can hold multiple DBAs, all operating under the same legal entity.

Registering an assumed name allows you to open bank accounts, accept payments, and market your business using the DBA. In Illinois, assumed names are filed with the Secretary of State, and you'll need your LLC's file number to complete the application.

Assumed name rights last until the first day of the LLC's anniversary month in the next calendar year divisible by five. After that, they are renewed in five-year increments. Fees vary depending on the year and range from $30 to $150, with additional payment processor fees. Illinois offers both standard and expedited processing, with expedited requests reviewed within 24 hours.

2. Select a Registered Agent

Every Illinois LLC must appoint a registered agent. The registered agent is responsible for receiving official documents such as legal notices, state correspondence, and tax forms on behalf of your business. This ensures that your LLC never misses important deadlines or legal communications.

In Illinois, a registered agent can be an individual or a business entity, including the LLC owner. However, the agent must meet certain requirements. They must be at least 18 years old, maintain a physical street address in Illinois (P.O. Boxes are not allowed), and be available during normal business hours. If the agent is a business, it must be authorized to operate in Illinois.

Many LLC owners choose to hire a professional registered agent service. While this adds a small annual cost, it provides privacy, reliability, and flexibility—especially for business owners who work remotely, travel often, or don't want their personal address on public records.

3. Determine Your Management Structure

Illinois LLCs can be either member-managed or manager-managed. In a member-managed LLC, all members participate in the daily operations and decision-making of the business. This structure works best for small businesses where owners are actively involved.

In a manager-managed LLC, one or more managers handle operations, while other members act as passive investors. A member may serve as a manager, but at least one manager must be a non-member. This structure is ideal for LLCs with multiple owners who prefer not to manage day-to-day activities.

If you do not specify a management structure in your Articles of Organization, Illinois automatically treats your LLC as member-managed. Choosing the correct structure is important because it affects authority, liability, and how decisions are made.

4. File Articles of Organization with the Illinois Secretary of State

To legally form your LLC, you must file Articles of Organization with the Illinois Secretary of State. This document officially registers your business with the state and includes key information such as:

• LLC name
• Principal office address
• Registered agent name and address
• Business purpose

The filing fee is $150. Online filings are typically processed within 7–10 business days, while mailed filings can take up to five weeks. Illinois also offers expedited processing for an additional fee.

Illinois Secretary of State Contact Information

Website: Illinois Secretary of State

Physical Address:
213 State Capitol
Springfield, IL 62756

Phone:
800-252-8980 (Illinois)
217-785-3000 (outside Illinois)
Chicago Business Line: 312-793-3380

5. Draft an Operating Agreement

An operating agreement outlines how your LLC is owned and operated. Although Illinois does not legally require an operating agreement, having one is strongly recommended—even for single-member LLCs. This document helps establish credibility, prevents disputes, and reinforces limited liability protection.

A typical operating agreement covers ownership percentages, management responsibilities, voting rights, profit and loss distribution, procedures for adding or removing members, dispute resolution, and record-keeping practices. While templates are available online, having an attorney review or draft your agreement ensures it reflects your specific business needs and complies with Illinois law.

6. Get Your Employer Identification Number (EIN)

An Employer Identification Number (EIN) is issued by the IRS and is used to identify your LLC for tax purposes. An EIN is required if your LLC has more than one member, hires employees, or opens a business bank account.

You can apply for an EIN for free through the IRS website. During the application, you must list a responsible party, who is the individual that controls and manages the LLC's funds and operations.

7. Obtain Business Licenses and Permits

Depending on your business type and location, you may need federal, state, or local licenses and permits. At the federal level, some industries require permits from agencies such as OSHA. At the state level, businesses selling taxable goods or services must obtain an Illinois sales tax license through MyTax Illinois.

Illinois does not issue a general business license, but many professions and industries require specific registrations. Local cities and counties may also require zoning permits, signage permits, or local business registrations.

Failing to obtain the correct licenses can result in fines or penalties, so it's important to verify requirements with state and local authorities or consult a business attorney.

8. Determine Your Tax Status

By default, Illinois LLCs are taxed as pass-through entities, meaning the LLC itself does not pay income tax. Instead, profits and losses pass through to the owners' personal tax returns.

Single-member LLCs are taxed like sole proprietorships, with income reported on Schedule C and subject to self-employment taxes. Multi-member LLCs are taxed as partnerships by default and must file Form 1065, with each member reporting their share of income.

LLCs may also elect C-corporation or S-corporation tax status. C-corps are subject to double taxation but may benefit businesses that retain earnings. S-corps can reduce self-employment taxes by allowing owners to split income between salary and distributions.

Illinois also imposes a Personal Property Replacement Tax, state income tax, sales tax, and employment taxes, depending on business activities.

Annual Reporting and Ongoing Compliance

Illinois LLCs must file an Annual Report every year to remain in good standing. The report is due before the first day of the LLC's anniversary month, and the filing fee is $75. Late filings incur a $100 penalty, and failure to file within 180 days can lead to administrative dissolution.

Illinois LLC FAQs