How to start an LLC in Illinois in 2025

Set up your LLC, headache-free, with GoDaddy Airo®.

See More

Starting your own business in Illinois is an exciting move, but before you dive into the day-to-day, you’ll need to decide on the right business structure. Many entrepreneurs opt to form a limited liability company (LLC). This is because an LLC offers flexibility, legal protection, and tax advantages.

Starting an LLC in Illinois might feel complicated at first, but it doesn’t have to be. Use this guide to bring your business idea to life in The Prairie State. 

How to start an LLC in Illinois in 5 steps

Forming an LLC in Illinois is straightforward. It requires choosing a business name, appointing a registered agent, filing the Articles of Organization, creating an operating agreement, and getting an EIN. On average, filing online through the Illinois Secretary of State takes five to 10 business days. If you choose to file by mail, it can take several weeks. 

If you’re a first-time business owner, you may want to learn more about starting a business or what an LLC organizer is before getting started. When you’re ready to take the next step, you can set up your LLC for free with GoDaddy.

Follow the five steps below to get your Illinois LLC up and running.

1. Choose a name for your LLC

The first step in forming your Illinois LLC is picking a name that meets state requirements and is available to use. Before committing to a name, use the Illinois Secretary of State Business Entity Search tool to confirm that it is not already in use.

Your business name is how customers will recognize your business, so it’s worth taking the time to get it right. The Illinois naming requirements for LLCs are:

• Names must include “Limited Liability Company” or an abbreviation such as “LLC” or “L.L.C.”
• Do not use words that could confuse your business with a government agency (for example, “FBI” or “Treasury”).
• Exclude restricted terms (e.g., “bank,” “insurance”) unless you meet additional licensing requirements.

If you’ve chosen an LLC name but aren’t ready to file yet, Illinois allows you to reserve a name for 90 days by submitting a form and paying a $25 fee. 

Get your business domain name

Once you’ve locked in your LLC name, secure the matching domain name to build your online presence. Domains get taken quickly, so it’s best to act fast. You can easily register a domain name through GoDaddy to keep your brand consistent across all platforms.

Get a DBA

A DBA (doing business as), commonly referred to as an assumed name in Illinois, lets your LLC operate under a different public-facing name than the legal LLC name. This is useful if your LLC name is formal but you want a more customer-friendly storefront name. 

For example: “Green River Ventures LLC” could file a DBA to operate as “Green River Coffee.” In Illinois, DBAs are filed and renewed at the county level through the county clerk’s office. Requirements and filing fees vary by county, so check with your local office for details.

2. Appoint a registered agent

Illinois law requires every LLC to designate a registered agent. This is the official point of contact for your business. They receive legal documents, compliance notices, and tax forms on behalf of your company. Your registered agent can be an individual (including yourself) or a professional service authorized to do business in Illinois, but they must:

• Have a physical street address in Illinois (P.O. boxes are not allowed).
• Be available during normal business hours.

Having a registered agent ensures you don’t miss important legal deadlines or compliance notices. If you fail to appoint and maintain one, the state can dissolve your LLC.

3. File Articles of Organization

The Articles of Organization is the official document that legally creates your LLC in Illinois. You’ll file it with the Illinois Secretary of State online or by mail. The Articles of Organization typically ask for:

• LLC name and address
• Duration (perpetual or set term)
• Business purpose
• Registered agent’s name and physical address
• Names and addresses of LLC organizers
• Management structure (member-managed or manager-managed)

Filing the Articles of Organization in Illinois costs $150. Once it’s approved, your LLC is officially recognized by the state.

4. Create an operating agreement

Illinois does not require LLCs to create or file an operating agreement. However, having one is crucial because it outlines how your LLC will function and helps prevent disputes between members. 

Even for a single-member LLC, having this agreement strengthens your legal protections and provides clarity. 

It’s also important to note that banks and investors often require one before opening accounts or providing funding.

Your Illinois LLC’s operating agreement should include:

• Ownership percentages and capital contributions
• Member roles, rights, and responsibilities
• How profits and losses will be distributed
• Voting rules and decision-making procedures
• Rules for adding or removing members
• Steps for dissolving the LLC if needed

5. Get an EIN

The last step in starting an LLC in Illinois is to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This is a unique identifier you’ll need to:

• Open a business bank account
• Establish business credit
• File federal and state taxes
• Hire employees
• Apply for certain business permits and licenses

You can apply for an EIN online. 

How long does it take to get an EIN?

The IRS issues your EIN immediately after your application is submitted, reviewed, and approved. This is usually done within a matter of minutes online. If you apply by mail or fax, it can take up to 5 weeks to get your EIN.

How much does an EIN cost?

It is completely free to apply for and maintain an EIN issued by the IRS. There are also no renewal or processing fees. If you’re asked to pay for your EIN, you are likely applying through a third-party service rather than the IRS itself.

How much does it cost to start and run an LLC in Illinois?

Starting and maintaining an Illinois LLC comes with both one-time and ongoing costs. Knowing these upfront helps you plan your budget and avoid surprises later. Here’s a breakdown of what you can expect:

• Articles of Organization filing fee: $150 
• Name reservation (optional): $25 to reserve a name for 90 days if you’re not ready to file immediately.
• Expedited filing service (optional): $100 extra if you want faster processing of your Articles of Organization.
• Assumed name filing fee: $30 (fees may vary by county).
• Registered agent service (optional): $100–$300 annually if you hire a professional service instead of serving as your own agent.
• Annual report fee: $75 due each year by the first day of your LLC’s anniversary month.
• State income tax: Illinois has a flat income tax rate of 4.95% on business profits.
• Self-employment tax: 15.3%, if you’re taxed as a sole proprietor or partnership.
• Sales tax: 6.25% state rate (local rates may also apply, depending on where you operate).
• Employer taxes: If you hire employees, you’ll be responsible for payroll taxes, unemployment insurance, and workers’ compensation coverage.

What happens after your LLC is up and running

Forming your Illinois LLC is just the beginning. Once your paperwork is approved, there are a few more items on your to-do list that will help keep your business compliant. 

Open a business bank account

Keeping your business and personal finances separate is one of the smartest things you can do as an LLC owner. It protects your limited liability status and makes bookkeeping, taxes, and cash flow management much easier. When opening a business bank account, most banks will ask for:

• Your EIN confirmation letter
• Approved Articles of Organization
• Operating agreement (especially for multi-member LLCs)
• Government-issued ID for each account signer
• Business address and contact information 

File for permits and required business licenses

Not every LLC needs extra permits or licenses, but many industries do. Illinois business owners should check requirements at both the state and local levels:

• Professional licenses: Regulated professions (like health care, construction, or real estate) get licenses through the Illinois Department of Financial and Professional Regulation (IDFPR).
• Local licenses: Your city or county clerk’s office may require a business license, zoning permit, or occupancy certificate. Rules vary depending on where you operate.

IDOR registration

If your LLC will sell goods or hire employees, you’ll need to register with the Illinois Department of Revenue (IDOR) through the MyTax Illinois system. This sets you up for:

• Sales and use tax accounts if you’re selling products.
• Withholding tax accounts if you’re paying employees.
• Other tax accounts, depending on your business activity.

File annual reports

Illinois LLCs must file an annual report with the Illinois Secretary of State to stay active and in good standing. This report is due every year before the first day of your LLC’s anniversary month. The filing cost is $75, but you may incur a $100 late fee if you miss the deadline by 60 days or more. To file your annual report online:

• Enter your LLC file number (located in your approval paperwork and the state’s business database) on the Illinois Secretary of State website
• Confirm or update your LLC details 
• Submit and pay the $75 filing fee
• Save your receipt for your records

Things you need to know about Illinois LLCs

Now that your business is up and running, there are some state-specific rules and tax details to keep in mind.

Personal Property Replacement Tax (PPRT)

Illinois LLCs classified as partnerships, S corporations, or trusts must pay the Personal Property Replacement Tax (PPRT). This is a state tax designed to replace local property taxes that were eliminated in the 1970s. The PPRT is currently set at 1.5% of your net income. It is paid through your state tax filings with the Illinois Department of Revenue (IDOR) using MyTax Illinois.

Franchise tax phase-out

Illinois previously charged LLCs and corporations a franchise tax, but that tax is being phased out. This is good news for business owners because it reduces long-term costs. The phase-out process began in 2020 and ended in 2024. This means if you’re forming an LLC in Illinois now, you won’t need to plan for franchise tax obligations going forward.

Pass-through taxation

By default, Illinois LLCs are treated as pass-through entities. That means the business itself doesn’t pay federal income tax. Instead, profits and losses “pass through” to the members, who report them on their personal tax returns.

• Federal taxes: Members pay income tax and self-employment tax (if applicable) on their share of profits.
• State taxes: Illinois applies its flat 4.95% income tax rate to individual income, including LLC profits passed through to members.
• Flexibility: LLCs can also elect to be taxed as an S corporation or C corporation if that’s more beneficial for your business.

Frequently Asked Questions

How long does it take to get an LLC in IL?

If you file your Articles of Organization online through the Illinois Secretary of State, approval usually takes 5–10 business days. Filing by mail can take several weeks. If you need to form your LLC faster, you can pay an additional fee to expedite processing.

Do I need a lawyer to start an LLC in Illinois?

No, you don’t need a lawyer to form an LLC. Most first-time business owners complete the process themselves by filing directly with the state. That said, you might choose to consult a lawyer if your LLC has multiple members, complex ownership structures, or if you want legal guidance on your operating agreement.

Do I need a business license if I have an LLC in Illinois?

An LLC doesn’t automatically give you the licenses or permits your business may need. Some industries—like food service, construction, or health care—require professional or activity-based licenses. You may also need a local business license or zoning permit from your city or county. Always check with the Illinois Department of Financial and Professional Regulation (IDFPR) and your local clerk’s office to confirm requirements.

Can I form a Series LLC in Illinois?

Yes. Illinois is one of the states that allows Series LLCs, which let you create one “parent” LLC with multiple “series” under it. Each series can hold separate assets and liabilities, which can be useful if you run multiple lines of business.