How to Form an LLC in Illinois (2026)
Reviewed by DocDraft Legal Team · Illinois · Last updated 2026-08-06
A limited liability company (LLC) is a business structure that legally separates the company from the people who own it, so the owners are generally not personally responsible for the company's debts. Forming one in Illinois means filing a formation document with a state agency and paying its fee to bring the company into legal existence. In Illinois you create an LLC by filing the Articles of Organization with the Secretary of State's Department of Business Services and paying a $150 filing fee. Two features shape the real cost of running an Illinois LLC. First, Illinois charges no franchise or annual tax on an LLC that is not taxed as a corporation, so a standard pass-through LLC avoids the yearly minimum tax that states like California impose. Second, every Illinois LLC must file an annual report with a $75 fee to stay in good standing. Illinois LLCs are governed by the Illinois Limited Liability Company Act, 805 ILCS 180. This guide explains what an LLC is, the exact Illinois steps and fees, and the deadlines that keep the company in good standing.
Find out where you stand in Illinois
Where are you in forming your LLC?
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How do you form an LLC in Illinois?
File the Articles of Organization with the Illinois Secretary of State's Department of Business Services and pay the $150 filing fee. You must name a registered agent with a physical Illinois street address. Online filings are generally processed in about 5 to 10 business days, and the LLC exists once the state files the document.
How much does it cost to form an LLC in Illinois?
The core cost is the $150 fee to file the Articles of Organization with the Secretary of State, paid once. After that, each Illinois LLC files an annual report with a $75 fee to stay in good standing. Reserving a business name before you file is optional and costs $25.
Does an Illinois LLC pay a franchise tax?
No. Illinois does not impose a franchise or annual state tax on an LLC that is not taxed as a corporation. A standard pass-through Illinois LLC owes no yearly minimum tax to the state, though it still files the $75 annual report. An LLC that elects corporate tax treatment is taxed differently.
Does Illinois require newspaper publication to form an LLC?
No. Illinois does not require an LLC to publish notice of its formation in a newspaper. This is unlike New York, Arizona, and Nebraska, where publication is a condition of forming or operating. In Illinois the Articles of Organization filing and the annual report are all handled through the Secretary of State.
Illinois LLC formation at a glance
You form an Illinois LLC by filing the Articles of Organization with the Secretary of State's Department of Business Services for a $150 filing fee. What sets Illinois apart is the absence of an ongoing state tax on standard LLCs. Illinois charges no franchise or annual tax on an LLC that is not taxed as a corporation, so a pass-through LLC avoids the yearly minimum tax that states like California and Delaware impose. The main recurring obligation is the annual report, filed with the Secretary of State for a $75 fee, due each year before the first day of the LLC's anniversary month of formation. Every Illinois LLC must name and continuously maintain a registered agent with a physical Illinois street address who accepts legal papers during business hours. Illinois does not require newspaper publication. Online filings are generally processed in about 5 to 10 business days. The governing statute is the Illinois Limited Liability Company Act, 805 ILCS 180.
Forming a two-owner Illinois LLC, step by step
Suppose two friends in Chicago want to open a small design studio as an LLC. First they search the Illinois Secretary of State's business database to confirm their name is available and includes a designator such as LLC, and they can reserve the name for a $25 fee while they prepare paperwork. Next they appoint a registered agent: one owner lives in Illinois and agrees to serve, using an Illinois street address, not a P.O. box, where legal papers can be delivered during business hours. They then file the Articles of Organization with the Secretary of State's Department of Business Services and pay the $150 filing fee. The LLC legally exists once the state files it, generally about 5 to 10 business days after an online submission. Because they have two members, they also write an operating agreement setting each owner's percentage and how profits split, even though Illinois does not require them to file it. They apply to the IRS for a free EIN so the partnership can file taxes and open a bank account. Finally they calendar the annual report, due each year before the first day of their anniversary month of formation, with a $75 fee. Because their LLC is a standard pass-through, they owe no Illinois franchise or annual state tax, so the annual report is their main recurring state obligation.
Relevant Laws
Illinois Limited Liability Company Act (805 ILCS 180)
The Illinois LLC Act governs the formation, management, and dissolution of every Illinois LLC. It sets who may form an LLC, the required contents of the Articles of Organization, the registered agent requirement, and the default rules for member-managed and manager-managed companies. It is the controlling body of law for Illinois LLCs.
805 ILCS 180/5-5 (Articles of Organization)
Requires an LLC to be formed by delivering Articles of Organization to the Illinois Secretary of State for filing. The articles state the LLC's name, its principal place of business, its registered agent and registered office, its purpose, and whether it is member-managed or manager-managed. The filing fee is $150.
805 ILCS 180/1-35 (Registered agent and registered office)
Requires every Illinois LLC to designate and continuously maintain a registered agent and registered office in Illinois. The agent, an individual residing in Illinois or an entity authorized to do business in Illinois, receives lawsuits and official notices for the company. The registered office must be a physical Illinois street address.
805 ILCS 180/50-1 (Annual report)
Requires an Illinois LLC to file an annual report with the Secretary of State. The report is due each year before the first day of the anniversary month in which the LLC was organized, and it keeps the LLC's address, management, and registered agent information current. The filing fee is $75.
805 ILCS 180/50-10 (Fees)
Sets the fees the Secretary of State charges for LLC filings. It fixes the fee for filing the Articles of Organization for a domestic LLC at $150 and lists the fees for related filings such as the annual report and name reservation. These are the statutory amounts payable to the Department of Business Services.
IRS federal tax classification (default pass-through)
The IRS does not tax the LLC as a separate category. By default a single-member Illinois LLC is disregarded and taxed like a sole proprietorship, and a multi-member LLC is taxed as a partnership, with income passing through to the owners. An LLC may instead elect S corporation or C corporation treatment. This federal classification is separate from Illinois state filings.
Regional Variances
How forming an LLC in Illinois differs from other states
No franchise or annual tax on standard LLCs
This is the headline difference for cost. Illinois imposes no franchise or annual state tax on an LLC that is not taxed as a corporation, so a pass-through Illinois LLC owes no yearly minimum tax. California charges an $800 minimum franchise tax and Delaware charges a $400 annual tax, both regardless of income. In Illinois the recurring state cost is the $75 annual report.
Annual report, not biennial
Illinois requires an annual report each year, filed with the Secretary of State for a $75 fee, due before the first day of the LLC's anniversary month of formation. States like California and New York use a biennial cycle instead. The annual cadence means there is a filing to track every single year.
No newspaper publication requirement
Illinois does not require you to publish notice of formation in a newspaper. New York, Arizona, and Nebraska do, which adds cost and a deadline. An Illinois LLC is complete once the Secretary of State files the Articles of Organization, with no publication step.
Formation document and filing office
Illinois uses the Articles of Organization, filed with the Secretary of State's Department of Business Services. Some states call the document a Certificate of Formation or Certificate of Organization, and some route filings through a Division of Corporations or a Department of Financial Institutions rather than the Secretary of State.
Mid-range filing fee
Illinois charges $150 to file the Articles of Organization. That sits above low-fee states such as Kentucky at $40 and Michigan at $50, and well below Massachusetts at $500 and Nevada at $425. The one-time fee is a larger share of an Illinois LLC's state cost because there is no annual franchise tax.
Suggested Compliance Checklist
Confirm your LLC name is available and compliant
Before filing days after startingSearch the Illinois Secretary of State's business database to confirm your desired name is not already in use and that it includes a required designator such as LLC or Limited Liability Company. Avoid restricted words that need special approval. You can reserve an available name with the Secretary of State for a $25 fee while you prepare your Articles of Organization.
Appoint a registered agent
Before filing days after startingIllinois requires a registered agent with a physical Illinois street address, the registered office, who is available during business hours to accept legal documents. Decide whether you, a co-owner who lives in Illinois, or a commercial registered agent service will serve. You will name the agent on the Articles of Organization, so settle this first.
File the Articles of Organization with the Secretary of State
To create the LLC days after startingFile the Articles of Organization with the Illinois Secretary of State's Department of Business Services and pay the $150 filing fee. The LLC legally exists only once the Secretary of State files it, generally about 5 to 10 business days after an online submission. Keep the filed confirmation as proof of formation.
Adopt an operating agreement
At or soon after formation days after startingPut the ownership percentages, profit split, management structure, and exit rules in writing. Illinois's LLC act lets members set these terms by agreement, but you do not file it with the state. It governs how the LLC runs and overrides the act's default rules. Attorney review of the agreement is available as an option through DocDraft.
Get a federal EIN from the IRS
Before opening a bank account or hiring days after startingApply for an Employer Identification Number free on the IRS website. Multi-member LLCs, LLCs with employees, and LLCs electing corporate tax treatment need one. Single-member LLCs with no employees usually get one anyway to open a business bank account and keep business and personal finances separate.
File the annual report each year
Before the first day of your anniversary month of formation days after startingFile the annual report with the Secretary of State each year before the first day of the anniversary month in which the LLC was organized. The fee is $75. It keeps the LLC's address, management, and registered agent information current. Missing it can lead to administrative dissolution of the LLC, so calendar the deadline.
Confirm state tax obligations with the Illinois Department of Revenue
After formation, before the first tax year days after startingA standard Illinois LLC owes no franchise or annual state tax, but income passes through to the members, and Illinois applies a separate replacement tax to some pass-through entities. Register with the Illinois Department of Revenue if you will collect sales tax or have employees, and confirm which returns apply to your LLC.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Confirm your LLC name is available and compliant | Search the Illinois Secretary of State's business database to confirm your desired name is not already in use and that it includes a required designator such as LLC or Limited Liability Company. Avoid restricted words that need special approval. You can reserve an available name with the Secretary of State for a $25 fee while you prepare your Articles of Organization. | - | Before filing |
| Appoint a registered agent | Illinois requires a registered agent with a physical Illinois street address, the registered office, who is available during business hours to accept legal documents. Decide whether you, a co-owner who lives in Illinois, or a commercial registered agent service will serve. You will name the agent on the Articles of Organization, so settle this first. | - | Before filing |
| File the Articles of Organization with the Secretary of State | File the Articles of Organization with the Illinois Secretary of State's Department of Business Services and pay the $150 filing fee. The LLC legally exists only once the Secretary of State files it, generally about 5 to 10 business days after an online submission. Keep the filed confirmation as proof of formation. | - | To create the LLC |
| Adopt an operating agreement | Put the ownership percentages, profit split, management structure, and exit rules in writing. Illinois's LLC act lets members set these terms by agreement, but you do not file it with the state. It governs how the LLC runs and overrides the act's default rules. Attorney review of the agreement is available as an option through DocDraft. | llc-operating-agreement | At or soon after formation |
| Get a federal EIN from the IRS | Apply for an Employer Identification Number free on the IRS website. Multi-member LLCs, LLCs with employees, and LLCs electing corporate tax treatment need one. Single-member LLCs with no employees usually get one anyway to open a business bank account and keep business and personal finances separate. | - | Before opening a bank account or hiring |
| File the annual report each year | File the annual report with the Secretary of State each year before the first day of the anniversary month in which the LLC was organized. The fee is $75. It keeps the LLC's address, management, and registered agent information current. Missing it can lead to administrative dissolution of the LLC, so calendar the deadline. | - | Before the first day of your anniversary month of formation |
| Confirm state tax obligations with the Illinois Department of Revenue | A standard Illinois LLC owes no franchise or annual state tax, but income passes through to the members, and Illinois applies a separate replacement tax to some pass-through entities. Register with the Illinois Department of Revenue if you will collect sales tax or have employees, and confirm which returns apply to your LLC. | - | After formation, before the first tax year |
Frequently Asked Questions
An LLC, or limited liability company, is a business structure that separates the company from its owners as a matter of law. The owners, called members, are generally not personally liable for the company's debts or lawsuits, so a creditor usually cannot reach a member's home or personal savings for a business obligation. In Illinois, LLCs are created under the Illinois Limited Liability Company Act, 805 ILCS 180. An LLC pairs that liability protection with pass-through taxation and lighter paperwork than a corporation, which is why it is the most common structure for small Illinois businesses.
You start an Illinois LLC by filing the Articles of Organization with the Illinois Secretary of State's Department of Business Services and paying the $150 filing fee. The articles list the LLC's name, principal place of business, registered agent and registered office, purpose, and whether it is member-managed or manager-managed. The company legally exists only once the Secretary of State files the document, so keep the filed confirmation as your proof of formation.
No. Illinois imposes no franchise or annual state tax on an LLC that is not taxed as a corporation, so a standard pass-through Illinois LLC avoids the yearly minimum tax that California ($800) and Delaware ($400) charge regardless of income. Your recurring state cost is the $75 annual report, not a franchise tax. An LLC that elects corporate tax treatment is taxed under different rules.
Illinois uses an annual cycle, not the biennial cycle some states use, so there is a report to track every year. You file the annual report with the Secretary of State and pay a $75 fee. It keeps your address, management, and registered agent details current. The report is due before the first day of the anniversary month in which your LLC was organized, and missing it can lead to administrative dissolution.
Yes. If you want to lock in a name while you prepare your paperwork, you can reserve it with the Illinois Secretary of State for a $25 fee. Reservation is optional; many filers skip it and simply confirm availability in the Secretary of State's business database before filing. Your name must be distinguishable from existing entities and include a designator such as LLC or Limited Liability Company.
The Illinois LLC Act requires every LLC to maintain a registered agent with a physical Illinois street address, called the registered office, who accepts lawsuits and official mail during business hours. That can be you, a co-owner who lives in Illinois, or a commercial registered agent service. A P.O. box does not qualify. You name the agent on the Articles of Organization and must keep the designation current for the life of the LLC.
For many Illinois owners, yes. A sole proprietorship gives no liability separation, so your personal assets are exposed to business debts and lawsuits. An Illinois LLC created under 805 ILCS 180 shields members from most company obligations while keeping the same pass-through taxation and no franchise tax. The tradeoff is the $150 filing fee and the $75 annual report. Attorney review is available through DocDraft if you want a licensed attorney to weigh the choice for your situation.
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