Illinois LLCs cost $150 to form and $75/year for annual reports. No publication requirement. Annual report due by first day of anniversary month - late filings incur $100 penalty plus $25/month. 42% of IL LLCs miss first annual report deadline costing unnecessary $125+ in penalties.
Illinois LLC Basics
Illinois Secretary of State (ILSOS) processes LLC formations. $150 filing fee. 5-7 business days standard processing.
$100 expedite fee: 24-hour processing. $200 same-day processing available for urgent filings.
Name Requirements
Must include "Limited Liability Company", "LLC", or "L.L.C." Case doesn't matter.
Can't use restricted words without approval: Bank, Trust, Insurance, University. ILSOS rejects 18% of name applications for similarity to existing businesses.
Name Availability Search
Search ILSOS Business Entity Search database. Free. Check exact match and similar names.
Name reservation: $25, holds 90 days. Can extend once for additional $25 (180 days total).
Formation Process
File Articles of Organization with ILSOS. Online filing at cyberdriveillinois.com or mail to Springfield office.
Required information: LLC name, registered agent with IL address, organizer details, management structure (member-managed or manager-managed).
Registered Agent Requirement
Must have IL registered agent with physical street address (no PO boxes). Can use yourself if you have IL address.
Professional registered agent: $100-300/year. Handles service of process, keeps business address private.
Annual Report
Due every year by first day of anniversary month. $75 fee. File online through ILSOS.
Example: LLC formed June 15, 2024 must file annual report by June 1, 2025.
Penalty for Late Filing
$100 late fee if filed after first of month. Additional $25/month for continued non-filing.
Administrative dissolution after 2+ years of non-compliance. Costs $200-400 to reinstate dissolved LLC.
IL vs Other States
Illinois vs Delaware: IL costs $150 formation, DE costs $90. But IL has lower annual fees ($75 vs DE $300 franchise tax). Choose IL if operating primarily in Illinois.
Illinois vs Wyoming: IL requires $75 annual report, WY requires $60 + $2 per $1,000 assets. IL better for small businesses, WY better for asset-heavy businesses.
No Publication Requirement
Unlike New York ($1,500 newspaper publication), Illinois has no publication requirement. Saves significant money.
Operating Agreement
Not required to file but HIGHLY RECOMMENDED to create. Governs member relationships, profit distribution, management.
Required if multi-member LLC to avoid default IL partnership rules. Single-member LLCs should also create Operating Agreement to protect limited liability status.
Tax Considerations
Federal tax: Pass-through by default. Single-member = Schedule C. Multi-member = Form 1065. Can elect S-Corp or C-Corp taxation.
Illinois state tax: Personal Property Replacement Tax (2.5% on net income if receipts >$4M). Most small LLCs exempt.
Cook County Additional Taxes
LLCs operating in Cook County (Chicago area) may have additional local taxes. Check municipality requirements.
Common Mistakes
Missing annual report deadline: $100 penalty plus $25/month. Not understanding "first of month" deadline (not anniversary date).
Using home address as registered agent: Exposes home address to public. Professional agent costs only $100-200/year for privacy.
Assuming "good standing" lasts forever: Must file annual report every year even if LLC is inactive. Non-filing leads to dissolution.
Foreign LLC
If formed in another state but operating in Illinois, must register as foreign LLC. $150 filing fee. Same $75 annual report requirement.
Example: Delaware LLC doing business in Illinois pays $90 DE formation + $300 DE franchise tax + $150 IL foreign registration + $75 IL annual report = $615/year vs $225/year for IL domestic LLC.
Trademark Lens verifies Illinois LLC name availability before $150-175 formation costs.