--- title: "How to Start an LLC in Illinois (2026)" canonical: https://startupowl.com/start/illinois-llc last_updated: "October 15, 2026" --- # How to Start an LLC in Illinois (2026) Form an Illinois LLC for $150. File articles of organization online or by mail with the Secretary of State. Full step-by-step guide with costs and timelines. ## Illinois LLC Quick Facts | Fact | Value | | --- | --- | | Filing Fee (Online) | $150 | | Processing Time | 5-10 business days | | Expedited Available | Yes (same day or 24 hours, in person in Springfield or Chicago / $100) | | Annual Report | $75, due Before the first day of the anniversary month of formation. | | State Income Tax | Yes | | Sales Tax Rate | 6.25% | | Filed With | Illinois Secretary of State | | Last Verified | October 15, 2026 | Forming an LLC in Illinois costs $150 in state filing fees, and online filings are typically processed in 5 to 10 business days. This guide walks you through every step from choosing a name to opening your business bank account. ## What You Need to Know About Forming an LLC in Illinois An Illinois LLC keeps your own money and property apart from your business debts. If someone sues your LLC or it owes money, your bank accounts, home, and other property are generally protected. Most founders pick an LLC for this protection. Illinois charges $150 to file your articles of organization, the form that creates your LLC. You also pay a $75 annual report fee each year, starting the year after you form. It is due before the first day of the month that matches your formation date. Illinois has no franchise tax and no general state business license requirement, so your yearly costs stay simple. To form your LLC, you pick a name that follows Illinois rules. You also choose a registered agent with an Illinois street address. A registered agent is the person or company that receives legal mail for your business. Next you file with the Illinois Secretary of State and get an EIN from the IRS. An EIN is the federal tax number you need to open a business bank account. Then you write an operating agreement and open the account. Most founders finish within a couple of weeks if they file online. ## Choose a Name for Your Illinois LLC Step 1 Your LLC name must follow Illinois rules and differ from all other names on file with the Secretary of State. Your LLC name must be distinguishable from other names on the records of the Illinois Secretary of State. That means it must look different enough from other LLC names, reserved names, and some corporate names. You can search the Illinois Secretary of State's business name database for free before you file. [Search available names →](https://apps.ilsos.gov/corporatellc/) **Illinois LLC Naming Rules** - The name must include "LLC", "L.L.C.", or "Limited Liability Company" - The name must differ from other LLC names, reserved names, and some corporate names on file - The name cannot contain "Corporation", "Corp.", "Incorporated", "Inc.", "Ltd.", "Co.", "Limited Partnership", or "L.P." - Words such as "trust", "trustee", and "fiduciary" are allowed only after you meet the Illinois Corporate Fiduciary Act. Words that other Illinois laws restrict stay barred until you meet those rules. **Optional Name Reservation** - Reserve your name for 90 days by filing an application with the Secretary of State - The reservation fee is $25 - Useful if you need time to prepare your formation forms or raise money **State Specific** Adding "limited", "liability", or "company", or an abbreviation of one of them, does not make a name different. Changing "the", "and", a contraction, a verb tense, or a plural does not either. **Pro Tip** Search the Illinois business name database before you settle on a name. The search is free and takes less than a minute. ## Choose a Registered Agent in Illinois Step 2 Every Illinois LLC needs a registered agent with an Illinois street address at all times. A registered agent is the person or company that gets legal notices, lawsuit papers, and state mail for your LLC. The agent must be an Illinois resident or a company allowed to do business in Illinois. The agent needs a street address in Illinois. P.O. boxes do not qualify. **Your Three Options** - Be your own registered agent. It is free, but your address goes on the public record and you must be available during business hours. - Ask a trusted person in Illinois to serve. It is also free, but they take on a real responsibility. - Hire a professional registered agent service. It typically costs $50 to $300 a year, keeps your address private, and handles legal papers for you. **Pro Tip** If you use your own address, it becomes public record. A professional registered agent service lets you keep your home address private. ## File Your Articles of Organization with Illinois Step 3 You create your LLC by filing Form LLC-5.5 with the Illinois Secretary of State and paying the $150 filing fee. Filing Fee (Online): $150 Processing: 5-10 business days To create your LLC, file Form LLC-5.5, the Articles of Organization, with the Illinois Secretary of State. The form asks for your LLC name, your registered agent's name and address, and your main office address. It also asks for the purpose of your LLC and whether the owners or chosen managers will run it. You can file online or send a paper form by mail. **File Online** **Pros** - Typically processed in 5 to 10 business days - You see confirmation as soon as you submit - Faster than filing by mail **Cons** - Costs the same $150 as filing by mail - Rush service costs $100 extra and you generally ask for it in person, not online **File by Mail** **Pros** - You can review the paper form before you send it - Costs the same $150 filing fee **Cons** - Typically takes 3 to 4 weeks - You get no instant confirmation that it arrived - State Filing Fee: $150 (one-time) - Online Processing: 5-10 days (business days) - Expedited Option: $100 extra (24-hour processing) **State Specific** Online filings typically take 5 to 10 business days. Rush service costs $100 extra and comes back the same day or within 24 hours. You generally ask for it in person at the Secretary of State's Springfield office. ## Get an EIN from the IRS Step 4 An EIN is the federal tax number for your LLC. You need it to open a bank account, hire workers, and file taxes. Apply for an EIN on the IRS website. It is free. If the IRS approves your application, it gives you the EIN right away. You must finish in one sitting, because the session times out after 15 minutes without activity. You need this number to open a business bank account or file taxes for your Illinois LLC. [Apply for your EIN on IRS.gov →](https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online) ## Create an Operating Agreement for Your Illinois LLC Step 5 An operating agreement sets out how your LLC is owned and run. Illinois law does not require one, but every LLC should have one. An operating agreement is a written agreement among the owners of your LLC. It states who owns what share, how profits and losses are split, who makes decisions, and what happens if an owner leaves or the LLC closes. A single-owner LLC benefits too, because the agreement helps show that you and your business are separate. Banks may ask to see it when you open an account. **Key Sections to Include** - Who owns the LLC and each owner's share - How profits and losses are split among owners - Whether the owners or chosen managers run the LLC - Voting rights and how decisions get made - Rules for adding or removing owners - Steps for closing down the LLC - How much money or property each owner puts in **State Specific** Illinois law does not require an operating agreement. Without one, your LLC follows the default rules in the Illinois Limited Liability Company Act, which may not match what you want. ## Open a Business Bank Account for Your LLC Step 6 A business bank account keeps your money apart from your LLC's money. That helps you keep your liability protection. Mixing personal and business money is one of the fastest ways to lose the protection your LLC gives you. If a court finds that you used LLC money as your own, it can "pierce the veil" and make you personally liable. That phrase means the court ignores the LLC's separate status. A separate business checking account from day one avoids that risk and makes bookkeeping much easier at tax time. **What to Bring to the Bank** - Your filed and approved articles of organization from the Illinois Secretary of State - Your EIN confirmation letter from the IRS - Your operating agreement - A valid photo ID for every owner or manager who will sign on the account - A first deposit (the amount depends on the bank) **Pro Tip** Some banks offer free business checking for small LLCs. Compare a few before you pick one. ## Federal BOI Reporting No. FinCEN exempted every company formed in the United States from beneficial ownership reporting in an interim final rule published 26 March 2025 and applied from 21 March 2025, then made that exemption permanent in a final rule published 11 August 2026 and effective 14 August 2026. Only entities formed under foreign law and registered to do business in a US state still report. ## Frequently Asked Questions ### How much does it cost to start an LLC in Illinois in 2026? Forming an LLC in Illinois costs $150 in the first year if you act as your own registered agent. A professional registered agent typically adds $50 to $300 a year, so your first year comes to $200 to $450. The first $75 annual report falls due in the year after you form, so you can budget for it as a second year cost. ### How long does it take to get an LLC approved in Illinois? Online filings typically take 5 to 10 business days, and mail filings typically take 3 to 4 weeks. If you need the LLC sooner, you can pay $100 extra for expedited service. You generally request it in person at the Secretary of State's Springfield office, and the filing comes back the same day or within 24 hours. Check current times with the Secretary of State before you plan around them. ### Can one person form an LLC in Illinois? Yes, one person can form an LLC in Illinois and be its only owner and manager. You can act as your own registered agent if you live in Illinois and have a street address there, not a P.O. box. You file the same Articles of Organization (Form LLC-5.5) and pay the same $150 fee whether you have one owner or several. An operating agreement is not required but is recommended. ### Does Illinois require an LLC operating agreement? No, Illinois does not legally require an operating agreement. However, having one is strongly recommended. Without it, your LLC defaults to the rules in the Illinois Limited Liability Company Act, which may not reflect how you actually want to run your business. Banks also commonly ask to see one when you open a business account. ### What taxes does an Illinois LLC pay? Your Illinois LLC pays no franchise tax, and you pay income tax at a flat 4.95 percent on your personal return. By default, a one-owner LLC is taxed like a sole proprietorship and an LLC with several owners like a partnership. A partnership-taxed LLC also owes a 1.5 percent replacement tax on its net income, which the business pays itself. If you sell taxable goods or services, you collect sales tax at a base rate of 6.25 percent, and local rates add to it. ### Does an Illinois LLC have to file an annual report? Yes, your Illinois LLC files an annual report every year for $75, due before the first day of its formation anniversary month. The first one falls due in the year after you form. If it is still unfiled before the first day of the second month after that, you owe $100, plus $100 for each further year. A delinquency notice also goes to your registered office, and you have 120 days from the notice to file before dissolution. ## What to Do Next - [Get an EIN](https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online), Apply for free in about 10 minutes at IRS.gov, required before opening a bank account or hiring anyone. - [Open a Business Bank Account](#), Keep personal and business finances separate from day one. Bring your EIN, Articles of Organization, and a government ID. - [Create an Operating Agreement](#), Even if Illinois does not require one, an operating agreement protects your liability shield and defines how the LLC is managed. - [File Your Annual Report](#), Set a calendar reminder now. Missing your Annual Report deadline can result in late fees or administrative dissolution. - [Paying contractors](https://startupowl.com/setup/contractor-vs-employee#by-business-type), Illinois is not in the IRS forwarding program, so the federal $2,000 threshold does not settle what Illinois wants. Check the state directly.