Forming an LLC in Illinois is a pivotal step for entrepreneurs seeking asset protection and other benefits. Establishing an LLC entails several considerations, including fees, the structure type such as a single member LLC, and creating an operating agreement. Furthermore, LLCs must file an annual report, reinforcing the necessity of understanding taxes for financial planning. Mastering these elements is fundamental to navigating the LLC establishment process effectively, ensuring compliance, and maintaining continued recognition.
An LLC is established in Illinois when you file for one with the Secretary of State. Once your application is approved, Illinois will recognize your business entity as legally separate from you. This has a few important implications that will be discussed further below. However, an important advantage for LLC owners includes that you will no longer be held personally liable for the debts and liabilities of the company.
Articles of organization are part of a formal legal document used to establish a limited liability company (LLC) at the state level. A limited liability company (LLC) is a business organization type in the United States whereby the owners are not personally liable for the company's debts or liabilities. Limited liability companies are hybrid entities that combine the features of a corporation with those of a partnership or sole proprietorship. If you own a business and several assets, you may want to consider forming an LLC. Each state has different laws on forming an LLC. However, submitting the Articles of Organization is crucial in establishing an LLC in all states. This includes Illinois.
The main cost of establishing an LLC comes with the state filing fee. You will need to submit your articles of organization. The cost to establish an LLC in Illinois is $150. The standard processing time is ten business days. You can expedite the process by paying an additional $100 fee at the Chicago or Springfield office. The expedited processing time is approximately 24 hours during regular business hours. For a foreign LLC, the fee is the same, $150, and you will need to complete the Application for Admission to Transact Business.
There are two main methods for forming your LLC. You can either hire a professional LLC formation service or do it yourself. The cost of a professional LLC formation service for a small fee.
When you submit the articles of organization, Illinois requires you to appoint a designated person or registered agent to handle your business’s legal documents, notify you of any lawsuit summons, and perform any government correspondence. If you choose to appoint a professional registered agent service, the cost will vary depending on their charges. The cost for most registered agent services is about $50-$100 per year in Illinois. Some professional registered agent services can cost more than $100. However, if you choose to appoint yourself or a business colleague, there is no separate fee from Illinois. There are extra costs if you need to change your registered agent. See below for details. Note that you can expedite the processing of the two forms below with an extra $50 fee.
If your registered agent resigns, you have 60 days within the resignation to submit a Statement of Change to the Secretary of State or you will be subject to a $100 late fee.
An assumed name is not necessarily required, but should be considered in the following cases:
The fee structure for filing a DBA is a bit convoluted in Illinois. The assumed name cost of $150 is spread over five years. The fee is billed according to the following formula:
To renew your DBA, you will need to do so when you file your annual report. If you fail to renew your assumed name, there is a $100 late fee.
If you wish to change your assumed name during the five years, you must pay an additional $25 fee. To cancel your assumed name registration, the cost is another $5.
In Illinois, one of the requirements when establishing your LLC, is to select a unique name that is not already registered with the Secretary of State. You can submit an Application to Reserve a Name to ensure your desired name is available when you file your LLC. The cost is $25. This reserves the name for 90 days.
Depending on your LLC’s industry and location, the business permits and licenses you need to acquire will vary. You can check the Illinois state government website to check for what registrations, licenses, and permits you need to apply for.
If you are a retail business, you must collect sales tax and register with the Illinois Department of Revenue. The registration is free, and you can do this quickly online.
All LLCs in Illinois must file an annual report with the Secretary of State. The annual filing fee is $75. The annual report is due the first day of the month that the LLC registration initially occurred. If you file the report late, you are subject to a $100 late penalty.
The basic cost for establishing an LLC in Illinois costs $150, and the annual report is $75. The cost to maintain and establish your LLC will increase depending on what additional services, permits, or licenses you require.