How to Set Up an LLC in Illinois

By Larissa Bodniowycz, J.D.

How to Set Up an LLC in Illinois

By Larissa Bodniowycz, J.D.

A limited liability company (LLC) is an attractive business form because it provides limited liability protection and an unparalleled level of flexibility in structuring the entity, and it requires much less work to maintain than a corporation. In late 2017, an LLC became an even more attractive option for Illinois business owners because the state significantly reduced the cost associated with forming one.

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If you want to take advantage of the benefits of running your business as an LLC, you can form an LLC in Illinois by following these steps.

1. Choose a unique name for your LLC.

The first step in forming an LLC is to choose a name for your business. Illinois law has several rules about what your name can and cannot include. The most important rules are:

  • The name must include the terms "limited liability company", "L.L.C", or "LLC".
  • The name cannot include "Corporation", "Corp.", "Incorporated", "Inc.", "Ltd.", "Co.", "Limited Partnership" or "L.P."
  • The name cannot falsely imply government affiliation.
  • The name cannot use any variation of the word "bank" or the name of any other licensed professional service without filing additional paperwork.

In addition, the name must be distinguishable from the names of existing Illinois businesses. You can search a database managed by the Illinois Secretary of State for your business name to see if the name or a substantially similar name is already in use. Small differences between your proposed business name and the name of an existing business are not enough. The Illinois Secretary of State decides whether your proposed name is unique.

Once you have selected and cleared a name, you can reserve it through the Secretary of State for a fee of $25 (as of 2018) or simply move forward immediately with the other steps to form your LLC.

2. Select a registered agent.

The next step in forming your LLC is selecting a registered agent. A registered agent is an individual or other business that receives service of process notices and other important correspondence on behalf of your LLC. Your registered agent must have a physical address in Illinois (not a P.O. box) and be available at that location during normal business hours.

If at any time your registered agent resigns or you wish to choose a new registered agent for a different reason, you must inform the Secretary of State of the change.

3. File articles of organization.

Once you have a name and a registered agent, you must prepare articles of organization and file them with the Secretary of State. Many businesses use the Articles of Organization (Form LLC-5.5) provided by the Secretary of State. Fill out the form with the requested information, including your LLC's name, registered agent, purpose, and principle place of business. Sign and date the form, and submit it to the Secretary of State online or by mail with the required filing fee.

4. File an annual report.

Once your LLC has formed, you must file an annual report with the Secretary of State to keep your LLC active and in good standing. The report is due annually before the first day of the month during which your LLC formed. Late fees apply if you do not file on time. If you do not complete the report within 180 days of when it was due, the state will administratively dissolve your LLC.

Attention to detail is important when preparing your paperwork to form and maintain your Illinois LLC. Incomplete or incorrectly filled out forms can result in the rejection of your LLC application or delays in the approval process. If you do not want to complete the process yourself, an experienced online legal service provider can set up your LLC for you.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.