Starting a business is an exciting venture, but it can be overwhelming regarding the legal and financial aspects. If you’re planning to open an LLC in Illinois, it’s important to understand the costs, files needed, and things to consider before getting started. In this article, we’ll guide you through the process of opening an LLC in Illinois from start to finish.
It’s important to consider factors such as your business plan, industry-specific requirements, and local business regulations when starting an LLC in Illinois. By taking the time to properly structure and form your LLC, you can lay the foundation for a successful and protected business venture.
Three Things To Be Aware Of When Starting Your LLC
The video below covers three things you must know when creating your LLC.
- Commingling Funds
- Registered Agent
- Piercing the Corporate Veil
If you are unfamiliar with these terms, please watch the video below.
Table of Contents
5 Steps to Create an LLC in Illinois
Illinois is a great state to start a business, and creating an LLC is a popular way to get started. Forming an LLC in Illinois can provide many benefits, including protection of personal assets, flexibility in management, and tax advantages. In this article, we will go over the key steps to create an LLC in Illinois:
- Choose a name: The first step in creating an LLC in Illinois is to choose a unique name that is not already in use by another business in the state. You can search for available names on the Illinois Secretary of State website.
- File Articles of Organization: The next step is to file Articles of Organization with the Illinois Secretary of State. This document includes basic information about your LLC, such as its name, address, registered agent, and business purpose.
- Appoint a registered agent: All LLCs in Illinois are required to appoint a registered agent who can receive legal and tax documents on behalf of the business.
- Create an operating agreement: While not required by law, it is recommended to create an operating agreement for your LLC. This document outlines the rights and responsibilities of the LLC’s owners and managers, as well as the procedures for decision-making, profit sharing, and other important matters.
- Obtain necessary licenses and permits: Depending on your business activities, you may need to obtain certain licenses and permits from state and local agencies.
Creating an LLC in Illinois can provide many benefits, but it’s important to follow the necessary steps and consider the costs and considerations. By choosing a unique name, filing Articles of Organization, appointing a registered agent, creating an operating agreement, and obtaining necessary licenses and permits, you can establish your LLC as a legal entity in Illinois and set it up for success.
Costs to Open an LLC in Illinois
Creating a Limited Liability Company (LLC) in Illinois can be a great option for entrepreneurs looking to start a business. LLCs provide personal liability protection, flexibility in management, and potential tax benefits.
Let’s review the costs of opening an LLC in Illinois.
- Articles of Organization filing fee: The first cost to consider when forming an LLC in Illinois is the filing fee for the Articles of Organization. This fee is $154 and must be paid when submitting the paperwork to the Secretary of State.
- Annual report fee: In addition to the initial filing fee, LLCs in Illinois are required to file an annual report. The fee for this report is $75.
- Business licenses and permits: Depending on the type of business you’re starting, you may need to obtain additional licenses and permits. The cost of these licenses and permits varies depending on the type of business and the location.
- Legal and accounting fees: While not required, many entrepreneurs choose to work with a lawyer and/or accountant when forming an LLC to ensure that everything is done correctly. These fees can vary depending on the complexity of the LLC formation.
In addition to the filing fee for the Articles of Organization and the annual report fee, there may be additional costs for business licenses and permits, as well as legal and accounting fees. By understanding these costs upfront, you can budget accordingly and ensure that your LLC is set up perfectly.
Files needed to open an LLC in Illinois
Before starting the process of forming an LLC, it’s important to understand the necessary documents and filings. These are the files needed to open an LLC in Illinois.
- Articles of Organization: The Articles of Organization are the foundational documents establishing the LLC as a legal entity. This document includes basic information about the LLC, such as its name, address, and purpose. It must be filed with the Illinois Secretary of State’s office, along with the required filing fee.
- Operating Agreement: While not required by Illinois law, an operating agreement is a crucial document for LLCs. This document outlines the ownership and management structure of the LLC, as well as the rights and responsibilities of the members. It can help prevent disputes and provide guidance on how to handle various situations that may arise.
- Business Licenses and Permits: Depending on the type of business you’re starting, you may need to obtain additional licenses and permits. This can include state and local permits, as well as industry-specific licenses.
Forming an LLC in Illinois requires several key documents and filings. The Articles of Organization and operating agreement are the foundational documents that establish the LLC as a legal entity and outline its management structure. Depending on the type of business, additional licenses and permits may also be required.
Incfile is our preferred choice for LLC formation because they provide all of the services your new business needs while being transparent with pricing. They also offer a free registered agent service for the first year, even in their free package.
Check out a behind-the-scenes of what managing your LLC looks like in your dashboard in this Incfile review.
Things to consider when opening an LLC in Illinois
If you are planning to start an LLC in Illinois, there are some important things you need to consider. Here are some key points to keep in mind:
- Choose a name: The name you choose for your LLC should be unique and not already in use by another business in Illinois. You can check the availability of your chosen name by searching the Illinois Secretary of State’s website.
- File articles of organization: You need to file articles of organization with the Illinois Secretary of State’s office to form your LLC. This document contains basic information about your company, such as its name, address, and purpose.
- Obtain necessary licenses and permits: Depending on the nature of your business, you may need to obtain certain licenses and permits from the state of Illinois or local governments.
- Determine the management structure: You will need to decide whether your LLC will be member-managed or manager-managed. In a member-managed LLC, the owners manage the business themselves. In a manager-managed LLC, the owners appoint a manager to run the business.
- Obtain an EIN: An Employer Identification Number (EIN) is a unique identifier assigned by the IRS. You will need an EIN to open a bank account, hire employees, and file taxes.
Starting an LLC in Illinois can be a complex process, but by keeping these key considerations in mind, you can make sure you are on the right track. It is important to consult with an attorney or accountant to ensure that you comply with all the legal and tax requirements.
Opening an LLC in Illinois can seem daunting, but it’s a crucial step towards starting your own business. By understanding the costs, files needed, and important considerations, you can ensure that you are on the right track to forming your LLC.
Illinois has a robust business climate, and starting an LLC can offer many benefits, such as limited liability protection, tax flexibility, and ease of management. With the right planning, support, and resources, you can set your LLC up for success and make your business dreams a reality. So take the first step, and begin your journey towards entrepreneurship today.
For more information on starting an LLC in Illinois, be sure to visit other resources on our website. Our articles on the various steps involved in forming an LLC, as well as information on the benefits of an LLC, can provide you with the information you need to make informed decisions about your business.
Additionally, our guides on registering for taxes, obtaining an EIN, and creating an operating agreement can help you navigate the legal requirements of starting an LLC in Illinois. Whether you’re just starting out or looking to expand an existing business, forming an LLC in Illinois can be a great choice. For more information and support as you begin this process, be sure to visit our website and take advantage of our comprehensive resources.
Legal Disclaimer: This article contains general legal information, does not constitute professional legal advice for your situation, and should not be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed in your jurisdiction.
Where Do I Even Begin with Starting a Business?
This depends on where you’re at in your journey.
Step 1 is deciding what type of business you want to start.
Step 2 is filling out the BizBuddy Pathway for your business.
Step 3 is legally forming your business.
Check out the FAQs below that match up with where you’re at in your process
What Type of Business Should I Start?
If you’re unsure of what kind of business you want to start, you need to assess your situation. Things like your skills, available time, passion(s), money, and risk tolerance all factor into your decision. This post on What Business to Start is a great place to assess your situation and find the right fit for your unique situation.
What is the BizBuddy Pathway?
Research says that 92% of people with a business idea will never start a business. There are no shortages of ideas… execution is the scarce resource. The BizBuddy Pathway is a simplified approach for you to lay out your business journey.
Think of it like writing a book. The Pathway is like coming up with the title, storyline, and chapters, so you have the outline of where to begin. This is how you become the 8%.
How Do I Legally Form a Business?
It’s not as difficult as you think. That’s because in the U.S. small businesses accounted for 62% of all new jobs created between 1995 and 2020. That’s why you hear people say small business is the backbone of the economy. Check out this Guide on How to Legally Form a Business (in the U.S.). It will give you a full understanding of what goes into forming your legal entity and the options available to you. If you’re unfamiliar with terms like “Piercing the Corporate Veil” you’ll want to check out that guide.
How Do I Grow My Business?
Congrats. You’re already in the game and looking to grow. BizBuddy was founded by Eric Worral who started his first business at 13 years old (sealing driveways). That was well over 20 years ago when he had to figure out how to get new customers. No matter what business you’re in you need paying customers. This is a Guide on How to Get More Customers for Your Business. It’s a comprehensive overview of how to think about your category of business and the marketing strategies to implement. Onward and Upward!