The most obvious advantage of forming a limited liability company is liability protection- protecting your personal assets. Even though other entities like a corporation can achieve the same goal, an LLC boasts a high level of simplicity, tax flexibility, and low cost to set up and this makes it the favorite business structure for small business owners. However, the cost for setting up an LLC is not similar in every state in the US because every state has its own requirements. 

Knowing what it costs to set up a limited liability company(LLC) in every state is a very crucial step in gearing your business in the right direction. Our site will walk you through all the necessary requirements and the cost to start an LLC in every state as well as the step-by-step process to start an Illinois LLC. We will start by looking at an Illinois LLC cost. Our guidelines apply to forming a Florida single-member LLC as well. 

Filing Requirements & Overall Illinois LLC Costs 

Forming an LLC in  Illinois and keeping it in good standing involves some necessary expenses. Most of the charges you may incur during LLC formation are due to various filings with the secretary of the state.  

Here are some of the most common LLC formation requirements and the cost of LLC in Illinois. 

Illinois LLC filing fee

To form an Illinois LLC, you have to file the articles of organization with the Illinois secretary of state during which you will have to pay a $150 state filing fee. 

The good news, Illinois offers expedited filing, but at a $100 additional fee. This means that your application will be prioritized and get completed early enough. Besides, if you want a certificate of good standing you will have to pay an additional $25. You can get their certificate of good standing by ordering through the secretary of state.

Registered Agent Fee

To form an LLC in Illinois, you will have to appoint a registered agent. A registered agent helps keep your business in compliance with state regulations by reminding you of important filing deadlines. This can be a third-party individual, a business entity, a member of your company, or yourself. If you decide to hire someone or an entity, be ready with $50 to $300 per year to get this service in Illinois. 

Illinois LLC annual report

You will have to file an Illinois LLC annual report at only a $75 state filing fee to keep your company up to date. You can submit the form through the Illinois Illinois Secretary of State [1] website or download and fill Form LLC-50.1 [2] and submit via email. These apply to foreign LLC filing as well. Illinois has a penalty of $100 for late filing- if it is not filed within 60 days of its due date. 

LLC Name Reservation Fee

If you have a nice name in mind and you are not ready to form an LLC, you can have the Illinois secretary of state reserve the name for 90 days prior to LLC formation. You can do this by filing Form LLC 1.15 [3] during which you will pay a $25 filing fee.

Application for Withdrawal (Foreign LLC)

To dissolve an LLC in Illinois, you will have to submit 2 duplicate copies of articles of dissolution which will cost a $100 filing fee. Though the processing of your filing can take up to 10 days, you can request expedited processing, in person in Chicago or Springfield. This comes at an additional cost. 

Business Licenses

Some businesses require licenses and permits in order to operate in Illinois. Depending on your geographical location or the type of business, you might need either a local, state or federal permit or license. 

The cost of a business license or permit in Florida will depend on your business requirements but is somewhere below $100.

Taxes

An Illinois LLC is considered a pass-through entity for tax purposes. With that said, every member will have to pay individual income tax. The income tax rate for a typical LLC is only1.5%. The self-employment tax rate is 15.3% and you will have to pay this towards social security and medicare. However, you can avoid it by having your LLC taxed as a corporation and pay a corporate tax at the rate of 7% (C-corp) or 2.5% (S-corp). 

Other LLC Filing Costs

In addition to the mandatory charges that have been discussed above, there are other optional filing fees associated with starting an LLC in Illinois.

LLC Name Reservation Fee

If you have a nice name in mind and you are not ready to form an LLC, you can have the Illinois secretary of state reserve the name for 90 days prior to LLC formation. You can do this by filing Form LLC 1.15 [4] during which you will pay a $25 filing fee.

“Doing Business As” (DBA) Name

If you are planning to run your Illinois LLC with a different name from your official business name, you’ll need to register a DBA. Simply file Form LLC-1.20 [5] with the Illinois secretary of state and pay a $25 filing fee in the process. Note that, this is the same form and the same amount you will incur when changing, canceling, or renewing the name. 

Business Domain Name & Website

A business domain name is the web address for your business website. You need to register a domain name for your Illinois LLC so that nobody else can use the same name. 

A domain name registration can cost you anywhere between $2 to $20 depending on special offers or discounts offered. However, newer domain name extensions such as apps. may go beyond this range. 

Articles of Organization Fee

You cannot start your Illinois LLC without filing articles of organization. This is the main cost involved in forming Illinois LLC. It only cost $150 to file Illinois articles of organization with the secretary of state.

Attorney Fees

 If you don’t understand a concept and you have a question concerning Illinois LLC, you should consult an attorney. To get the right attorney in Illinois, you can take advantage of an online database of lawyers such as Avvo to help you sort them out by location, specialties, rates, and more. Attorney charges vary depending on experience and location, but you should expect something between $500 – $2,000 flat fee or $150 – $350 hourly fees. 

Tax ID Number (EIN)

An EIN  is essentially a social security number for an organization. You will have to get an EIN to help you open an account, file and manage federal state taxes, and hire employees. You can get an EIN for your Illinois LLC for free from the IRS by applying online.

The Top 2 Illinois LLC Services

ZenBusiness

You will need a proper LLC formation service if you want to form your company with peace of mind. Zenbusiness will help you prepare and file your articles of organization with the secretary of state and relieve you from the task of preparing and filing annual reports. The company offers a worry-free guarantee feature that includes preparation and filing of your annual report and will update you on the important deadlines, help you regain a missed deadline among other services. 

Their biggest win is their pricing, particularly the lower package. Despite their cheaper packages, you will have a 1-year free registered agent service for free. ZenBusiness also includes more LLC formation features than any other service you will come across out there. For that reason, the company boasts the best customer feedback [6]

IncFile

Another outstanding professional service that will help you form your LLC in Illinois with peace of mind is IncFile. It has remained one of the most sought-after business formation services due to its pricing, particularly the basic formation package. 

 Despite their low basic formation pricing, they offer a 1-year free registered agent service in all their packages. 

Other services offered in addition to preparation filing of an article of the organization include name search, preparation of an operating agreement, obtaining an EIN, company alerts on annual report deadline, licenses, statement of formation among others. The company also boasts a 1-day processing speed and great customer support.

For that reason, they have one of the best online feedback [7] among users. 

How to Start an LLC in Illinois 

  1. Name Your Illinois LLC
  2. Choose Your Registered Agent
  3. File Articles of Organization
  4. Prepare an Operating Agreement
  5. Obtain an EIN
  6. File Annual Reports

Step 1: Name Your Illinois LLC

Choose an LLC name that is available for use in the state of Illinois, available as a web domain, and meets other Illinois state requirements. To achieve that, you will have to conduct a thorough online and business database name search. 

Step 2: Choose Your Registered Agent

Illinois LLCs are required to appoint a registered agent that will receive important documents on behalf of the company. A registered agent can be an entity, a third-party individual, a member of your company, or yourself. An Illinois registered agent must be over 18 years and based in the state. 

Step 3: File Articles of Organization

You need to file articles of organization with the Illinois secretary of state in order to form your LLC in the state. You can file Florida articles of organization online or download the form and send it via email along with state fees. Once done, Mail the form to the Illinois Department of Business Services, Limited Liability Division 501 S 2nd Street, Room 351, Springfield, IL 62756.

Step 4: Prepare an Operating Agreement

An LLC operating agreement is not a mandatory requirement for Illinois LLC formation but it is very important as it lists down how your business is managed and the members of your company. In essence, operating agreements for LLCs are equivalent to the board of directors in corporations.

Step 5: Obtain an EIN

Employer Identification Number (EIN), is like your company’s social security and it is very important. You will need an EIN to open a business bank account, file and manage federal tax as well as hire employees in Illinois. You can download an EIN form from the IRS website for free.  

Step 6: File Annual Reports

The Illinois secretary of state has to keep up-to-date business records. They do this by ensuring Illinois LLCs file annual reports with the secretary of state during which they pay the annual report filing fees. 

Conclusion 

Illinois LLC cost is not the best but not the worst at the same time. Their average LLC cost is appealing for an Illinois-based business looking to form an LLC. The state income tax charges are also very friendly and favorable to a small business as well.

Frequently Asked Questions

Do LLCs have annual fees?

You will have to incur some annual filing fees to keep your company in compliance with the state. These include annual report fees and renewal fees for some services registered agents.  service also requires annual renewal fees.

Is an LLC really necessary?

Though it is not a must you have to form an LLC when starting a business, for many businesses, the benefits that come with forming an LLC outweigh the hassle and the cost of setting up one by yourself

How is an LLC taxed in Illinois?

Normally, an Illinois LLC is treated as a pass-through entity and every member has to pay individual income tax. An LLC in itself is not taxed in Illinois unless you decide to have your company taxed as a corporation. LLC members will have to pay self-employment tax towards social security and medicare as well as sales if your LLC sells merchandise.

What is the cheapest way to get an LLC?

The cheapest way to start your LLC is to file the articles of the organization with the secretary of state by yourself. This will leave you with only state filing fees to worry about.

Should I form my LLC in Illinois, or choose a state like Nevada or Wyoming?

For an Illinois-based business, it is worth forming your LLC within the state. Forming a foreign LLC in business-friendly states like Nevada and Wyoming will mean you will have to register another LLC.


+ 7 sources

  1. www.cyberdriveillinois.com. (n.d.). LLC Annual Report. [online] Available at: https://www.cyberdriveillinois.com/departments/business_services/annual_reports/llc_instructions.html [Accessed 27 Jul. 2021].
  2. ‌Illinois Limited Liability Company Act Annual Report. (2018). [online] . Available at: https://www.cyberdriveillinois.com/publications/pdf_publications/llc501.pdf [Accessed 27 Jul. 2021].
  3. ‌Illinois Limited Liability Company Act a) Application to Reserve a Name b) Transfer of Reserved Name c) Cancellation of Reserved Name APPLICATION TO RESERVE A NAME NOTICE OF TRANSFER OF RESERVED NAME. (2012). [online] . Available at: https://www.cyberdriveillinois.com/publications/pdf_publications/llc115.pdf [Accessed 27 Jul. 2021].
  4. ‌Illinois Limited Liability Company Act a) Application to Reserve a Name b) Transfer of Reserved Name c) Cancellation of Reserved Name APPLICATION TO RESERVE A NAME NOTICE OF TRANSFER OF RESERVED NAME. (2012). [online] . Available at: https://www.cyberdriveillinois.com/publications/pdf_publications/llc115.pdf.
  5. ‌Anon, (2021). [online] Available at: [Accessed 10 Sep. 2021].
  6. Trustpilot. (2021). ZenBusiness. [online] Available at: https://www.trustpilot.com/review/www.zenbusiness.com [Accessed 27 Jul. 2021].
  7. Shopperapproved.com. (2016). IncFile.com Reviews | Shopper Approved. [online] Available at: https://www.shopperapproved.com/reviews/IncFile.com [Accessed 27 Jul. 2021].