How to Start an LLC in Illinois in 2026: Filing, Annual Report, Series LLCs and First-Year Cost

Illinois is a fairly cheap state to form an LLC in and a slightly more expensive one to keep it in. You file articles of organization with the Secretary of State, pay $150, and pay $75 every year after that for the annual report. The details that trip people up are a strict naming rule, a penalty that starts 60 days after a missed report, and a separate state tax that multi-member LLCs pay at the company level. This guide walks a first-time founder through each step in order, covers Illinois's series LLC option, and ends with a worked first-year budget. Every fee was checked against the Illinois LLC Act and Secretary of State material in October 2026.

Quick answer

To start an LLC in Illinois, file articles of organization (Form LLC-5.5) with the Illinois Secretary of State and pay $150 (or $250 in total for 24-hour online service). Name a registered agent with an Illinois street address. Then file a $75 annual report before the first day of your anniversary month every year.

• The name must include LLC, L.L.C. or limited liability company, and cannot use Corp., Inc., Ltd. or Co.

• Series LLC articles cost $400, plus $50 per series

• Annual report filed more than 60 days late: $100 penalty

• Multi-member LLCs pay the 1.5% replacement tax on net income

• Registering with the Department of Revenue is free; city licences are separate

What an Illinois LLC is and who should form one

An Illinois limited liability company is created under the Limited Liability Company Act, 805 ILCS 180. Like an LLC anywhere, it keeps the company's debts and lawsuits with the company, so a supplier's claim or a customer's lawsuit does not reach your house or personal savings just because you own the business. That protection depends on behaving like a separate business: a dedicated bank account, contracts signed in the LLC's name and records of money moving in and out.

The Illinois Secretary of State's Department of Business Services keeps the register. You search names, file the articles, file annual reports and order certificates of good standing through its website. Private companies that send letters offering to "file with the state" for you are not the Secretary of State, and they charge well above the statutory fee.

For federal tax, an LLC with one owner is a disregarded entity and an LLC with two or more owners is a partnership, unless you elect to be taxed as a corporation. Illinois follows that classification. An LLC suits most small businesses in the state: contractors, consultants, online sellers, salons, food businesses, landlords and small shops. You do not need to live in Illinois or be a US citizen to own one, but you do need a registered agent at an Illinois street address. Licensed professionals such as doctors, dentists, lawyers and accountants may have to form a professional LLC under the Professional Limited Liability Company Act instead, with licensing approvals from the relevant board, so check that before you file.

If your business actually runs in another state, an Illinois LLC does not let you avoid that state's rules. You would register there as a foreign LLC as well, so the simplest rule is to form where you work.

Illinois LLC at a glance (2026)

$150

Articles of organization

805 ILCS 180/50-10

$250

24-hour online filing

total, including expedite

$75

Annual report

due before anniversary month

$400

Series LLC articles

plus $50 per series

Step 1: Choose a name that meets the Illinois rules

Section 1-10 of the LLC Act sets the naming rules, and they are stricter than in many states. The name must contain "limited liability company", "L.L.C." or "LLC". It must not contain "Corporation", "Corp.", "Incorporated", "Inc.", "Ltd.", "Co.", "Limited Partnership" or "L.P.", because those suggest a different kind of entity. That catches people out: a name like "Prairie Paint Co. LLC" is rejected in Illinois even though it would pass in some neighbouring states.

The name must also be distinguishable on the Secretary of State's records from every existing LLC, corporation, reserved name and registered assumed name. Adding or dropping "limited", "company", an article such as "the", or changing singular to plural does not make a name distinguishable. Words such as "trust", "bank" or "insurance" need approval from the relevant regulator first. Search the Secretary of State's business entity database before you commit to a logo or domain. Our LLC name checker helps you test variations quickly.

If you are not ready to file, you can reserve a name for 90 days for $25. Most founders skip this and file the articles directly, since a reservation costs money and only holds the name for three months.

If you want to trade under a different name, for example "Prairie Paint" without the LLC ending, file an assumed name application with the Secretary of State. The fee runs on a sliding scale that depends on where the year falls in Illinois's five-year renewal cycle ($120 for applications filed in 2026), and renewal costs $150. Our DBA guide explains how assumed names work across states.

Step 2: Appoint a registered agent

Every Illinois LLC must have a registered agent and a registered office in Illinois at all times. The agent receives lawsuits, subpoenas and official notices on the company's behalf. The registered office must be a street address in Illinois; a post office box alone is not accepted. The agent can be an Illinois resident, including a member, manager or employee of the LLC, or a business entity authorised to act as agent in Illinois. The LLC cannot name itself.

Many single-owner businesses use the owner's home or shop address. That works if someone is reliably there during business hours, but it puts that address on the public record. Owners who live outside Illinois, travel a lot, or want to keep a home address private often pay a commercial agent instead, typically somewhere around $50 to $300 a year (an estimate based on published price lists of national agent services, not an official figure).

If your agent resigns, Illinois gives you 60 days days to appoint a new one before the company falls into default, and changing the agent later costs $25. Our Illinois registered agent guide covers the rules in detail, including how service of process works if no agent can be found.

Step 3: File the articles of organization

The articles of organization (Form LLC-5.5) bring the LLC into existence. You can file online through the Secretary of State's website or on paper. Online filing is faster, and the Secretary of State lists two speeds: standard processing at $150, which takes about 10 business days, and 24-hour service at $250 in total. Card payments carry a processing fee on top, and the Secretary of State does not accept cash.

The form asks for the LLC's name, the principal place of business, the registered agent and registered office, the purpose, whether the LLC is managed by its members or by managers, the names and addresses of the managers or members, and the organizer's signature. The purpose can be broad; most filers state that the LLC may carry on any lawful business permitted under the Act. You can also choose a later effective date, which some owners use to start the LLC on January 1 so the first tax year is clean.

Filing Form LLC-5.5 online

1. 1

   Check the name

   Search the Secretary of State's business entity database and confirm the name meets 805 ILCS 180/1-10.

2. 2

   Line up the registered agent

   Get written agreement from the person or company and confirm the Illinois street address.

3. 3

   Decide member-managed or manager-managed

   Member-managed suits most small owner-run businesses. Choose manager-managed if some owners will be passive investors.

4. 4

   File and pay online

   Pay $150 for standard processing or $250 for 24-hour service, plus the card processing fee.

   Tip: If you need the LLC by a set date, such as a lease signing, the 24-hour option is usually worth the extra $100.

5. 5

   Save the filed articles

   Download the stamped articles. Banks, landlords and the IRS will ask for them.

Why filings get rejected. The usual reasons are a name that breaks the ending rules or is too close to an existing name, a missing or out-of-state registered office, a P.O. box as the office address, and the wrong fee. If the Secretary of State rejects your filing, fix the issue and resubmit; nothing is filed until the articles are accepted, so do not open a bank account or sign a lease in the LLC's name before then.

Series LLCs: when they make sense

Illinois is one of a minority of states that let you form a series LLC. A series LLC is a single company whose articles allow it to create separate series. Each series can hold its own assets, have its own members and managers, and keep its own liabilities, so a claim against one series should not reach the assets of another. The protection only holds if each series keeps separate records and accounts, and the articles say the series are limited in this way.

Illinois charges $400 for series articles instead of the standard $150. Each series that you want recognised gets a certificate of designation at $50, and the annual report then costs $75 plus $50 for every series with a certificate of designation on file.

The main drawback is practical. Some banks, title insurers and lenders are unfamiliar with series and want each series to have its own EIN and account, and not every state recognises the separation if a series does business there. For two or three rental properties, many owners find separate standard LLCs simpler. Talk to an Illinois lawyer before choosing a series structure for a large portfolio.

Step 4: EIN, operating agreement and bank account

EIN. Apply for an employer identification number from the IRS once the articles are accepted. It costs Free ($0) and the online application gives you the number at the end of the session. You need it to open a bank account, hire staff and register with the Illinois Department of Revenue. Our EIN application guide walks through each screen.

Operating agreement. Illinois does not require you to file an operating agreement, but the LLC Act lets one set most of the rules: how profit is shared, who can sign contracts, how a member leaves and what happens on death or divorce. Without one, the Act's default rules apply. A single-member LLC should still have a short agreement, because banks ask for it and courts look at it when deciding whether the company is genuinely separate from you.

Bank account. Open a business account in the LLC's name using the filed articles, the EIN letter and the operating agreement. Pay business costs only from that account and pay yourself by transfer; our guide on how to pay yourself from an LLC explains draws versus salary.

Beneficial ownership reporting. Since FinCEN's March 2025 interim final rule, companies formed in the United States do not file beneficial ownership information reports, so a new Illinois LLC has no BOI filing (current position: Not required for US-formed companies).

The annual report and keeping the LLC in good standing

Every Illinois LLC files an annual report with the Secretary of State. It confirms the registered agent and office and lists the managers or members, and it is due before the first day of your anniversary month, the month in which the articles were filed. An LLC formed in June files before June 1 each year from the following year. The Secretary of State sends a reminder, but the duty to file is yours whether or not the notice arrives.

An Illinois LLC's first two years

Day 1

Articles of organization accepted ($150)

Week 1

EIN, bank account and Illinois Department of Revenue registration

Before the 1st of the anniversary month

First annual report due ($75)

More than 60 days late

$100 late penalty added

Continued delinquency

Administrative dissolution; reinstatement costs $200 plus all missed reports

Filing more than 60 days after the due date adds a $100 penalty, and a further $100 accrues for each later year of delinquency. If the report stays unfiled, the Secretary of State administratively dissolves the LLC, which strips away the good standing that banks and landlords check. Once the LLC has been dissolved, you cannot file the annual report online; you have to reinstate. Reinstatement costs $200 plus every unfiled annual report and penalty, and the Secretary of State's instructions cap the back reports you include at six years.

You also amend the articles, for $50, if you change the LLC's name, switch between member and manager management, or add series provisions. A change of address or agent goes on its own statement of change rather than an amendment. If a bank or a government contract asks for proof that the LLC is active, order a certificate of good standing; our certificate of good standing guide explains how.

Licences and tax registration after you form

The Secretary of State's filing makes the LLC exist. It does not give you permission to trade, and nothing is passed on automatically to the agencies below.

Department of Revenue. If you sell taxable goods, hire employees or owe other state taxes, register through MyTax Illinois (Form REG-1). Registration costs no fee. Illinois's state sales tax rate is 6.25%, and local add-ons push the combined rate to 10.5% in Chicago. Our Illinois sales tax guide covers rates, filing frequency and the retailer's discount.

City and county licences. Illinois has no general state business licence, but many cities do. Chicago, for example, charges $500 for a two-year Limited Business License. Professions such as contractors in some cities, cosmetologists, real estate brokers and food businesses also need licences from the Department of Financial and Professional Regulation, the health department or the city. Our Illinois business license guide compares Chicago, Cook County and other local requirements.

Employees. Hiring staff means registering for withholding with the Department of Revenue, for unemployment insurance with the Illinois Department of Employment Security, and buying workers' compensation insurance. Our guide to hiring your first employee covers the federal steps.

How Illinois LLC owners are taxed

A single-member LLC owned by a person is ignored for income tax. The profit goes on the owner's federal Schedule C and Illinois Form IL-1040, taxed at the flat individual rate of 4.95%. The LLC itself pays no Illinois income tax and no franchise tax; franchise tax applies to corporations only, which is one of the reasons small Illinois businesses often prefer an LLC.

A multi-member LLC taxed as a partnership files Form IL-1065. The partnership pays no Illinois income tax itself, but it does pay the personal property replacement income tax at 1.5% of its net income. The members then pay 4.95% individual income tax on their shares. The same 1.5% replacement tax applies if the LLC elects S corporation treatment, while an LLC taxed as a C corporation pays corporate income and replacement tax instead. Partnerships and S corporations can also elect the Illinois pass-through entity tax, which moves the 4.95% tax to the entity level and gives the owners a credit; it mainly helps owners who itemise federal deductions, so ask your accountant whether it is worth it.

Federal self-employment tax applies to the profit of members who work in the business. Once profits are steady, an S corporation election can reduce it by splitting income between a reasonable salary and distributions, at the cost of running payroll and adding the replacement tax for a single-owner LLC that would otherwise pay none. Read LLC vs S corp before you elect.

What it costs: a worked first-year budget

The table shows three realistic Illinois LLCs. State fees are statutory. The registered agent line is a market estimate, and the city licence line uses Chicago's fee for a business that needs a Limited Business License; many towns charge less, and some charge nothing.

What the table leaves out. Insurance, an accountant, professional licences and any trade-specific permit sit on top. A Chicago food business, for example, pays a retail food establishment licence instead of the general licence, with fees that depend on floor area, and needs a health inspection before opening.

Year two onwards. The state charge is just the $75 annual report. Over five years, a standard Illinois LLC therefore costs $150 plus four reports, or $450 in state fees. That is less than in Massachusetts, where the annual report alone is $500, and more than in Ohio, which charges no annual state fee at all.

Worked examples

A Peoria IT consultant. Marcus files articles online on March 3, 2026 and pays $150 for standard processing. He names himself as registered agent at his Peoria office, which is open weekdays. The articles are approved within two weeks, and he gets an EIN the same afternoon. He sells only services, so he has no sales tax account, and Peoria does not require a general business licence for his work. His first annual report is due before March 1 of next year. He sets a calendar reminder for early February, since filing even a day late puts the LLC out of good standing and more than 60 days late adds the $100 penalty.

A Chicago gift shop owned by two sisters. Ana and Rosa reserve "Lakeview Gift Collective LLC" for $25 while they negotiate a lease, then file the articles for $150 once the lease is agreed. They register with the Department of Revenue for sales tax at no cost and apply for a Chicago Limited Business License at $500 for two years. Because they are a two-member LLC, the company files Form IL-1065 each year and pays the 1.5% replacement tax on its net income. If the shop makes $60,000 of net income, the replacement tax is $900, and each sister then pays 4.95% on her $30,000 share.

A Texas landlord buying three St. Louis Metro East rentals. Dev lives in Austin and wants each house separated from the others. He files series articles for $400 with 24-hour processing and adds three certificates of designation at $50 each. His annual report will cost $75 plus $150 for the three series. He hires a commercial registered agent in Illinois because he has no Illinois address, and he opens a separate bank account for each series so the separation holds up.

Illinois LLC launch checklist

0/8

• Name checked against 805 ILCS 180/1-10 and the Secretary of State database
• Registered agent agreed, with an Illinois street address
• Articles of organization (Form LLC-5.5) filed and saved
• EIN issued and operating agreement signed
• Business bank account opened in the LLC's name
• MyTax Illinois registration if you sell taxable goods or hire staff
• City or county licence and any professional licence in place
• Annual report due date in your calendar

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Common mistakes and how to fix them

Using a banned word in the name. "Co.", "Ltd." and "Inc." are not allowed in an Illinois LLC name, even alongside "LLC". If your preferred name uses one, drop it before filing or trade under an assumed name instead.

Treating the annual report as optional. Illinois does not send a bill you must pay before anything happens; the report is simply due. Miss it and the penalty starts after 60 days, then the LLC is dissolved. Put the due date in your calendar the day you form, and keep the registered agent's address current so the reminder reaches you.

Forgetting the replacement tax. Multi-member LLCs sometimes assume that, because they are pass-through entities, Illinois collects nothing from the company. The 1.5% replacement tax is an entity-level tax on the IL-1065, and missing it brings penalties and interest.

Skipping the city licence. The Secretary of State does not notify your city. Trading in Chicago without the right licence can bring fines and a forced closure until you are licensed.

Paying look-alike mailers. Private companies send official-looking letters offering certificates or annual report filing at several times the state's price. The annual report costs $75 when you file it yourself on the Secretary of State's website.

Official links

• Illinois Secretary of State — form an LLC online$150 standard, $250 24-hour
• Illinois Secretary of State — LLC annual report$75, due before your anniversary month
• Guide for Organizing Domestic LLCs (C-334)Registered agent and filing rules
• 805 ILCS 180/50-10 — LLC feesStatutory fee list
• Illinois Department of Revenue — business tax ratesReplacement tax rates
• IRS — Apply for an EINFree

What to do next

Check your name with our LLC name checker, then file the articles and get your EIN on the same day. Before you open, line up the Department of Revenue registration and any city licence, and price your first year with the startup cost calculator. If you are still comparing states or entity types, our LLC registration guide and LLC vs sole proprietorship explainer cover the wider choices.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How much does it cost to start an LLC in Illinois?

The Secretary of State charges $150 to file articles of organization under 805 ILCS 180/50-10, or $250 in total if you want 24-hour online processing. A series LLC costs $400. After that, every LLC files a $75 annual report each year. The EIN is free and so is registering with the Illinois Department of Revenue, but a city licence, such as Chicago's, can add several hundred dollars.

How long does it take to form an LLC in Illinois?

Standard online filings are processed in about 10 business days, according to the Secretary of State's online filing instructions. Paying the expedited fee, for a total of $250, gets a 24-hour review, excluding weekends and holidays. Paper filings by mail take longer. Once the LLC exists you can get a free EIN from the IRS online the same day.

When is the Illinois LLC annual report due?

It is due before the first day of your LLC's anniversary month, which is the month the articles were filed. The fee is $75, plus $50 for each series that has a certificate of designation. File more than 60 days late and a $100 penalty applies. A report that stays unfiled long enough leads to administrative dissolution.

Can I be my own registered agent in Illinois?

Yes. Any adult Illinois resident can act as registered agent, including a member, manager or employee of the LLC, as long as the registered office is a street address in Illinois where they can receive legal papers during business hours. A post office box is not accepted, and the LLC cannot name itself. Non-residents usually hire a commercial agent.

Does an Illinois LLC pay franchise tax?

No. Illinois franchise tax applies to corporations, not LLCs. A single-member LLC owned by a person pays no entity-level income tax; the owner pays the 4.95% individual rate. A multi-member LLC taxed as a partnership pays the 1.5% personal property replacement income tax on its net income, while the members pay individual income tax on their shares.

What is an Illinois series LLC?

A series LLC is one company that can hold separate series, each with its own assets, members and liabilities, if the articles say so and the records are kept separately. Illinois charges $400 for series articles and $50 for each certificate of designation. Real estate investors use them to keep each property's risks apart.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.805 ILCS 180/50-10 — Limited Liability Company Act fees — Illinois Compiled Statutes (text via FindLaw) · accessed 9 October 2026
2. 2.805 ILCS 180/1-10 — Limited liability company name — Illinois Compiled Statutes (text via FindLaw) · accessed 9 October 2026
3. 3.805 ILCS 180/50-15 — Penalty — Illinois Compiled Statutes (text via FindLaw) · accessed 9 October 2026
4. 4.Information for Forming an LLC Online — Illinois Secretary of State · accessed 9 October 2026
5. 5.Information for Filing an LLC Annual Report Online — Illinois Secretary of State · accessed 9 October 2026
6. 6.Guide for Organizing Domestic Limited Liability Companies — Illinois Secretary of State · accessed 9 October 2026
7. 7.What is the tax rate for businesses, trusts, and estates? — Illinois Department of Revenue · accessed 9 October 2026
8. 8.Payroll Bulletin 1-26 — Illinois State Income Tax Exemptions 2026 — Illinois Office of Comptroller · accessed 9 October 2026
9. 9.Do I need to register my business with the Illinois Department of Revenue? — Illinois Department of Revenue · accessed 9 October 2026
10. 10.Business License Fee Updates, effective January 1, 2026 — City of Chicago, BACP · accessed 9 October 2026
11. 11.Get an employer identification number — IRS · accessed 9 October 2026
12. 12.Beneficial Ownership Information — FinCEN · accessed 9 October 2026