How to Form an LLC in Illinois | 2025 Guide

Illinois is home to over 1.3 million small businesses, making it one of the most entrepreneur-heavy states in the Midwest¹. The businesses range from tech startups to family-run farms downstate, and many of them are structured as Limited Liability Companies (LLCs)—and for good reason.

In this guide, we’ll teach you how to form an LLC in Illinois, step by step, so you can protect your personal assets, stay compliant with state regulations, and start conducting business with confidence. We'll also discuss the Wise Business account. The global account that can help your company with all things cross-border.

Do you send and receive global payments?

Try Wise Business >>

Wise Trustpilot Score: 4.3 stars on 230,000+ reviews
No minimum balance requirement and no monthly fees
Integrates with QuickBooks, Xero, Sage, and more

How to Start an LLC in Illinois (Step-by-Step)

Step 1: Choose a Name for Your LLC

Your business entity must have a unique name that complies with Illinois naming rules. It must include “Limited Liability Company,” “LLC,” or “L.L.C.” and must not be deceptively similar to any existing entity on file with the Illinois Secretary of State.

To check name availability, use the name search tool on the Illinois Secretary of State website². If your name is available but you're not quite ready to file, you can reserve it for 90 days for a $25 fee.

Step 2: Appoint a Registered Agent

Every domestic LLC in Illinois must designate a registered agent—a person or company authorized to receive legal documents and government correspondence on behalf of your business. The agent must have a physical business address in Illinois and be available during business hours.

You can act as your own agent, appoint another individual, or use a registered agent service. Many small business owners choose a professional service to ensure compliance and privacy.

Step 3: File Your Illinois Articles of Organization

To officially form your LLC, you must file Articles of Organization (Form LLC-5.5³) with the Illinois Secretary of State. You can file online or by mail.

Required information includes:

• LLC name and principal business address.
• Registered agent name and Illinois address.
• Purpose of the business (can be general).
• Names and addresses of the LLC’s managers or members.
• Whether it’s a single-member or multi-member LLC.

Filing fees: $150 (plus $100 for expedited service, if needed). After approval, your LLC will be considered a legally recognized business entity in the state.

Step 4: Create an Operating Agreement

Although not required by Illinois law, drafting an Operating Agreement is highly recommended. This document outlines the internal rules of your LLC, including ownership percentages, voting rights, profit-sharing, and exit strategies.

Even for a single-member LLC, having this agreement helps prove your business operates as a separate legal entity, which is important for protecting your personal assets in case of legal action.

Step 5: Apply for a Federal Employer Identification Number (EIN)

An EIN is a nine-digit number issued by the IRS that identifies your LLC for federal tax purposes. It’s required if you plan to hire employees, open a business bank account, or file federal taxes as a multi-member LLC or as a corporation.

Apply for your EIN directly through the IRS website⁴ at no cost.

Step 6: Register for Illinois State Taxes

If your LLC will collect sales tax, hire employees, or be subject to industry-specific taxes, you must register with the Illinois Department of Revenue via MyTax Illinois⁵.

Common state taxes include:

• Sales tax (if you sell goods).
• Withholding tax (if you have employees).
• Personal property replacement tax (may apply depending on structure).

Step 7: Obtain Local Business Licenses or Permits

Depending on your industry and location, your LLC may need city or county licenses to legally conduct business. Requirements vary, so check with your local municipality or use services that specialize in license research.

Step 8: File Annual Reports

All Illinois LLCs must submit an annual report to the Illinois Secretary of State. The report updates member information and confirms the LLC is still active.

• Due: Before the first day of your LLC’s anniversary month.
• Fee: $75.
• Filing: Online or by mail.

Failure to file may result in late fees or administrative dissolution.

---

Save Time and Hassle With Wise Business

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. Wise makes it easy to send, hold, and manage business funds in currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. Simply add the local account details when billing international customers to receive international payments with no fees.

Account opening is 100% online, with no need to visit a branch or book appointments.

Once you’re set up, you can connect to software such as Wave, FreshBooks, and more. You can also withdraw funds from Stripe without currency conversion fees.

Open a Wise Business account online

Some key benefits of Wise Business include:

Major local account details to receive international payments with ease No monthly account fees just a simple one-off fee for account details Receive payments from e-commerce platforms such as Amazon or via Stripe. Free invoicing tool to generate and send invoices. Create invoices using the Wise invoice generator or invoice templates. Accounting integrations, including a QuickBooks Bill Pay connection. Bill payments will be synced, matched, and categorized in QuickBooks for simple reconciliation. Access to BatchTransfer. Fast payment of up to 1,000 people.

---

What Are the Business Requirements for an Illinois LLC?

To remain compliant as a domestic LLC in Illinois, you must:

• Maintain a physical business address in the state or designate a registered agent with one.
• File the Articles of Organization and pay the appropriate filing fees.
• Create and retain an Operating Agreement (optional but highly recommended).
• Apply for a federal EIN.
• File an annual report every year.
• Comply with applicable state and local tax obligations.

Any LLC with employees must meet certain federal and state employment law requirements, including unemployment insurance and workers’ compensation.

What Are the Benefits of Starting an LLC in Illinois?

Illinois offers several advantages for LLC formation:

• Limited liability protection: Your personal assets are shielded from business debts and legal claims.
• Pass-through taxation: By default, Illinois LLCs don’t pay federal tax at the entity level—profits and losses pass through to members' personal tax returns.
• Flexible structure: You can run a single-member LLC or a multi-member LLC, managed either by members or appointed managers.
• Affordable filing costs: At $150, Illinois offers a mid-range fee structure.
• No publication requirement: Unlike some states, Illinois doesn’t require you to publish notice of your LLC formation.

While Illinois doesn’t have the lowest sales tax (the statewide base rate is 6.25%), it does offer a balanced regulatory environment that’s favorable to small business owners.

How Much Does It Cost to Start an LLC in Illinois?

Your total startup cost will vary based on the services you choose.

Expense	Cost
Articles of Organization Filing Fee	$150
Name Reservation (optional)	$25
Annual Report	$75/year
Registered Agent Service (optional)	$100–$300/year
Expedited Filing (optional)	+$100

Can I Open an LLC in Illinois Without Living There?

Yes, Illinois allows nonresidents to form and operate an LLC. You do not need to be a resident or U.S. citizen to start a business entity in the state.

You will need to appoint a registered agent with a physical Illinois address and be prepared to file the required documents, including your Illinois Articles of Organization and annual reports.

Can a Nonresident Open a Company in Illinois?

Absolutely. Illinois does not impose citizenship or residency requirements for LLC members or managers. Nonresidents, including foreign nationals, can:

• Form a domestic LLC in Illinois.
• Use a registered agent service for their Illinois business address.
• Obtain a federal EIN.
• Register for state taxes, including sales tax if applicable.

This makes Illinois a practical option for entrepreneurs based outside the state or country who want to conduct business within Illinois.

Send Fast and Secure International Business Payments - See Rates Below

---

Comparison with Other States

Here’s how Illinois compares to three nearby states when it comes to LLC formation:

Feature	Illinois	Indiana	Wisconsin	Missouri
Formation Fee	$150	$95	$130	$50
Annual Report Fee	$75	$50	$25	$0
State Sales Tax Rate	6.25%	7%	5%	4.225%
Registered Agent Required	Yes	Yes	Yes	Yes
Nonresident Formation	Allowed	Allowed	Allowed	Allowed

Illinois offers a balanced business environment with mid-range startup costs and strong administrative support.

Indiana provides lower filing fees but slightly higher sales tax.

Wisconsin has a lower annual report fee but a slightly higher formation cost.

Missouri is the most affordable overall, especially for entrepreneurs seeking low overhead.

FAQs About Illinois LLCs

Are There Privacy Protections for Illinois LLCs?

Illinois requires the names of LLC members or managers to be listed on the Articles of Organization. There’s no anonymous filing option, although using a registered agent can help keep personal addresses off public records.

Why Do People Use Illinois for LLC Formation?

Illinois is a popular choice due to its central location, strong infrastructure, and access to major markets. It's ideal for businesses planning to conduct business in the Midwest or seeking reliable state administration through the Illinois Secretary of State’s office.

Is an Illinois LLC Tax-Free?

No. While an LLC avoids double taxation by default (pass-through tax structure), Illinois imposes:

• A Personal Property Replacement Tax on some LLCs.
• Sales tax, if applicable.
• Federal tax obligations based on IRS classification.

What Are the Disadvantages of an Illinois LLC?

There are a few drawbacks to forming an LLC in Illinois that you should consider before making a final decision:

• Higher filing fees compared to neighboring states.
• Annual report requirement adds compliance responsibility.
• Limited privacy, as ownership details are public.
• No centralized business licensing portal, requiring extra steps for industry or locality-specific permits.

Conclusion

An Illinois LLC provides legal structure, liability protection, and the flexibility to grow on your own terms. The Illinois Secretary of State makes the process accessible through online filing, and the state's balanced regulatory environment supports businesses across a wide range of industries.

Appoint a reliable registered agent, file your Articles of Organization accurately, and make sure you meet all state and local compliance requirements. Keep your business in good standing by filing your annual report and managing your tax obligations, including state sales tax if applicable.

Form an LLC in State
Idaho
Iowa

---

Sources

1. Small Business Profile: Illinois – SBA Office of Advocacy (2024)
2. Illinois Business Entity Search
3. Illinois Form LLC-5.5 – Articles of Organization (PDF)
4. Get an EIN – IRS
5. MyTax Illinois – Department of Revenue Portal