Fees
Illinois LLC formation costs
$150 Articles of Organization + $75/yr Annual Report = ~$225 first-year cost (before registered agent service) — mid-tier cost Midwest commercial formation hub
| Fee | Amount | Notes |
|---|---|---|
| Articles of Organization filing fee | $150 | One-time state filing fee payable to the Illinois Secretary of State. Higher than Wyoming ($100), Texas ($300 for domestic), and Delaware ($90), but lower than California ($70 + $800 franchise) on a first-year basis. Online filing via ilsos.gov. |
| Annual Report fee | $75/year | Due by the first day of the LLC's anniversary month each year. A $100 late penalty applies for filings received after the due date. File online at ilsos.gov. Most straightforward annual obligation in the Midwest commercial hub market. |
| Chicago BACP Business License | Varies by business type | Required for most businesses physically operating in Chicago. Fees range from ~$75 to several hundred dollars depending on business category and gross receipts. Certain home-based and low-revenue businesses qualify for reduced fees or exemptions. Register at chicago.gov/bacp. |
| Name reservation (optional) | $25 | Reserves the LLC name for 90 days via the Illinois Secretary of State portal. Optional — most filers proceed directly to filing Articles of Organization once name availability is confirmed. |
| EIN application | Free | IRS Form SS-4 — free online at irs.gov/ein. No state fee. |
Affiliate slot
Form your LLC with a service
LLC formation services — Bizee primary placement.
Requirements
What you need to know before filing
- Name must contain 'LLC', 'L.L.C.', 'Limited Liability Company', or 'Limited Liability Co.' — Illinois accepts any of these designators.
- A registered agent with an Illinois street address (no PO boxes) must be maintained at all times. Illinois residents may self-serve as RA; out-of-state owners typically use a commercial RA service ($50–$150/yr).
- Articles of Organization are filed with the Illinois Secretary of State (ilsos.gov). Member names ARE required on the public Articles for member-managed LLCs; manager names for manager-managed LLCs.
- An Operating Agreement is not filed with the state but is required by Illinois law — the Illinois LLC Act (805 ILCS 180) mandates that members adopt an Operating Agreement.
- Illinois LLCs must file an Annual Report each year by the first day of the anniversary month. Filing fee: $75. A $100 penalty applies for late filings.
- An EIN from the IRS is required to open a business bank account and for federal tax filing.
- Illinois imposes no franchise tax on LLCs, but LLCs operating as corporations (C-corp or S-corp election) are subject to the Illinois Personal Property Replacement Tax (PPRT) at 1.5% of federal taxable income.
- Chicago-based LLCs must separately register with the City of Chicago Department of Business Affairs and Consumer Protection (BACP) and obtain a business license. Fees vary by business type and annual gross revenue.
- Cook County imposes additional local taxes on certain business activities (e.g., amusement tax, real property transfer tax) — verify whether your business type triggers Cook County-specific obligations.
- LLCs taxed as pass-through entities (default) do not pay the 1.5% PPRT; the tax applies only if the LLC elects corporate taxation. Pass-through income is taxed at the members' individual Illinois flat income tax rate of 4.95%.
Documents
What you'll need to file
- Articles of Organization — filed with the Illinois Secretary of State (ilsos.gov). Requires LLC name (with valid designator), registered agent name and IL street address, organizer signature, and member or manager names for member-managed or manager-managed LLCs respectively.
- Registered agent consent — RA must accept appointment. Illinois residents may self-serve; out-of-state owners use a commercial RA service.
- Operating Agreement — required by Illinois law (805 ILCS 180/15-5), though not filed with the state. Governs member rights, profit allocation, management structure, and dissolution.
- IRS SS-4 (EIN Application) — completed online at irs.gov/ein after the Articles are filed.
- Annual Report — filed each year by the first day of the LLC's anniversary month. Fee: $75.
- Chicago BACP Business License application — required for businesses physically operating in Chicago. Filed at chicago.gov/bacp.
- Business bank account documentation — EIN letter, Articles of Organization, and Operating Agreement.
Registered agent
Who receives legal mail for your LLC
Required in every state. Florida requires a physical FL street address.
- Required?
- Yes
- Who can serve
- Illinois resident individual with a physical IL street address, or a business entity authorized to act as registered agent in Illinois (no PO boxes)
- Can I serve myself?
- Yes
- Commercial RA cost
- ~$100/yr
Illinois Articles of Organization require member or manager names on the public filing — the RA address alone does not provide Wyoming-level privacy. For reduced member exposure, use a manager-managed structure with a nominee manager. Commercial RA services ($50–$150/yr) handle legal mail and ensure a stable registered address for out-of-state owners.
Affiliate slot
Need a registered agent?
Commercial RA service — Northwest Registered Agent placement.
Process
How to form a LLC in Illinois
Sequential — each step gates the next.
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Check name availability with the Illinois Secretary of State Search the Illinois SOS name database at ilsos.gov to confirm your desired LLC name is available. The name must include a valid designator (LLC, L.L.C., Limited Liability Company, or Limited Liability Co.) and must not be deceptively similar to an existing IL entity. Optional: reserve for 90 days ($25) while you prepare documents.
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Appoint an Illinois registered agent Designate a registered agent with a physical Illinois street address (no PO boxes). Illinois residents may self-serve as RA. Out-of-state owners use a commercial RA service ($50–$150/yr). Note that Illinois Articles of Organization require member or manager names on the public filing — if privacy is a concern, a manager-managed structure using a nominee manager reduces member disclosure.
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File the Articles of Organization ($150) File online at ilsos.gov. For a member-managed LLC, list all member names and addresses. For a manager-managed LLC, list manager names and addresses (members need not be listed). Pay the $150 filing fee. Standard processing is approximately 10 business days; expedited processing is available for an additional fee.
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Adopt an Operating Agreement (required by IL law) Illinois LLC Act (805 ILCS 180/15-5) requires that members adopt an Operating Agreement, though it is not filed with the state. The OA governs member rights, profit distributions, management authority, and dissolution procedures. Illinois's default LLC rules apply where the OA is silent, but a customized OA is essential for multi-member LLCs, especially where members have unequal contributions or rights.
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Obtain an EIN from the IRS After the Articles of Organization are approved, apply for an EIN at irs.gov/ein. The online application takes under 15 minutes and provides the EIN immediately. Print the EIN Confirmation Letter (CP 575) for bank account opening.
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Register with the City of Chicago BACP (if operating in Chicago) Most businesses physically operating in Chicago must obtain a City of Chicago business license from the Department of Business Affairs and Consumer Protection (BACP) at chicago.gov/bacp. License requirements and fees vary by business type. Chicago also requires compliance with applicable Cook County taxes (e.g., Chicago Employer's Expense Tax, Cook County Wheel Tax if applicable). Verify specific licensing requirements for your industry at chicago.gov/bacp.
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File the Annual Report by the anniversary month each year Illinois LLCs must file an Annual Report by the first day of the LLC's anniversary month each year. Fee: $75. File online at ilsos.gov. A $100 late penalty applies for missed deadlines; continued non-filing results in administrative dissolution.
Annual obligations
What your LLC owes every year
Year-2+ costs most formation guides omit.
| Obligation | Due date | Fee | Consequence if missed |
|---|---|---|---|
| Illinois Annual Report | First day of the LLC's anniversary month each year | $75.00 | $100 late penalty for filing after the due date. Continued non-compliance results in administrative dissolution, making the LLC legally inoperative until reinstated. |
Provenance
Statute basis & official sources
Last verified 2026-05-06.
Illinois Limited Liability Company Act, 805 ILCS 180 et seq.; Illinois Annual Report: 805 ILCS 180/50-10; Chicago BACP licensing: Chicago Municipal Code Title 4; Illinois Personal Property Replacement Tax: 35 ILCS 5/201(c); IRS guidance on single-member LLC disregarded entity treatment.
Direct filing portal: https://ilsos.gov/corporatellc/
If you skip the LLC
- Operating as a sole proprietor with no LLC means unlimited personal liability — a business debt, lawsuit, or contract dispute in Chicago's high-volume commercial market can reach your personal assets (home, savings, investments).
- Without an LLC, the business name is unprotected in Illinois; a competitor can register the same name as an LLC and force a rebrand.
- Sole proprietors lose the flexibility to elect S-corp tax treatment (available to LLCs) once revenue justifies it, forfeiting thousands annually in reduced self-employment tax.
- Banks, payment processors, commercial landlords, and corporate clients in Chicago require an EIN and formal business entity for account opening and contracting.
- Failure to file the Illinois Annual Report by the anniversary month results in a $100 late penalty, and continued non-filing leads to administrative dissolution — making the entity legally inoperative until reinstated.
Formation context
Who should form in Illinois?
- Recommended for
- Businesses that actually operate in Illinois (Chicago office, IL employees, or primary IL customer base) who want to avoid dual-state filing costs; Midwest commercial LLCs in manufacturing, distribution, professional services, and tech that need a recognized IL entity for contracting and banking; Operating companies that expect to remain in Illinois long-term and do not need formation-state structural advantages (asset protection, Court of Chancery, investor familiarity)
- Tax treatment (default)
- Pass-through by default at the federal level: single-member LLCs are disregarded entities (Schedule C); multi-member LLCs are partnerships (Form 1065). Illinois taxes pass-through LLC income at the individual member level via the 4.95% flat Illinois income tax. Illinois does not impose a franchise tax on LLCs. The Illinois Personal Property Replacement Tax (PPRT, 1.5%) applies only to LLCs taxed as corporations — not to standard pass-through LLCs.
For businesses physically operating in Illinois, forming directly in Illinois avoids the dual-state cost of a Wyoming, Delaware, or Nevada formation plus Illinois foreign qualification. Illinois foreign qualification costs approximately $150 (IL registration fee) + IL's annual obligations — making home-state formation cheaper for most Illinois-operating businesses. Formation-only state advantages (WY charging-order, DE Court of Chancery) apply mainly to holding structures and investor-facing entities.
No publication requirement in Illinois — unlike New York or Nebraska, you do not need to publish notice in a newspaper after filing.
FAQ
Common Illinois (Chicago) LLC formation questions
What is the Illinois Personal Property Replacement Tax, and does it apply to my LLC?
The Illinois Personal Property Replacement Tax (PPRT) is a 1.5% tax on the federal taxable income of pass-through entities that elect corporate-level taxation (C-corp or S-corp election). It does NOT apply to LLCs taxed as partnerships (the default for multi-member LLCs) or as disregarded entities (the default for single-member LLCs). If your LLC makes no tax election and retains pass-through status, the PPRT does not apply — you pay Illinois income tax at the individual member level (4.95% flat rate). Consult a CPA if you are considering a corporate tax election.
Do I need a Chicago city business license in addition to the state LLC registration?
Yes, if your business physically operates in Chicago. The City of Chicago requires most businesses to register with the Department of Business Affairs and Consumer Protection (BACP) and obtain a business license. License fees and requirements vary by industry and annual gross revenue. Some home-based or low-revenue businesses qualify for reduced fees or exemptions. The state LLC filing with the Illinois Secretary of State does not satisfy Chicago's local licensing requirement — both are separate obligations.
How does Illinois LLC formation compare to Delaware and Wyoming for out-of-state owners?
For an owner who actually operates in Illinois, forming directly in Illinois ($150 + $75/yr) is almost always cheaper than forming in Delaware ($90 + $300/yr + IL foreign qualification) or Wyoming ($100 + $60/yr + IL foreign qualification) because the Illinois foreign qualification requirement adds cost and complexity. Illinois offers no special asset-protection statute comparable to Wyoming's charging-order statute, and lacks Delaware's Court of Chancery. Illinois formation makes sense when your business is actually based in Illinois.
Are member names public in an Illinois LLC filing?
Yes, partially. Illinois Articles of Organization require disclosure of member names and addresses for member-managed LLCs, or manager names and addresses for manager-managed LLCs. For privacy, a manager-managed structure using a nominee manager can limit member exposure on the public record — but consult an attorney before using nominee arrangements. Illinois does not offer Wyoming or Delaware's level of anonymous formation.
What is the Illinois Annual Report fee, and when is it due?
Illinois's Annual Report fee is $75 per year, due by the first day of the LLC's anniversary month (e.g., if the LLC was formed in April, the Annual Report is due April 1 each year). A $100 late penalty applies for filings after the due date. File online at ilsos.gov. Continued non-filing results in administrative dissolution.
Does Illinois require an Operating Agreement?
Yes — Illinois is one of the few states that legally requires LLCs to adopt an Operating Agreement (805 ILCS 180/15-5), although it is not filed with the state. The Operating Agreement governs member rights, profit allocation, management authority, and dissolution procedures. Illinois's default LLC rules (805 ILCS 180) apply where the OA is silent, but these defaults are not always optimal for multi-member or holding-structure LLCs. A customized Operating Agreement is essential.
Who should form their LLC in Illinois rather than in a formation-only state?
Illinois formation makes sense for businesses that actually operate in Illinois (office, employees, clients). Forming in Illinois avoids the dual-state cost of forming in Delaware, Wyoming, or Nevada and then foreign-qualifying in Illinois. Illinois's $150 formation + $75/yr Annual Report is a reasonable all-in cost for a working Midwest commercial LLC. Formation-only states (WY, DE, NV) provide structural advantages (asset protection, Court of Chancery, investor familiarity) that matter most to holding companies and investor-facing entities — not to operating businesses based in Illinois.
How do I dissolve an Illinois LLC?
To dissolve an Illinois LLC, file Articles of Dissolution with the Illinois Secretary of State ($5 filing fee). Before filing, wind up the LLC's business: pay or settle debts, distribute remaining assets to members, and cancel any Chicago BACP business licenses. All outstanding Annual Report fees and penalties must be paid. If the LLC is registered as a foreign entity in other states, withdrawal applications must be filed in each of those states separately.
Not sure yet?
Should I form an LLC?
Still deciding between an LLC, sole proprietorship, S-Corp, or C-Corp? Our entity-type comparison breaks down formation cost, tax treatment, liability shield, and compliance complexity for all four structures side by side.
LLC vs S-Corp vs Sole Prop vs C-Corp — compare all four →Is a DBA enough?
DBA vs LLC — do you actually need a full LLC?
Already operating as a sole proprietor, or wondering whether a cheap county DBA filing ($10–$100) is enough instead of forming an LLC? A DBA lets you operate under a trade name — but provides zero liability protection. Our DBA vs LLC comparison breaks down exactly when a DBA is sufficient and when you need a state LLC filing.
DBA vs LLC — cost, liability shield & when to upgrade →After you file
Next steps after forming your LLC
Your Articles of Organization are filed — now make your LLC operational. Three actions every new LLC owner needs to take:
§ A Building permits in Illinois / Chicago
§ B Other states & comparisons
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- WY vs. DE LLC Formation — Compare costs, fees & protection→
- TX vs. DE LLC Formation — Compare costs, fees & requirements→
- FL vs. DE LLC Formation — Compare costs, fees & requirements→
- Best Registered Agent Services — Compare Northwest, ZenBusiness, LegalZoom & Bizee→
- All states — LLC formation guides→
§ C Companion tools
Disclaimer: Informational only — not legal advice. LLC laws change; verify with a Illinois business attorney or CPA before filing.