How to Form an LLC in Illinois — Step-by-Step Guide
Everything you need to file your Illinois Articles of Organization, stand up your registered agent, and stay compliant afterward.
Updated 2026-08-15
Key Takeaways
- To form an LLC in Illinois, you file Articles of Organization (Form LLC-5.5) with the Illinois Secretary of State for a $150 fee — online filings typically process the same business day.
- Illinois requires a $75 Annual Report due on the first day of your LLC's anniversary month, not the last — an earlier deadline than many states use.
- Illinois LLCs taxed as partnerships also owe the Personal Property Replacement Tax (PPRT), a 1.5% tax on net income on top of the state's flat 4.95% income tax.
- An operating agreement isn't legally required in Illinois, but it's strongly recommended, especially to spell out how PPRT liability is allocated among members.
- CompanySage submits every Illinois formation to the Secretary of State within 24 hours of your order, standard on every plan, at no extra cost.
Why Form an LLC in Illinois
Illinois has the fifth-largest state economy in the country, anchored by financial services, manufacturing, agriculture, technology, and healthcare, with Chicago as one of the most active business-formation markets in the Midwest. If you're weighing how to form an LLC in Illinois, the state offers same-day online processing for your formation filing and a well-established legal framework for LLCs under the Illinois Limited Liability Company Act (805 ILCS 180).
An LLC structure limits your personal liability for business debts and lawsuits, which matters in Illinois's active commercial and litigation environment, particularly around Chicago. It also gives you flexible, pass-through tax treatment by default — profits and losses flow to your personal return instead of being taxed twice at the entity level.
Illinois isn't the cheapest state to form or maintain an LLC in, and it's worth going in with eyes open about that.
Between the flat 4.95% state income tax, the 1.5% Personal Property Replacement Tax on partnership-taxed LLCs, and Chicago-area sales tax rates that can approach 10.25% combined, Illinois has a more layered tax structure than most states. None of that changes whether an LLC is the right entity — it just means the formation and compliance steps below are worth following closely.
How to Form an LLC in Illinois: Step-by-Step
Here's the full process to form an LLC in Illinois, from naming your company to filing your first Annual Report.
Search and choose an available Illinois LLC name
Your name has to be distinguishable from every other entity on file with the Illinois Secretary of State and must include “Limited Liability Company,” “LLC,” or “L.L.C.”
You can reserve a name online for $25 for a 90-day hold while you prepare your filing — shorter than the 120-day reservation window many states offer.
Appoint an Illinois registered agent
Every Illinois LLC needs a registered agent with a physical Illinois street address (no P.O. boxes) who is available during business hours to accept legal notices. You can serve as your own agent if you meet Illinois's residency and address requirements, or use a professional registered agent service to keep your home address off the public record. See our full registered agent guide for what the role actually involves.
File your Articles of Organization
File Articles of Organization (Form LLC-5.5) with the Illinois Secretary of State's Business Services Department, either online or by mail. The filing fee is $150, and online submissions typically process the same business day, while mailed filings can take two to four weeks. Your Articles need your LLC's name, your registered agent's name and Illinois address, and your organizer's signature.
Draft an operating agreement
Illinois doesn't legally require an operating agreement, but it's strongly recommended. Illinois permits oral agreements, but a written one is what banks, courts, and co-members actually rely on. It's also where multi-member LLCs should address how PPRT liability and profit distributions get allocated among members. Read our operating agreement guide for what to include.
Get an EIN from the IRS
An Employer Identification Number is required if your LLC has more than one member, plans to hire employees, or wants to open a business bank account. The IRS issues EINs for free at irs.gov, and online applications typically process immediately. Our EIN guide walks through the application step by step.
Check state and local licensing requirements
Illinois has no single statewide general business license, but certain industries need a license through the Illinois Department of Financial and Professional Regulation, and Chicago runs its own — fairly extensive — municipal licensing system. Check both state and local requirements before you open your doors.
File your Annual Report and stay compliant
Illinois LLCs file an Annual Report every year for a $75 fee, due on the first day of your LLC's anniversary month. A $100 penalty applies if it's unpaid 60 days after the due date, with administrative dissolution as a risk if it stays unresolved.
Illinois LLC Costs and Fees
Illinois formation and compliance costs run moderate compared to other large-economy states, with the state's Personal Property Replacement Tax adding a layer that most states don't have. Here's what to expect:
| Item | Illinois Fee | Notes |
|---|---|---|
| Articles of Organization | $150 | One-time filing fee, paid to the Illinois Secretary of State |
| Annual Report | $75 | Due the first day of your anniversary month each year; $100 penalty if unpaid within 60 days |
| Name reservation (optional) | $25 | 90-day hold on your chosen LLC name |
| Registered agent change | $25 | Statement of Change of Registered Agent and Registered Office |
| Assumed name (DBA) | $30–$150 | Filed with the county clerk, not the state — fee varies by county |
| Personal Property Replacement Tax | 1.5% of net income | Applies to LLCs taxed as partnerships; filed with Form IL-1065 |
Beyond state fees, budget for a registered agent (if you use a professional service), the operating agreement, and any local licenses. All-in, most Illinois LLCs land somewhere in the $150 to $475 range for formation and first-year setup, before ongoing Annual Report and tax obligations.
Timeline and Expedited Filing
Illinois online filings through the Secretary of State typically process the same business day, which is faster than most states manage even with a paid rush option. Mailed filings, by contrast, can take two to four weeks, longer during peak filing periods. Because online filing is already fast, Illinois doesn't offer a separate paid expedite tier the way some states do — filing online is effectively the expedited path.
CompanySage handles the submission side of that timeline for you: we prepare and submit every Illinois formation to the Secretary of State within 24 hours of your order, standard on every plan, at no extra cost. From there, approval speed depends on the state's own processing queue — which for Illinois online filings is typically same-day.
Ongoing Compliance for Your Illinois LLC
Getting your Illinois LLC approved is the start, not the finish line. A few recurring obligations keep your LLC in good standing:
- Annual Report: $75, due the first day of your anniversary month — not the last day, which trips up owners used to other states' rules. A $100 penalty applies if it's unpaid within 60 days.
- State income tax: a flat 4.95% on LLC pass-through income, paid by members on their individual Illinois returns.
- Personal Property Replacement Tax: 1.5% of net income for LLCs taxed as partnerships, filed with Form IL-1065 alongside the regular income tax.
- Sales tax registration: required if you sell taxable goods or services; combined state and local rates in the Chicago area can reach roughly 10.25%.
- Registered agent maintenance: keep your agent's Illinois address current with the Secretary of State — a lapsed agent can put your LLC at risk of administrative dissolution.
When to loop in a professional
Illinois's layered tax structure — the PPRT, the state income tax, and Chicago's additional city-level taxes and licensing rules — is where owners most often benefit from a second set of eyes, particularly for multi-member LLCs splitting profits. CompanySage formation plans include attorney-designed documents, and on-demand attorney consultations are available as an add-on for an additional fee if your situation calls for it.
For a broader look at the formation process that applies across states, see our guide to how to form an LLC. If Illinois isn't your state, we also cover formation in Wyoming and Texas. And if you want a faster path through the whole process, our same-day LLC formation service and formation plans are built to get an Illinois LLC filed within 24 hours of your order.
Frequently Asked Questions
How much does it cost to form an LLC in Illinois?
Filing the Articles of Organization (Form LLC-5.5) with the Illinois Secretary of State costs $150. Add a $75 Annual Report each year, and typically $150–$475 all-in once you account for a registered agent, an operating agreement, and getting an EIN.
How long does Illinois LLC approval take?
Online filings through the Illinois Secretary of State typically process the same business day, while mailed filings can take two to four weeks. CompanySage submits every Illinois formation within 24 hours of your order at no extra cost, regardless of which plan you choose.
What is the Illinois Personal Property Replacement Tax?
The Personal Property Replacement Tax (PPRT) is a state tax of 1.5% on net income that applies to Illinois LLCs taxed as partnerships (most multi-member LLCs). It's paid with the Illinois partnership return, Form IL-1065, and it's separate from Illinois's regular 4.95% income tax. Single-member LLCs that stay disregarded for tax purposes generally don't file Form IL-1065 and typically don't owe PPRT.
Does Illinois require an LLC operating agreement?
No, Illinois doesn't legally require one, but it's strongly recommended. Without a written operating agreement, your LLC falls back on Illinois's default rules under 805 ILCS 180, which may not match how you actually want to run the business or split profits. Most banks also want to see one before opening a business account.
When is the Illinois Annual Report due, and what happens if I miss it?
Illinois Annual Reports are due on the first day of your LLC's anniversary month — for example, if your LLC formed in October, the report is due every October 1. A $100 penalty applies if it's still unpaid 60 days after the due date, and Illinois can move to administratively dissolve an LLC that stays out of compliance.
Can I be my own registered agent for an Illinois LLC?
Generally yes, as long as you're an individual Illinois resident with a physical street address in the state (P.O. boxes don't qualify) and can be reliably available during business hours to accept legal documents. Many owners use a professional registered agent instead to keep a home address off the public Secretary of State record.
Do I need a lawyer to form an LLC in Illinois?
Most straightforward, single-state Illinois LLCs don't require an attorney to file. Where legal advice tends to pay off is more complex situations — multi-member profit splits, the Personal Property Replacement Tax, or Chicago-area licensing questions. CompanySage formation plans include attorney-designed formation documents, with on-demand attorney access available as an add-on for an additional fee.
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