Forming a limited liability company in Illinois can be a complicated and expensive process if you don't know what you're doing and aren't prepared cost-wise.
Working with our legal team, we've spent the past four weeks looking into the Illinois LLC formation process to learn what documents you need to file and how much they cost.
Here's a breakdown of all the essential filing costs that you should anticipate during the process.
Quick Summary
- An LLC in Illinois costs $154 to submit the Articles of Organization.
- Running a limited liability company in Illinois costs $75 to file the annual report.
- Failing to meet the dealing for the yearly report filing results in a $100 penalty charge.
How Much Does an LLC Cost in Illinois?
An LLC in Illinois costs $154 for the Articles of Incorporation, whether you're filing by mail or online.
You may incur other costs during the process, such as name registration, annual report filing, registered agent service, and annual taxes.
Illinois LLC Filing Fee
Articles of Organization must be filed with the Illinois Secretary of State for a fee of $154 to create an LLC in Illinois.
The state receives basic details about your LLC from your articles of organization, including your name, business address, and those of your registered agent.
If you run more than one LLC and incorporate all of them, the filing charge for multiple Illinois LLC filings is $400.
Moreover, there is a 2.35 percent online payment charge for all credit card payments received during online submissions.
If you want your LLC approved within 7 days, you'll have to pay an additional $50 for rush filing, but this option is unavailable for mail orders.
Illinois Registered Agent Service Fee
It would be best to name a registered agent for your LLC per Illinois state law.
An LLC’s registered agent will accept service of process, legal notifications, and other legal documents, like the articles of organization and operating agreement, on the business's behalf.
You can act as your own registered agent or select a reliable company to do so.
Either way, the following requirements must be met to be a registered agent, per the Illinois secretary of state guidelines:
- Must be 18 years or older
- Must have a physical street address in Illinois
- Must be eligible to handle legal papers
- Must be available throughout normal business hours
If you hire professional Illinois registered agent services, they should work during regular business hours, freeing you time to concentrate on growing your company.
They also safeguard your privacy and assure fast compliance with the state and municipal governments.
In Illinois, the filing fees for hiring registered agent services run between $50 and $300 per year, but the advantages far surpass these prices.
Illinois LLC Tax
In Illinois, LLCs are subject to a different state tax, the personal property replacement tax. The tax rate for standard LLCs is 1.5% of net profits.
By submitting Form IL-1065, the tax must be paid to the Illinois Department of Revenue (IDOR) [1].
Also, if LLC owners elect their companies to be taxed like corporations, they'll be subject to a 5.25% corporate tax rate.
Other LLC Filing Costs
Here is a detailed Illinois LLC cost breakdown that you should anticipate during formation.
1. Business Name Reservation
Before creating the Articles of Organization, do thorough research to see if your Illinois business name is available for use by checking with the Department of Business Services.
If your business name is suitable for use, you will pay $25 to reserve it for 90 days.
And if you wish to revoke your reservation, there is a price involved - you must pay $5 for standard processing or $50 if you want the procedure to be sped up.
2. DBA Name Registration
According to Illinois law, LLCs are not mandated to have an assumed name or DBA, but it's a good idea if you want an extra business name for your entity.
To determine if the name you wish to use is available, check the business names currently in Illinois before registering your DBA.
After deciding on a company name, complete a Certificate of Assumed Name form and submit it to the Illinois county clerk where your firm is situated [2].
The filing fee for a DBA in Illinois is determined by the year you register. Here's a breakdown of the filing charges.
- Years ending in 0 or 5: $150 DBA filing fee
- Years ending in 1 or 6: $120 filing fee
- Years ending in 2 or 7: $90 filing fee
- Years ending in 3 or 8: $60
- Years ending in 4 or 9: $30
Based on the above information, for example, if you're registering for a DBA in 2023, you'll pay a $60 filing fee.
3. Illinois Annual Report Fee
If you hold an LLC in Illinois, you must file an Illinois Annual Report each year to maintain the LLC's status and compliance. LLCs have the choice of mailing or electronically submitting their annual report.
Online annual report filing in Illinois costs $75 and has a turnaround time of 1-2 business days.
Annual reports in Illinois are due on the first day of the month the LLC was formed. For instance, if the LLC was established on June 25, it must submit its annual report by June 1.
If the LLC submits the report 60 days after the due date, there is a $100 fine. This is in addition to the filing charge.
If the LLC is 180 days overdue, the state will administratively dissolve the business entity.
4. Illinois LLC Operating Agreement
While you are not mandated to establish an operating agreement when starting a business in Illinois, this document is crucial because it:
- Creates a separate legal entity for your LLC
- Explains the everyday procedures that you carry out for your business
- Keeps your liability protection intact
- Increases the legitimacy of your company
- Aids in dispute avoidance or resolution without resorting to Illinois law
You may hire an attorney to prepare an operating agreement for your company for a cost ranging from $50-$200 or draft one for free using the free online templates available on different websites.
5. Certificate of Good Standing
The Illinois Secretary of State is where you obtain the certificate of good standing or the certificate of existence for your LLC. This certificate costs $25 and demonstrates that your Illinois limited liability company complies with all applicable laws.
While forming an LLC in Illinois, you are not required to obtain an Illinois certificate of good standing, but if you wish to extend your LLC into another state, you may need one.
Some banks additionally demand that you have this certificate if you want to register for a loan or create a business bank account.
6. EIN/Tax ID Number
After submission of the organizational documents to the Secretary of State of Illinois, the Illinois Department of Revenue must also provide all business entities with a tax identification number or an EIN.
Before acquiring the employer identification number, you must file a Business Registration Application with the Illinois Department of Revenue.
Applications can be submitted online or by mail for free. Use Form REG-1 to submit a mail-in application or visit the Illinois Business Gateway website for online applications.
However, if you decide to hire an LLC formation service to process the EIN on your behalf, you'll pay anything from $50 to $100.
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FAQs
How Much Does an LLC in Illinois Cost Per Year?
An LLC in Illinois costs $75 per year for the annual reports. However, this amount may be more if you hire a registered agent service as you'll have to pay their yearly fee.
How Much Does A Foreign LLC Cost in Illinois?
A foreign LLC in Illinois costs $150 to register and file your articles of organization. You can pay an extra $100 filing fee for rush foreign LLC filing, and once your registration is approved, you can transact business in Illinois.
Do You Need Professional Help with Your Illinois LLC?
Running a business entity in Illinois requires a lot of organization, and the sheer volume of duties may be exhausting. Another daunting responsibility to add to your list of things to accomplish is to research the fees and costs associated with creating an LLC.
Thankfully, by hiring a company from our list of the best Illinois LLC formation services, you'll have access to all the resources and assistance you need to keep your Illinois company state-compliant and running smoothly.
These companies will offer legal advice and compliance services so that your company doesn’t make costly mistakes.
References:
- https://tax.illinois.gov/questionsandanswers/604.html
- https://www.cookcountyil.gov/service/assumed-business-name-registration
