How Much Does an LLC Cost in Illinois (All You Need to Know)

Forming a limited liability company in Illinois is associated with filing fees and additional costs.

As an expert in Mergers and Acquisitions, I spent years helping entrepreneurs form businesses and create joint organizations.

Working with business experts in the state, 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.

As you consider launching an LLC, opting for the services of a professional LLC company in Illinois can be a safeguard against errors that might delay the start of your LLC.

Quick Summary

• An LLC in Illinois costs $154 to submit the Articles of Organization.
• Once the business has been approved, additional expenses include licenses and permits, annual report, registered agent service, taxes, and other relevant documents.
• According to the Illinois Department of Revenue, LLCs opting for corporate tax status are subject to a 5.25% rate.
• Clients vouched that the state has a booming economy with a well-educated workforce.

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Cost to Start an LLC in Illinois

To legally conduct business in the state, there are mandatory filing fees and optional expenses the entity should cover.

1. LLC Formation Filing Fee ($154 - Mandatory)

An LLC in Illinois costs $154 for the Articles of Incorporation, whether you're filing by mail or online. 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% online payment charge for all credit card payments received during online submissions, according to the Illinois Secretary of State's office.

For clients who want to start their businesses immediately, expedited service is available for an additional fee. When I visited the office, I was able to avail of the 24-hour accelerated service for $100.

2. Registered Agent Service Fee ($80-$300 Annually – Optional)

An LLC’s registered agent will accept service of process, legal notifications, and other legal documents on the business's behalf.

You can act as your own registered agent for $0 or select a reliable company to do so.

In Illinois, the fees for hiring registered agent services run between $80 and $300 per year, but the advantages far surpass these prices.

3. Name Reservation Fee ($25 - Optional)

To reserve a business name, you must pay the $25 filing fee. Businesses won't be able to use the name for 90 days.

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.

Before filing the application, I advise clients to do thorough research to see if their preferred business name is available for use by checking with the Department of Business Services.

Expenses Following the Approval of Your LLC

Here is a detailed Illinois LLC cost breakdown that you should anticipate after formation.

1. Business License (Depending on the Line of Business - Mandatory)

Depending on the type of industry and business location, Illinois requires LLCs to obtain specific licenses and permits. The cost varies depending on the nature of the business.

To illustrate, a client of mine was required to obtain a $200 grain dealer license to operate his agricultural business.

2. Annual Report Fee ($75 - Mandatory)

If you own an LLC in Illinois, you must file an Illinois Annual Report each year to maintain the LLC's status and compliance.

Annual report filing costs $75 and has a turnaround time of 1-2 business days. If the LLC submits the report 60 days after the due date, there is a $100 fine.

I remind clients to file the annual report on or before the due date to avoid penalties and to keep the business in good standing with the state.

If the LLC is 180 days overdue, the state will administratively dissolve the business entity.

3. Taxes (Depending on Income Bracket - Mandatory)

In Illinois, LLCs are subject to a 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, according to the Illinois Department of Revenue.

4. Operating Agreement ($100 - $200 - Optional, but Recommended)

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 Illinois LLC operating agreement for your company for a cost ranging from $100-$200 or draft one for free using the free online templates available on different websites.

5. DBA Name Registration (Depending on the Year Filed - Optional)

To determine if the name is available, I advise clients to check the business names currently in Illinois before registering their DBA. 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 2024, you'll pay a $60 filing fee.

"A DBA, also known as a Trade Name, Fictitious Name, Assumed Name, or Fictitious Business Name, refers to the same concept."

- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter

6. Certificate of Good Standing ($25 - Optional, but Recommended)

The Certificate of Good Standing costs $25 and demonstrates that your Illinois limited liability company complies with all applicable laws.

I always advise clients and new business owners to obtain the certificate since investors and creditors favor companies that are compliant with the state.

7. EIN ($0 - Optional, but Recommended)

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.

Related Articles:

• Starting a Series LLC in Illinois
• Dissolving an LLC in Illinois
• How Long Does It Take to Form an LLC in Illinois

FAQs

References:

1. https://tax.illinois.gov/questionsandanswers/604.html
2. https://www.cookcountyil.gov/service/assumed-business-name-registration