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

LLC Costs in Illinois

Forming a Limited Liability Company (LLC) in Illinois is a popular choice for entrepreneurs and small business owners who want to protect their personal assets and enjoy flexibility in their business operations. LLC formation costs vary from state to state, and it is essential to understand the costs involved in forming and maintaining an LLC in Illinois.

If you would like to know more about the Illinois LLC Cost, read the whole article until the end. Webinarcare Editorial Team will help you gain knowledge on how much an LLC Costs in Illinois. You must be guided by all the factors gathered in this article.

How to Start an LLC?

Before we dive into the LLC Cost in Illinois, you should know the step-by-step process of starting an LLC, including selecting a unique business name, appointing a Registered Agent, filing the necessary documents, and fulfilling any additional requirements, such as obtaining licenses or permits that are specific to your industry or location.

Here are the steps in starting an LLC in Illinois:

  • Step 1: Choose a Unique Business Name
    The first step in starting an LLC in Illinois is to select a unique business name for your company. The name should be distinguishable from any other registered businesses in the state. You can check the availability of your desired business name by searching the state’s business name database. Once you’ve found an available name, you may need to include “LLC” or “Limited Liability Company” at the end of the name to comply with state requirements.
  • Step 2: Appoint a Registered Agent
    A Registered Agent is someone who will receive official legal and tax documents on behalf of your LLC. The Registered Agent must have a physical address in Illinois and be available during normal business hours. You have the option to appoint yourself as the registered agent or hire a professional registered agent service.
  • Step 3: File the Articles of Organization
    To officially form your LLC, you need to file the Articles of Organization with the Illinois Secretary of State or the appropriate state agency. The Articles of Organization typically requires basic information about your LLC, such as its name, address, Registered Agent details, and the name and address of the LLC’s members or managers.
  • Step 4: Create an Operating Agreement
    Once your LLC is formed, it’s highly recommended to create an operating agreement in Illinois. Although not required by Illinois law, an operating agreement is a crucial internal document that outlines the ownership, management, and operating procedures of your LLC. It helps establish clear guidelines and expectations among members, and it can be especially useful in the event of disputes or disagreements in the future. The operating agreement can be customized to fit the specific needs and goals of your LLC.
  • Step 5: Obtain Required Licenses and Permits
    Depending on the nature of your business, you may need to obtain specific licenses or permits at the federal, state, or local level. Research the licensing requirements in Illinois and apply for business licenses in Illinois related to your industry or activities. Common examples include professional licenses, health or safety permits, and sales tax permits.
  • Step 6: File for an Employer Identification Number (EIN)
    An Employer Identification Number (EIN) is a unique nine-digit number issued by the Internal Revenue Service (IRS) that is used to identify your LLC for tax purposes. Even if you don’t have employees, obtaining an EIN is typically required if you plan to open a business bank account, hire contractors, or file certain tax forms. You can easily apply for an EIN in Illinois through the IRS website.
  • Step 7: Comply with Ongoing Requirements
    Once your LLC is established in Illinois, it’s important to stay in compliance with any ongoing requirements. This may include filing periodic reports, paying Annual Report fees, and renewing licenses or permits. Familiarize yourself with the specific obligations for maintaining your LLC’s good standing in Illinois.

Remember, starting an LLC in Illinois involves some specific steps and requirements that may differ from other states. It’s advisable to hire an LLC Services in Illinois that specializes in business formation to ensure that you follow all the necessary procedures accurately and efficiently. We reviewed the Best LLC Services for you to check out.

LLC Cost in Illinois

It is crucial to consider the costs associated with the formation and maintenance of your business. The costs of establishing and operating an LLC in Illinois can vary based on several factors, including the initial formation fees, ongoing compliance requirements, and optional expenses.

Initial LLC Costs

When starting a limited liability company (LLC), knowing the initial costs associated with forming and registering your new business entity is essential. Understanding and preparing for these expenses can help you budget effectively and set your Illinois business on a path to success. Some common initial costs associated with forming an LLC include Articles of Organization filing fees, Registered Agent fees, and additional services, such as business name reservation fees.

Articles of Organization Filing Fee

The first step in forming an LLC in Illinois is to file the Illinois Articles of Organization with the Illinois Secretary of State. This document officially creates the LLC and includes essential information about the business, such as its name, address, and Registered Agent.

This document includes essential information about your LLC, such as:

  • The name of your LLC
  • The address of your LLC’s principal office
  • The name and address of your Registered Agent
  • The purpose of your LLC (optional in some states)

You can typically file the Articles of Organization online, by mail, or in person. A filing fee is associated with this process, which costs around $150. You can also file by mailing it to Illinois Secretary of State, which is located at Department of Business Services, Limited Liability Division, 501 S. Second St., Rm. 351, Springfield, IL 62746.

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Registered Agent Fee

An LLC in Illinois must designate a Registered Agent who will be responsible for receiving legal and government documents on behalf of the business. You can act as your own Registered Agent or appoint someone you know. Professional Registered Agent in Illinois typically charge an annual fee ranging from $50 – $200.

In Illinois, your Registered Agent must:

  • Be a resident of Illinois or a business entity authorized to do business in the state.
  • Have a physical address in Illinois (P.O. boxes are not acceptable)

Choosing a reliable and responsible Registered Agent is essential, as failure to receive and respond to legal documents can seriously affect your business.

We reviewed some of the Best Registered Agent Services in Illinois and provided features as an add-on with their packages for you to check out.

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Business Name Reservation Fee

If you have a specific business name in mind and want to ensure it is available when you are ready to file your Articles of Organization, you can reserve the business name with the Illinois Secretary of State.

In Illinois, your LLC name must:

  • Include the words “Limited Liability Company,” “LLC,” or “L.L.C.
  • Not contain any words or phrases that are prohibited by state law
  • Be distinguishable from the names of other businesses registered in the state

However, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 90 days. You must file a name reservation application in the Illinois Secretary of State to keep the name.

The online name reservation fee is disclosed, while the mail name reservation fee is $300. You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for a DBA (doing business as). If you have decided to file for a DBA, you can file it in three methods, online, by mail, and in person filing. However, before filing Illinois DBA, you should know that you need to renew your DBA, which cost $50.

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Ongoing LLC Costs

After you know the initial costs of forming an LLC in Illinois, you should also know the ongoing costs once you have filed for an LLC. Here are the involved costs that you need to know.

Annual Report Filing Fee

To keep your LLC in good standing, you must file Annual Report with the Illinois Secretary of State. The Annual Report provides updated information about your LLC, such as changes in address, members, or Registered Agent.

In Illinois, the Annual Report fee costs $75 which can be paid every 1 year (before the anniversary month starts).

Franchise Tax or Annual LLC Tax

Some states require LLCs to pay an annual franchise or LLC tax, separate from the Annual Report filing fee. Franchise tax, or annual tax, is a fee imposed by Illinois on businesses, including LLCs and Illinois Corporations, for the privilege of operating within their jurisdiction. This tax is separate from income taxes and is usually based on factors such as the company’s net worth, assets, capital, or a fixed dollar amount, depending on the Illinois’s specific tax regulations.

Illinois LLC Taxes To Be Paid

The State of Illinois is one of those rarest states in the United States that does not levy any personal income tax on businesses. However, the business LLCs must file other taxes with the State authorities.

  • Sales Tax: A sales tax is a government-imposed tax on the sale of goods and services. It is generally added to the price of a product or service at the point of sale and paid by the consumer. The tax is collected by the retailer or service provider, who then remits the collected tax amount to the relevant government authority. In Illinois, the sales tax rate is 6.25%.
  • State Income Tax: Considering other taxes in Illinois, you should pay for the state income tax, with a rate of 7.00%.
  • LLC Federal Self-Employment Tax: Federal self-employment tax rates are the same across all states. Self-employment taxes are imposed on self-employed individuals or members of a Limited Liability Company (LLC) taxed as a sole proprietorship or partnership.
  • Property Tax: The property tax is fixed at 2.16% of industrial, commercial, residential, agricultural, and all other properties.

Business Licenses and Permits

Depending on the nature of your Illinois business and the location of your operations, you may need to obtain permits and business licenses in Illinois. The costs of these licenses and permits will vary based on your specific business and location. In Illinois, the business license ranges from $50 – $300. However, research the requirements for your LLC in Illinois and budget for these expenses accordingly.

Optional LLC Costs

Here are the optional costs you must consider if you will form an operating agreement or hire a professional service.

Operating Agreement

Although not required by law, it is highly recommended that LLCs create an operating agreement in Illinois. This document outlines the LLC’s ownership structure, management, and operating procedures. Hiring a business attorney to draft an operating agreement can cost anywhere from $500 to $2,000, or you can use online resources and templates to create one yourself.

Professional Services

You may hire professionals such as attorneys, accountants, or business consultants to help you establish and run your Illinois LLC. These services can provide valuable expertise and guidance but come at an additional cost. Consider the potential benefits and weigh them against the costs when hiring professional assistance.

You may check out the Best Business Attorney Services in Illinois that offer their professional services to form your business.

Can I Set Up an LLC For Free?

It’s impossible to set up an LLC entirely for free, as state filing fees and other costs are associated with establishing an LLC. However, you can save money by handling the formation process instead of hiring a professional service. Here are some steps to help you minimize the cost of setting up an LLC:

  • Choose your LLC’s name and check for availability in your state. This can generally be done through the Secretary of State’s website.
  • Prepare and file the Articles of Organization yourself. Illinois offer an online filing option or downloadable forms on their websites. By completing this process independently, you can avoid paying additional fees for a professional service.
  • Act as your own Registered Agent if permitted within Illinois. It allows the business owner to serve as the Registered Agent, saving you the cost of hiring a professional registered agent service.
  • Create your own Operating Agreement using online resources and templates. Although not required in every state, an Operating Agreement is highly recommended to outline your LLC’s ownership structure and management. By drafting this document yourself, you can save on legal fees.
  • Research and apply for any required licenses and permits on your own. Depending on your business type and location, you may need specific permits or licenses. These costs can vary, but handling the application process yourself can save you the expense of hiring a professional service.

While you can’t set up an LLC for free, taking a do-it-yourself approach and minimizing the use of professional services can help you save money during the formation process. However, handling these tasks requires time and effort, and there may be additional legal or financial risks if mistakes occur.

FAQs

What are the filing fees for forming an LLC in Illinois?
The filing fee for a new LLC in Illinois is $150.
How much does it cost to get an operating agreement for an LLC in Illinois?
The cost of an operating agreement can vary, but it can typically be done for a few hundred dollars by an attorney or online legal service.
Do I need to pay any annual fees or taxes to maintain my LLC in Illinois?
Yes, all LLCs in Illinois are subject to an annual fee of $75.
What is the expedited processing fee for forming an LLC in Illinois?
The expedited processing fee for forming an LLC in Illinois is $100.
Are there any additional fees for foreign LLCs operating in Illinois?
Yes, foreign LLCs must pay an application for registration fee of $150 in order to operate in the state of Illinois.
Can I form an LLC in Illinois myself, or do I need to hire a lawyer?
While it is possible to form an LLC in Illinois yourself, it may be helpful to consult with a lawyer or online legal service to ensure that you are filing the proper paperwork.
Is there a fee for changing the name of my LLC in Illinois?
Yes, the fee to change the name of an LLC in Illinois is $25.
How much does it cost to obtain a certificate of good standing for my LLC in Illinois?
The cost to obtain a certificate of good standing for your LLC in Illinois is $75.
What is the cost to dissolve an LLC in Illinois?
The fee to dissolve an LLC in Illinois is $5.
Are there any annual report fees for LLCs in Illinois?
Yes, LLCs in Illinois are required to file an annual report every year and pay a $75 filing fee.
Can I pay the fees for forming an LLC in Illinois with a credit card?
Yes, the Illinois Secretary of State accepts credit card payments for LLC filings.
Are there any additional fees for LLCs that operate in multiple states, but are based in Illinois?
Yes, these LLCs may be subject to additional fees in the states where they operate, depending on each state’s laws.
How much does it cost to obtain a certified copy of my LLC’s formation documents in Illinois?
The fee to obtain a certified copy of your LLC’s formation documents in Illinois is $50.
Is there an annual franchise tax for LLCs in Illinois?
No, there is no franchise tax for LLCs in Illinois.
Do Illinois LLCs need to file a state tax return?
Yes, LLCs in Illinois must file an annual report with the Illinois Department of Revenue.
What is the cost to file for an LLC name reservation in Illinois?
The fee to file for an LLC name reservation in Illinois is $25.
Can I pay Illinois LLC fees by check or money order?
Yes, checks and money orders made out to the Illinois Secretary of State are accepted as payment.
Does the cost of forming an LLC in Illinois vary depending on the number of members?
No, the cost to form an LLC in Illinois is the same regardless of the number of members.
How much does it cost to obtain a certified copy of my Illinois LLC’s operating agreement?
The fee to obtain a certified copy of your operating agreement is $5 online or $10 by mail.
Can I expedite the processing of my Illinois LLC formation documents?
Yes, an additional expedited processing fee of $50 can be paid to expedite the processing of LLC formation documents.
Are there any fees required to change a registered agent for an Illinois LLC?
No, you can change your registered agent for your Illinois LLC for free.
What is the fee to file an annual report for an LLC in Illinois?
The annual report filing fee for an LLC in Illinois is $75.
Can I get a refund for fees I paid to form an LLC if I change my mind?
No, fees paid to form an LLC in Illinois are non-refundable.
What is the cost to issue additional membership units in an Illinois LLC?
The cost to issue additional membership units in an Illinois LLC varies, and you should speak with an attorney for guidance.
Are there any additional fees for adding a foreign LLC as a member of an Illinois LLC?
Yes, foreign LLCs added as members of Illinois LLCs are subject to a fee of $500.
How much does it cost to amend my LLC’s articles of organization in Illinois?
The fee for amending your LLC’s articles of organization in Illinois is $50.
Do I need to hire a registered agent for my LLC in Illinois?
Yes, all LLCs in Illinois are required to have a registered agent in the state.
What is the fee to change my LLC’s registered agent in Illinois?
There is no fee to change your LLC’s registered agent in Illinois.
Can I get a receipt for fees paid to form an LLC in Illinois?
Yes, a receipt will be provided when fees are paid to form an LLC in Illinois.
What are the costs associated with forming an LLC in Illinois?
The costs associated with forming an LLC in Illinois include a $150 filing fee.
Are there any annual fees for LLCs in Illinois?
Yes, there is an annual report fee of $75 for LLCs in Illinois.
Does Illinois have a publication requirement for LLCs?
No, Illinois does not have a publication requirement for LLCs like New York.
Do I have to hire a lawyer to form an LLC in Illinois?
No, you do not have to hire a lawyer to form an LLC in Illinois, but it may be recommended for complex business structures.
How long does it take to form an LLC in Illinois?
It typically takes around 15 business days to form an LLC in Illinois.
Can I get expedited filing for an LLC in Illinois?
Yes, you can get expedited filing for an LLC in Illinois for an additional fee.
What is the expedited filing fee for an LLC in Illinois?
The expedited filing fee for an LLC in Illinois is $100.
Can I reserve a name for my LLC in Illinois?
Yes, you can reserve a name for your LLC in Illinois for a fee of $25.
How long can I reserve a name for my LLC in Illinois?
You can reserve a name for your LLC in Illinois for 90 days.
Do I need to have a registered agent in Illinois for my LLC?
Yes, you need to have a registered agent in Illinois for your LLC.
Can I be my own registered agent for my LLC in Illinois?
Yes, you can be your own registered agent for your LLC in Illinois.
Are there any restrictions on who can be a registered agent for an LLC in Illinois?
The registered agent for an LLC in Illinois must be a resident of the state or a company authorized to do business in Illinois.
What is a franchise tax in Illinois and does my LLC have to pay it?
A franchise tax in Illinois is an annual fee that LLCs must pay in order to operate in the state.
How much is the franchise tax for LLCs in Illinois?
The franchise tax for LLCs in Illinois is calculated as a percentage of the LLC’s net income and is capped at $2.75 million.
What is a series LLC and can I form one in Illinois?
A series LLC is a type of LLC that creates multiple “series” of members, managers and assets and can be formed in Illinois.
How much does it cost to convert an LLC to a series LLC in Illinois?
There is no additional filing fee to convert an LLC to a series LLC in Illinois.
Can a foreign LLC register to do business in Illinois?
Yes, a foreign LLC can register to do business in Illinois for a fee of $150.
Does a foreign LLC have to pay the franchise tax in Illinois?
Yes, a foreign LLC registered to do business in Illinois must pay the franchise tax.
How often do LLCs have to file annual reports in Illinois?
LLCs have to file annual reports in Illinois every year.
Is there a late fee for filing annual reports late in Illinois?
Yes, there is a late fee of $300 for LLCs that submit annual reports after the due date.
Do I need an operating agreement for my LLC in Illinois?
While an operating agreement is not required by law to form an LLC in Illinois, it is strongly recommended for LLCs with more than one member or manager.
What is the filing fee for an amendment to an LLC in Illinois?
The filing fee for an amendment to an LLC in Illinois is $150.
Can I file an amendment to change the name of my LLC in Illinois?
Yes, you can file an amendment to change the name of your LLC in Illinois.
What is the fee for resubmitting rejected LLC articles in Illinois?
There is no fee for resubmitting rejected LLC articles in Illinois.
Is it possible to dissolve an LLC in Illinois?
Yes, it is possible to dissolve an LLC in Illinois by filing a Certificate of Dissolution.
What is the filing fee to dissolve an LLC in Illinois?
The filing fee to dissolve an LLC in Illinois is $5.
Can I obtain a federal tax ID number for my LLC in Illinois?
Yes, you can obtain a federal tax ID number for your LLC in Illinois through the IRS.
How much does it cost to obtain a federal tax ID number for my LLC in Illinois?
Obtaining a federal tax ID number for your LLC in Illinois is free.

Also Read

How to Save Money While Starting Your Business LLC in Illinois

One of the first steps to saving money when starting your LLC in Illinois is to carefully consider your business structure. While forming an LLC has its own associated costs, such as filing fees, it can provide significant advantages in terms of liability protection and tax benefits. Instead of jumping straight into more costly business structures like corporations, opting for an LLC can save you money in the long run.

Another way to save money is to be strategic about where you choose to establish your business. Illinois offers a variety of locations, each with different costs of living, taxes, and regulations. By researching and selecting a location that is business-friendly and cost-effective, you can reduce overhead expenses and potentially increase your profits.

In addition to location, it’s important to carefully plan and track your startup costs. Creating a detailed budget will help you allocate your resources effectively and identify areas where you can cut expenses. For example, consider opting for affordable office space or even working from home initially to save on rent and utilities. Similarly, you can save money by purchasing used equipment instead of brand new items or utilizing free or low-cost software solutions.

Another cost-saving strategy is to take advantage of available resources and assistance for small businesses in Illinois. There are various organizations, such as incubators, accelerators, and chambers of commerce, that offer support, networking opportunities, and even funding to help entrepreneurs grow their businesses. By leveraging these resources, you can access valuable guidance and services without having to incur additional expenses.

In the same vein, consider outsourcing tasks that don’t require onsite staff. Hiring freelancers or contracting with specialized service providers can be a cost-effective way to access expertise and support on a project basis, without the overhead of hiring full-time employees. This can help you save money while still ensuring that your business operations run smoothly.

Finally, one of the most important ways to save money as a new LLC in Illinois is to prioritize financial discipline and planning. This means keeping detailed records of your expenses, monitoring your cash flow, and consistently reviewing your budget to identify areas where you can optimize spending. By maintaining a frugal mindset and being proactive about managing your finances, you can ensure that your business remains financially healthy and sustainable in the long term.

In conclusion, starting your LLC in Illinois doesn’t have to break the bank. By being mindful of your business structure, location, expenses, resources, and financial management, you can save money while still setting your business up for success. With careful planning and smart decision-making, you can maximize your savings and ultimately build a thriving business in the Land of Lincoln.

Conclusion

Forming and maintaining an LLC in Illinois involves various costs, including initial filing fees, ongoing annual report fees, and taxes. Understanding and planning for these costs is essential when establishing your LLC. Additionally, consider any optional expenses, such as hiring professional services or drafting an operating agreement, to ensure the success and longevity of your LLC in Illinois.

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