Illinois LLC Cost
If you have plans to start a LLC business in Illinois, then you may have started to look into what it will take to get your business established and going and first you need to start by understanding the Illinois LLC Cost.
But before renting an office space, hiring employees, or selling any products or services, you need to actually form your Illinois LLC.
Most likely you have come to this page because you are needing to form your LLC in Illinois and get your business going and you aren’t quite sure how much it will cost to form your LLC.
Today we are going to review the costs of forming your LLC in Illinois so that you make sure you know how much it costs and what it will entail.
Note: If you need help starting your Limited Liability Company and want to make sure it is done correctly, you will want to consider using an LLC formation service. Some of them are free + state fee while others cost a little more and take care of all of your legal paperwork and annual filings so you don’t have to miss a deadline.
Here are the top two LLC Formation Services that we recommend:
$39 + State fee
They charge one of the lowest rates and are an overall best value. Their formation packages are loaded with features for a great price!
$0 + State fee
For those on a strict budget, this is your cheapest LLC service. You can add on features as needed.
Bare Minimum Cost to Start an Illinois LLC
In this section we are going to talk about the bare minimum costs to get your LLC formed in the state of Illinois.
We will also include some optional (but recommended) costs as well.
- Articles of Organization Fee: $150 hard copy submissions or $250 for online and expedited forms
- Business license in Ilinois: $50 – $150 and most companies are required to obtain a business license in Illinois and the cost varies depending on the city in which the company is based.
- LLC Name Reservation Fee: $25 for online or paper handling
- LLC Formation Service: These range from $0 + State Fee and go up from there
Illinois LLC Formation Costs – Everything You Need to Know
LLC Name Reservation Fee
If you are already set on a name for your business, we highly recommend that you apply for a name reservation.
Illinois does not require you to reserve a name before starting your business, but if you are afraid someone else might use the name, then you may want to consider paying the $25 fee.
The $25 fee gives you name exclusivity for 90 days.
If your business isn’t ready yet and you want to protect that perfect name, a reservation is quite helpful.
This gives you peace of mind that your perfect business name won’t be taken by someone else.
However, if you are ready to start your LLC now and create your Articles of Organization, then there is no need to reserve the name.
Illinois Articles of Organization Fee
This is going to be perhaps one of the most important parts of forming your business – the Articles of Organization.
Once accepted, the Articles of Organization is what officially registers your LLC and locks in your business name.
In the State of Illinois, the Articles of Organization fee is $150 for hardcopy filings and $250 for online applications.
Online applications are $100 more because they are automatically expedited.
You only register your business once, so this is not a fee that you will have to pay annually.
Business License Fee
Not all types of businesses require a license, but many of them do, and each license has its own set of fees.
Your Limited Liability Company may require one license or multiple licenses depending on the type of business you will be running.
Furthermore, depending on the type of business, your Limited Liability Company may require licenses at both the local and federal levels.
You’ll need to check with your local government to see if you might need additional licenses for running an Illinois Business.
Whether you like it or not, there are fees to form an LLC.
Each state has their own LLC formation Fee, even if you go the DIY route and file your own documents directly with the IRS, you still have to pay the state fee.
The most affordable option is to figure out the formation process on your own and just pay the state fee.
However, missing a step or doing something incorrectly could end up costing much more.
So if the DIY route doesn’t sound like the route you want to take, you may want to hire an LLC formation service.
These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services (like LegalZoom or ZenBusiness) offer business services like LLC formation service, Illinois Articles of Organization filing, Illinois registered agent, general registered agent service, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, LLC Operating Agreement, and expedited service
They form any type of business entity such as LLC, PLLC (professional limited liability company), corporation, s corporation, sole proprietorship, foreign llc, domestic llc, non profit, etc.
A registered agent is simply a person or entity appointed to accept service of process and official mail on your business’ behalf.
You can appoint yourself, or in many states, you can appoint your business to be its own registered agent.
While you can serve as an agent for service of process for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes.
Sometimes it’s better for the business owner to hand off that responsibility to a professional.
A Registered Agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
There are a lot of Registered Agent services out there but we always like to recommend Northwest Registered Agent.
They handle everything you need to form your LLC and they include a free registered agent for a year!
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney.
Legal fees are not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Attorneys fees can range anywhere from $150 – $350 per hour or more while others might offer flat rate from $500 – $2000 to form you LLC and answer questions.
Of course, this all depends on the experience and location of the attorney as well as their specialties.
Foreign Qualification Fee
If you already formed your LLC in another state and are now expanding to Illinois, then you will be completing an “Application to Register” rather than the Articles of Organization.
In Illinois, the fee for an Application to Register is $150.
Thankfully, this is only a fee that you have to pay once and it will register you as a foreign llc.
Annual LLC Filing Fees
The state of Illinois requires all businesses submit Annual Reports that are due by the first day of your LLC’s anniversary month, which is the month your LLC was formed.
The annual filing fee is $75/year and the reports are filed online or via hard copy.
LLC’s are “pass-through” entities, meaning that the business itself doesn’t need to file federal or state tax returns (read more about that here).
Illinois also doesn’t impose a “franchise” or “privilege tax on LLC’s to transact business in the state.
They do require that any Illinois Business entity pay a “Personal Property Tax” which is 1.5% of your net income.
Illinois also has a few other tax rules:
- If your LLC is a resale business, it needs a Retailer’s Occupation Tax Number.
- If your LLC is a wholesale business, it needs a Resale Certificate Number.
- If your LLC hires employees, it will need to pay an unemployment insurance tax and a payroll tax. It also must obtain an Unemployment Compensation Number.
- If your LLC is set up to be taxed like a corporation, it will pay the 5.25% corporate income tax and a higher Personal Property Tax, 2.5% of its net income.
For more information on the types of taxes, take a look at the Illinois Department of Revenue website .
Taxes are filed via their online portal called MyTax Illinois.
If your LLC is set up as a Corporation, you won’t have to pay the Franchise Tax, but you will have to file a separate corporate tax return and pay the corresponding corporate tax rate.
Should I use an LLC Formation Service?
As you can see, there are several steps required to make sure that your LLC is formed correctly.
Hopefully this article helped you better understand what it takes to form an LLC in Illinois as well as understand the associated costs.
If this all still seems overwhelming, then this is where using a formation service comes in handy.
If you have a little bit of flexibility in your budget or you know that the DIY route is not for you, then we strongly recommend hiring an LLC Formation Service.
An LLC formation service will make sure everything gets filed properly and expediently and they will make sure that all of your annual maintenance deadlines are not missed.
LLC formation services specialize in just that, forming businesses.
They streamline the process for you and are there to answer questions, fix mistakes, and help with legal advice and needs.
Many of them even take care of your yearly maintenance and filings for you and offer registered agent service as well.
Here are three popular LLC formation service options to give you an idea of what they offer:
ZenBusiness is one of the most affordable options and a great value.
They are a little smaller and newer than the other two mentioned below, but have excellent customer reviews and overall features.
Northwest Registered Agent also included a year of registered agent service with any LLC formation package. They also offer premium customer support that is unmatched to their competitors.
If you anticipate questions or more complex LLC formation, they are the top choice. You definitely get what you pay for and more with Northwest.
Northwest is our best overall value option.
$0 + State Fee
IncFile will form your LLC for free and include a full year of registered agent service with any LLC formation package.
IncFile is at the top of our list of the best LLC formation services, year after year.
If you decide to go the DIY route and form your own LLC but need help with the Annual Reporting, checkout the following services:
For $49, MyCompanyWorks will make sure you don’t miss a deadline. They are the most affordable annual report service out there and they offer a 100% satisfaction guarantee.
Their price varies depending on the service package that you choose, but their fully-managed services take care of everything so you don’t have to.
And if you want it all done for you, LLC formation and Annual Reporintg, then you may want to look into MyCorporation:
For $99 MyCorporation will form your LLC and also include a full year of their managed annual report service.
Forming your business correctly is going to be your first step to success and now that you know the Illinois LLC Cost, you are one step closer.
If you don’t file the Articles of Organization or Application for Registration, you’ll be prohibited from doing business in the state until you do.
It is also important to stay on top of your Statement of Information reports and Franchise Tax payments or other annual payments.
If you fail to file and pay them on time, your LLC will be deemed “delinquent” and required to make outstanding payments within 60 days.
The same goes for the Sales and Use Tax.
The state has the right to suspend a delinquent LLC’s powers, rights, and privileges until it has filed its missing documents and made its overdue payments.
Late franchise and other tax payments will also incur a penalty amounting to 5% of the unpaid tax per month, up to 25% of the total tax.
This might all seem like a-lot, but many of these charges are one time fees and the annual maintenance fees are much smaller.
So it is in your best interest to set up your LLC correctly and stay on top of any due taxes and fees.
To find more information on Illinois Law pertaining to doing business in the state or tax information, visit the Illinois Secretary of State site here.
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illinois.gov "Illinois Department of Commerce Step by Step Guide" Page 1 . April 7, 2021
IRS.gov "Limited Liability Company (LLC)" Page 1 . April 7, 2021
SBA.gov "Business Structures - Limited Liability" Page 1 . April 7, 2021
SBA.gov "Register with State Agencies" Page 1 . April 7, 2021