Forming an LLC (Limited Liability Company) in Illinois is easy and affordable. The following are few procedural steps on how to start an LLC in Illinois. LLCs can be formed in two ways, domestic and/or foreign. If you are planning to set up an LLC in states other than Illinois, visit How to Start an LLC.
On this page, you’ll learn about the following:
- Why an LLC in Illinois
- How to Start an Illinois LLC
- After Starting your Illinois LLC
- Business That Are Leading the Industry In Illinois
Why an LLC in Illinois
Illinois is one of the states that have perfect business structures. Over 1.2 million businesses are operating in Illinois including McDonald’s, Walgreens Boots Alliance, Abbott Laboratories, Caterpillar Inc, and some more. Creating around 68, 000 jobs these businesses help the economy to grow at a 3.5% rate. The state has become one of the hottest states for small businesses, mostly for the lines of credit they receive.
Customized Business Dealings options
If you’re in Illinois, starting an LLC, then you can decide whether you want a manager-managed LLC or a member-managed LLC. The rule for having either of them is extremely lenient. If you’re opting for member-managed then according to the acts formed, all the members owe a loyalty under which they have to take care of the LLC and its members to save its interests.
On the other hand, if a manager-managed Limited Liability company operating, the members owe no loyalty duties to the company. Now it is the choice of the LLC owners which level of protection will be great for their business or type of service, according to that, they can make a decision.
LLC stays free from unwanted partners
There are many instances in an LLC that a person or member of the LLC starts using their interests to promote their personal creditors. But in the Illinois LLC, if some member is found doing such a task, then the member who is assigning his benefits of membership will be unable to take the decisions of management.
This way, the member’s interests, and benefits are kept limited to the person to which they are assigned, and no extra person, mainly the creditor of some member, can take part in LLC managements which saves the LLC from issues caused due to unwanted increase in a number of partners.
No control rights to the creditors
There are acts formed in Illinois, especially for the LLC, which helps the member in protecting the control over LLC. In many states, there are laws due to which creditors get the right to become a part of decision making which can not be a good decision for the LLC as the creditor will always think of their benefits over the profits of LLC. But in Illinois, there are no controlling rights provided to the creditors. Still, the creditors have some passive rights.
For example, if there is a purchase order in the hands of the creditors, then for the foreclosure of that sale, one has to seek permission from a member assignee.
How to Start an Illinois LLC
Suppose you’re planning to invest in some profitable business structure or maybe about to set up your corporation in Illinois. In that case, forming an LLC in Illinois is the simplest option for you.
An LLC or a Limited Liability Company a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. This section gives you a step-by-step guide on How to Start an LLC in Illinois.
Step 1: Decide a Name for Your LLC
If you are to start an LLC in Illinois, the first thing you do is decide on a business or company name, and how to name your LLC may be tricky. Thus, you have the option to choose a name that complies with the Illinois business naming requirements. It must also be easily searchable for potential clients. Here is a step-by-step guide to follow when naming your Illinois LLC.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
- You can only get the EIN number when you have your name registration certificate with you.
What are the requirements when deciding a name for your LLC?
A name search is vital to make sure your business’ name is unique. Check the availability of your name with Business Entity Search on the Illinois Secretary of State’s website. Reserve the name by completing the Name Reservation Request Form for Domestic Entities.
- Don’t include words that could confuse people about your company. Words like ‘treasury, state department.’
- You should also avoid restricted words like ‘bank, attorney, university,’ because they may require a lawyer and more paperwork.
- As for a business website and your URL name, check if your name is still available for domain use with NameCheap.
Reserve a business domain
Even if you don’t have plans to set up a website today, it will help if you buy a domain to avoid others from using your name for their website, so do visit NameCheap for your domain name and Kinsta for web hosting.
If you have decided on your URL name and have reserved it, set up a professional email account with Google GSuite.
Step 2: Assign a Registered Agent in Illinois
A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will assist you with the registered agent service of process, including taxation reports and annual report filing as well as receive significant tax forms, legal documents, a notice of lawsuits, and other official government correspondence in Illinois. Choosing an Illinois-registered agent for service for your LLC is required.
Make sure your registered agents are residents of Alabama. It could also be a business. Here are the recommended agents and employees for you:
These five LLC formation services are recommended services from registered agents as they are authorized to conduct business in Illinois. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Articles of Organization in Illinois
A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the Illinois Secretary of State. The report filing fee is $150 and you may file them online or by mail.
This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Illinois, like if it is a member-managed or managers-managed.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Illinois LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county.
Step 4: Create Your Illinois LLC Operating Agreement
An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
Starting an LLC in Illinois does not require you to have an operating agreement, but it is ideal to have one that contains all your details of business operation.
Step 5: Filing an Illinois LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes. It is like a Social Security number dedicated to a business.
It is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). You will need this number for tax filing and to determine tax classification options.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
After Starting your Illinois LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business account
- File Illinois business permits & licenses
- Get liability for business insurance with coverage for employees
- File an Illinois LLC annual report or biennial report
- Already existing LLCs that wish to operate in Illinois must register as a foreign Illinois LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Business That Are Leading the Industry In Illinois
Are you looking to start an LLC in Illinois? If yes, then you have to think of a good and profitable business idea. If you cannot figure out the best flourishing industry in Illinois, then here are the best business.
The export business is thriving very well in the Illinois state due to the state’s favorable rules and regulations. That is why more companies have started entering the field of exporting business. The state’s primary export product is machinery, chemical, equipment used in transportation, and agricultural processed well.
The state has exported a material of 53,000 million dollars which shows the golden opportunity offered by this niche. So, don’t waste any time further and decide the product that you want to export in the state.
Illinois is known for the manufacturing field worldwide, second in manufacturing food products and first in the construction business. The state has the most significant portion of countries manufacturing share of construction machinery, making the manufacturing business a fair choice. Chemicals used in the pharmaceutical industry are also made on a larger scale in the country.
Rocks that are found in the Illinois State are known for being the best source of coal, minerals, and petroleum also. According to the census, more than 8 billion tonnes of coal is produced in the state. Also, the amount of petroleum gained from this mining is around 4 billion barrels. These businesses are more than enough for a person to make up their mind regarding starting a mining business.
The state is a hose of 1500 different types of fertile soil, which can help you grow any simple ornamental crop. If a person is interested in agriculture, they can also opt to enter the business field and start farming-related businesses.
For a small investment business, here are some options.
- Restaurant and food business
- Departmental stores
- Digital marketing services
Illinois LLC Formation Review
Time needed: 1 hour and 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Illinois. Click on the steps in this list to read the full detail.
- Name your Illinois LLC
The first thing you must do is to choose a company name, which should include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
- Choose a registered agent
In Illinois, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC, either a traditional corporation or a foreign corporation.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
A “domestic LLC” is one that conducts business in a state where it was formed. Meanwhile, a “foreign LLC” is an existing LLC that extended business to another state.
For Domestic LLCs, it is vital to have a Certificate of Name Reservation and Certificate of Formation. For the foreign LLCs, you must have a Certificate of Good Standing.
The cost to form an LLC varies per state.
Seldom do L.L.C.s use D.B.A. or a ‘Doing Business As’ name nor a fictitious business name. However, if you want to have one, you make read more about DBAs here.
This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
>Your name should have “L.L.C. or LLC” or the phrase “limited liability the business.”
>Do not include words that could create confusion between your LLC and any government business.
>Words like ‘bank, attorney, university’ are restricted as well.
>Lastly, your name should distinguish from other limited liability corporations, limited partnerships, or registered limited liability partnerships.
Typically, you can file your LLC name online or by mail. Check with the state where you will set up your LLC name. Take note that the fees for business names may also vary per state.
As for a website and your URL name, check if your name is still available for URL use with NameCheap to see if your name is available as a web domain. Even if you don’t have plans to set up a website today, it will help if you buy a URL. Buying it can help to prevent others from getting your name; check out WPEngine, Kinsta, and GoDaddy for hosting and building your website.
No. Never mail these documents or payments to the Secretary of State directly.
The reason you might need an E.I.N. is that it would help for three reasons:
>Opening a business bank account
>Filing and managing federal and state taxes
>Hiring employees or agents
You are not required a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
International EIN applicants do not need an SSN to get an EIN.
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