Form an Illinois LLC
LegalZoom is your best resource to start your limited liability company online today. We provide a user-friendly service with hefty customer support to help you create an LLC in three easy steps. Protect your business and personal assets and organize your business with the help of experienced business formation experts.
When you form your Illinois LLC with LegalZoom, we prepare and file your articles of organization with the Business Services Department of the Illinois Secretary of State. We also conduct a name search for your Illinois LLC, to assist you in the preparation of your operating agreement and other customized services corresponding to your needs. Once your articles of organization have been successfully filed, your Illinois LLC has been formed and begins its existence as a legal business entity.
LegalZoom LLC Overview
Registering an LLC Name: Choosing a business name is one of the first steps in the process of forming your Illinois Limited Liability Company. The name that you choose:
Must contain, as the last words of the name, the words "limited liability company" or either of the following abbreviations: "L.L.C." or LLC.
May not contain a word or phrase, or an abbreviation or derivation thereof, the use of which is prohibited or restricted by any other statute of this State unless the restriction has been complied with
Must consist of letters of the English alphabet, Arabic or Roman numerals, or symbols capable of being readily reproduced by the Office of the Secretary of State
Must not contain any of the following terms: "Corporation," "Corp.," "Incorporated," "Inc.," "Ltd.," "Co.," "Limited Partnership" or "L.P."
Must be the name under which the LLC transacts business in this State unless the LLC also elects to adopt an assumed name or names as provided in this Act; provided, however, that the LLC may use any divisional designation or trade name without complying with the requirements of this Act, provided the LLC also clearly discloses its name
Must not contain any word or phrase that indicates or implies that the limited liability company is authorized or empowered to be in the business of a corporate fiduciary unless otherwise permitted by the Commissioner of the Office of Banks and Real Estate under Section 1-9 of the Corporate Fiduciary Act. The word "trust", "trustee", or "fiduciary" may be used by a limited liability company only if it has first complied with the Corporate Fiduciary Act
Must contain the word "trust", if it is a limited liability company organized for the purpose of accepting and executing trusts
Must be distinguishable from any other registered Illinois Limited Liability Company or other business entity and any reserved names on record.
LegalZoom allows you to choose up to 3 names, in order of preference. We will conduct a name check for your Illinois Limited Liability Company before filing to see which names are available.
How to Register: Once you have chosen an available name, LegalZoom can help you register your name with the state.
Articles of Organization: In any Illinois LLC formation, articles of organization must be filed with the Business Services Department of the Secretary of State. State law requires that certain information be included in the articles of organization of your Illinois LLC formation. This information must include:
The company name
The address of its principal place of business, which need not be in the state of Illinois
The purposes for which the LLC is organized
The address of the LLC's registered office in Illinois
The name of the LLC's registered agent at that office
A statement on the LLC's duration, (it may be perpetual or for a set amount of time), if for a set amount of time, then the articles must specify the latest date, if any, on which the LLC is to dissolve
A statement as to whether the LLC is to be manager-managed, and if so, the names and business addresses of the initial manager or managers, if the LLC is to be member-managed, then the names and addresses of the initial member or members
The name and address of each organizer
Any other provisions, not inconsistent with law, that the member elect to be set forth including any matters that are required to be or may be included in an operating agreement under this article
Filing: Your LLC is considered organized once the articles of organization and one copy (or conformed copy) are delivered to the Business Services Department of the Secretary of State, and the Secretary of State finds that they are in compliance with state requirements. The document must be executed by at least one person, who need not be a member of the LLC at or after formation. The person executing the document must sign it and indicate his name and title (the capacity in which the person signs).
One certified copy of the articles of organization will be issued, and the other certified copy will be returned to the organizer or members.
Additionally, an Illinois LLC formation generally requires inclusion and/or consideration of the following:
Organizers: Any natural person over the age of 18 or entity may form a LLC. The natural person or entity need not be a member of the LLC.
Minimum Number of Organizers: One or more natural persons or business entities.
Eligibility:An organizer may be a natural person, partnership, domestic or foreign limited partnership, domestic or foreign LLC, trust, estate, association, corporation, governmental body, or other juridical being.
Operating Agreement: Although not required, LLC members may adopt an operating agreement for the company, which may also be amended and repealed as allowed by the agreement or applicable law. The articles of organization may contain restrictions or prohibitions on the power of the members to adopt, amend, or repeal an operating agreement. If there is more than one member, any operating agreement shall initially be agreed to, in writing, by all of the members.
Membership: A limited liability company must have one or more members. Requirements:
Minimum Number of Members: One or more.
Eligibility Requirements: A natural person or an entity
Procedure for Membership: The member may acquire an interest in the LLC after the filing of the articles of organization, a person who acquires a membership interest directly from the limited liability company or is a transferee of a membership interest may be admitted as a member with unanimous consent of the members.
Resignation of Membership: Certain prohibitions exist surrounding the ability of a member to resign from the company. A member of a member-managed company has the power to dissociate from a company at any time.
A member cannot dissociate from the LLC before dissolution and winding up if an operating agreement does not specify in writing the time or the events upon which a member may dissociate
The member's dissociation from a member-managed company is wrongful only if it is in breach of an express provision of the agreement
A member who wrongfully dissociates from a member-managed company is liable to the company and to the other members for damages caused by the dissociation. The liability is in addition to any other obligation of the member to the company or to the other members.
Contribution:The contributions of a member to the limited liability company may be in cash, property, or services rendered or a promissory note or other binding obligation to contribute cash or property or to perform services.
Registered Agent In Illinois
LegalZoom can also provide your business with a Registered Agent in Illinois. Every Illinois LLC must designate a registered agent -- the person or office charged with receiving official state correspondence and notice if the company is "served" with a lawsuit.
Eligibility Requirements: The Illinois registered agent may be: (1) an individual resident of this State, (2) a domestic or foreign corporation having a place of business in, and authorized to do business in, this State. If the agent is a corporation, the corporation must be authorized by its articles of incorporation to act as an agent.
Registered Office: The registered office may be a place of its business in Illinois
Illinois Secretary of State
Once an Illinois LLC has been created, the Illinois Secretary of State will require certain recurring responsibilities and duties. The most important of these are explained below. For further information, refer to the Illinois Secretary of State office.
Annual Report: Each LLC shall file a biennial report with the Illinois Secretary of State on or before the anniversary of its organization signed by a manager, member or agent that lists:
The LLC name
The street address or rural route number, not a post office box only, of its registered office
The name of it registered agent at that office
The street address or rural route number of its principal place of business.
The names and addresses of its managers, or if none, the members
Additional information that may be necessary or appropriate in order to enable the Secretary of State to administer this Act and to verify the proper amount of fees payable by the limited liability company.
The annual report shall be made on forms prescribed and furnished by the Secretary of State. The information must be given as of the date of execution of the annual report. The annual report shall be executed by a manager or, if none, a member designated by the members. It must be delivered to the Secretary of State within 60 days immediately preceding the first day of the anniversary month.
Records:Each limited liability company shall keep following records open to inspection at its office:
A list of the full name and last known address of each member setting forth the amount of cash each member has contributed, a description and statement of the agreed value of the other property or services each member has contributed or has agreed to contribute in the future, and the date on which each became a member.
A copy of the articles of organization, as amended or restated, together with executed copies of any powers of attorney under which any articles, application, or certificate has been executed
Copies of the limited liability company's federal, State, and local income tax returns and reports, if any, for the 3 most recent years.
Copies of any then effective written operating agreement and any amendments thereto and of any financial statements of the limited liability company for the 3 most recent years.
Acts Triggering Dissolution: Unless otherwise provided in the articles or a written operating agreement, a limited liability company is dissolved upon the happening of any one of the following events:
An event specified in writing in the articles or operating agreement
Consent of the number or percentage of members specified in the operating agreement
An event that makes it unlawful for all or substantially all of the business of the LLC to be continued, unless the illegality is cured within 90 days
On application by a member or a dissociated member, upon entry of a judicial decree that:
o The economic purpose of the company is likely to be unreasonably frustrated
o Another member has engaged in conduct relating to the company's business that makes it not reasonably practicable to carry on the company's business with that member;
o It is not otherwise reasonably practicable to carry on the company's business in conformity with the articles of organization and the operating agreement
o The company failed to purchase the petitioner's distributional interest
o The managers or members in control of the company have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent with respect to the petitioner
On application by a transferee of a member's interest, a judicial determination that it is equitable to wind up the company's business.
An LLC can offer certain tax advantages over a corporation, including the availability of more deductions. Additionally, an LLC is not required to be a separate tax entity like a corporation;instead, it can be a "pass-through entity," so that the LLC owners report business losses or profits on their personal tax returns, like a partnership.
Federal Income Tax: Unless you elect to tax the limited liability company as a corporation, the IRS treats single-member LLCs as sole proprietorships for tax purposes. This means the LLC itself does not pay taxes and does not have to file a tax return. Unless you elect to tax the limited Liability company as a corporation, the IRS treats multi-owned LLCs as partnerships for tax purposes. This means that LLC owners each pay taxes on their lawful share of the profits on their personal income tax returns, not the LLC itself. If you desire, by filing IRS Form 8832, you may elect corporate taxation if you regularly need to keep a substantial amount of profits in your LLC.
State Income Tax: The LLC tax rate for Illinois is variable, depending on Illinois taxable net income.
Federal Tax Identification Number: Your LLC may need to obtain a federal tax identification number (also known as an employment identification number/ EIN), which is similar to an individual's social security number. Generally, you will not need a separate EIN number for your LLC as long as you are the sole owner and the LLC has no employees. However, if you are not the sole owner of the LLC or if the LLC has employees, your LLC will need a separate EIN number to open a bank account and for certain tax filing requirements LegalZoom can prepare your Federal Tax ID Application if you have not already done so.
Filings must be made with the Illinois Secretary of State, along with the appropriate state filing fee. When appropriate, two checks must accompany the document, one payable to the judge of probate and one payable to the State Secretary, covering all charges for the State Secretary.