There are many benefits to setting your business up as a limited liability company (LLC) in Illinois, but if you’re not familiar with the process, it can feel a bit daunting.
When you form an LLC in Illinois, you need to have a registered agent, and your LLC can’t act as its own agent. Such little caveats can take up some time, but forming an LLC isn’t as complex as you might think when you have all the information in front of you.
To help you get started, I’ve done the research and condensed the entire process into just 6 simple steps that you can follow to set up your own LLC in Illinois and get your business running.
6 Steps to Start an LLC in Illinois
Follow these simple steps to start an LLC in Illinois.
1. Name Your LLC
Choosing a name for your LLC is an important step, as it must be a unique name that you can ideally use for a long time. You can check the availability of name ideas you have using the Illinois Secretary of State’s online database.
It’s important to think of a name that’s relevant to your business but not too specific and restricting, as you may want to grow and expand in the future. It is possible to change your LLC name later on, but you must file a request with the state and follow the procedure.
Remember that your name must include “limited liability company” or “LLC,” and this will always be included on official paperwork and legal documents.
While you’re picking your name, it’s a good idea to reserve any relevant social media handles and a website domain.
2. Appoint a Registered Agent
The state of Illinois requires LLCs to have a registered agent. This is a person or business entity that’s responsible for receiving legal documents on behalf of your business. The agent must reside in the state of Illinois and must be available during normal business hours to accept service of process.
While your LLC cannot act as its own registered agent, you or another member can fill this role if you meet the requirements. You can also hire a registered agent for a yearly fee, but prices and quality of service can vary so you’ll need to research and choose accordingly.
3. File Articles of Organization
To form your LLC, you’ll need to file articles of organization with the Illinois Secretary of State. These must include the name and address of your LLC, the name and address of your registered agent, the purpose of your LLC, and the names and addresses of its members.
You can choose to make the formation official on any date within 60 days of submission, including the date you submit the files.
It’s possible to handle this process online on the Illinois Secretary of State website, by sending physical documents to the Secretary of State’s office, or in person. The fee for filing articles of organization and forming your LLC in Illinois is $150.
4. Obtain Licenses and Permits
Depending on the type of business you’re planning to run, you may need to obtain licenses and permits from the state of Illinois or your local government. There are various types of permits for different business needs, some requiring you to meet certain requirements and pay a fee.
Some examples of common business permits and licenses include:
- A sales tax permit, for businesses that sell goods or services and collect sales tax.
- A building permit, for businesses that construct or make changes to buildings.
- A food service permit, for businesses that prepare and sell food to the public.
- A liquor license, for businesses that sell alcohol.
- A professional license, for professionals such as lawyers, doctors, and accountants.
It’s important to have the correct permits and licenses for your LLC, so be sure to do the research and obtain what you need before you start offering your services to the public.
5. Create an Operating Agreement
An LLC operating agreement isn’t required by law, but it can be beneficial for both sole proprietor LLCs and those with multiple members. The agreement outlines in writing how the company will be managed and how it will deal with future challenges, to make sure your business is run to an agreed standard.
Drawing up an agreement will give your business more freedom, as you can decide your own set of rules. Businesses that don’t have one must instead adhere to the default laws of the state of Illinois.
Operating agreements typically include basic information on the business, your tax treatment preference, plus information on the employees, operating procedures, and management structure.
6. Receive a Certificate of Good Standing
Once you’ve officially formed your LLC, you can receive a Certificate of Good Standing that proves your business is in compliance with the state of Illinois’ requirements for maintaining its legal status.
This certificate is often required when you apply for a loan or other financing, enter into a contract, or register to do business in another state. It’s essentially a way for you to prove to third parties that your company is authorized to do business in the state of Illinois.
To obtain a Certificate of Good Standing, you’ll need to submit a form detailing basic information about your business, mostly the same information as what you needed for your articles of organization. The fee in Illinois is $25.
The Next Steps After Forming an LLC in Illinois
Once your LLC is all set up, there are other useful things you can do to make your new business run more smoothly and protect you from financial liability.
1. Apply for an Employer Identification Number (EIN)
Any business can apply for an EIN, but some businesses will be required to get one. If you plan to hire employees, or your LLC has more than one member, you’ll need to get an EIN for your business.
Once you have one, you’ll use it to file your business’s payroll and income tax returns instead of using your social security number. It allows you to keep your social security number private, and also lets you separate your business and personal finances.
2. Open a Business Bank Account
Another important step in separating your personal and business finances is to stop mixing your personal funds with your company money. By setting up a business bank account, you’ll be able to establish a financial profile for your company and apply for credit cards and loans without using personal finances.
You’ll also be able to protect your personal property from business liability, so if your business is sued and needs to pay the court, your personal assets will not be affected.
3. Set Up a Payment System
Pay.com is a user-friendly payment system that allows you to accept multiple payment methods, so your customers can pay you however it’s convenient for them. You can offer these payment methods on your website by integrating a personalized checkout page.On this page, you can showcase both your own branding and Pay.com’s top-grade security standards.
If you don’t have a website, you can also send direct Pay Links that lead to a secure checkout page.
The Bottom Line
While setting up an LLC does require a little time, the process is straightforward and the benefits are well worth the extra effort. Now that you know what kind of paperwork you need to fill in and what kind of information you have to prepare, all that’s left is to get started on picking your LLC name.