How to Start an LLC in Illinois (2026): Step-by-Step Guide

Published: May 2026 · Updated for the 2026 tax year

Starting an LLC in Illinois is a clean, low-cost process — $150 to file, $75 a year to keep it alive — right up until you meet the Personal Property Replacement Tax, which most "how to start an LLC in Illinois" guides don't mention at all. This guide walks through every step, what an Illinois LLC actually costs (year by year, not just the headline filing fee), how to form one from outside the US, and the deadlines that quietly dissolve LLCs that miss them.

Form your Illinois LLC for free with Jupid. We prepare and file your Articles of Organization — you pay only the state's $150 filing fee, with no service markup. Start your Illinois LLC →

A note from Slava

I'm Slava, co-founder and CEO of Jupid. Before this I co-founded and scaled an AI-powered accounting platform to around $30M in revenue and more than 100,000 business users — the kind of company that ends up filing a lot of paperwork in a lot of states and watching customers trip over the same potholes again and again.

Illinois is one of the friendlier states to form in: $150 to file, $75 a year, no franchise tax, no newspaper publication. The pothole here isn't the formation fee — it's the Personal Property Replacement Tax, a 1.5% levy on the net income of partnership-taxed and S-corp-taxed LLCs that almost every other Illinois guide either ignores or gets wrong about who pays it. If you're a single-member LLC, it probably doesn't touch you. If you bring on a partner or elect S-corp, it does, and nobody told you. That's the gap I want this guide to close.

So this guide does the things the others skip: it adds up the real cost over time (including the $100 late-report penalty and the Chicago business license), it explains the replacement tax correctly, it spells out the non-resident path, and it hands you a dated checklist for your first 90 days. Everything here is current for 2026, with links to the official sources so you can verify before you file.

Illinois LLC at a glance

Sources: Illinois Secretary of State — LLC publications and forms, Illinois Department of Revenue.

Should you actually form your LLC in Illinois?

If you live in Illinois and run your business from Illinois, you should almost certainly form your LLC in Illinois. The popular advice to "form in Wyoming or Delaware instead" doesn't help you here: an out-of-state LLC that does business in Illinois has to register as a foreign LLC with the Secretary of State — which means a foreign-qualification filing, an Illinois registered agent, and the same $75 annual report and replacement tax you'd owe anyway, plus a second set of fees in the other state. You end up paying more for more paperwork.

Forming elsewhere makes sense in a narrower set of cases: you genuinely don't operate in Illinois (no office, employees, or significant activity here), you're a non-resident with no US footprint at all, or you have a specific reason — outside-investor expectations, for instance — that points to Delaware. If you're weighing it, our best state to form an LLC tool walks through the trade-offs, and our Wyoming LLC guide and Ohio LLC guide cover other low-cost options in detail.

For everyone else: Illinois it is. Here's how.

How to start an LLC in Illinois, step by step

1. Choose and check your LLC name

Your name has to include "Limited Liability Company," "LLC," or "L.L.C.," and it has to be distinguishable from every other entity on the Secretary of State's records. A handful of words — "bank," "insurance," and similar — are restricted. Search the Illinois business entity search before you get attached to anything. Need ideas or want to check a few options at once? Our Illinois business name generator is built for exactly that. If you want to lock a name in before you're ready to file, a Name Reservation (Form LLC-1.15) holds it for 90 days for $25.

2. Appoint an Illinois registered agent

Every Illinois LLC needs a registered agent who can accept legal papers and official notices on its behalf, plus a registered office that's a physical Illinois street address — a P.O. box won't do. The agent is either an individual who actually lives in Illinois or a registered agent company authorized to do business in the state. You can serve as your own LLC's agent if you're an Illinois resident; the LLC itself cannot. The agent's name and address become public record, which is one reason people who'd rather not publish a home address — and everyone who lives out of state — hire a commercial registered agent for roughly $100–$150 a year.

3. File the Articles of Organization (Form LLC-5.5)

This is the step that creates your LLC. File Form LLC-5.5 online through the Secretary of State's LLC application portal for $150 — the fee is the same whether you file online or by mail. You'll list the LLC name, the registered agent and office, the management structure (member-managed or manager-managed), the business purpose, and the principal place of business. Standard processing typically takes about a week or two, and the timeline moves with the Secretary of State's workload. If you need it faster, expedited service runs roughly $100 extra for about a 24-hour turnaround — confirm the current expedite fee on ilsos.gov. Once it's approved, download the stamped copy from the portal — your bank will ask for it.

If you're a real-estate investor or hold several distinct assets you want walled off from one another, Illinois also offers the Series LLC (Form LLC-5.5(S)), which forms one umbrella entity with separate internal "series." The filing fee is $400 instead of $150, and the structure adds complexity, so it's worth it only if you have a concrete reason for it.

4. Write an operating agreement

Illinois doesn't require you to file an operating agreement, and the LLC Act doesn't strictly mandate one — but you should have one anyway. You keep it with your company records. It sets out ownership percentages, how profits are split, who can make decisions, and what happens if a member leaves. Even a single-member LLC should have one — it's part of how you keep the liability shield intact, and your bank will often ask to see it.

5. Get your EIN from the IRS

An EIN is your LLC's federal tax ID, and you need it to open a bank account, hire anyone, and file taxes. It's free. Apply at irs.gov once your Articles are approved — if you have an SSN or ITIN, the online application takes a few minutes. If you don't (common for non-resident owners), file Form SS-4 by fax, mail, or the IRS international phone line; see the non-resident section below. Never pay a third party for the EIN itself — the number is always free from the IRS.

6. Register for Illinois state taxes and local licenses

Forming the LLC doesn't cover your tax accounts or local obligations. If you'll hire employees, sell taxable goods, or otherwise owe Illinois tax, register with the Illinois Department of Revenue through MyTax Illinois (Form REG-1) — that's where you get a sales tax (ROT) account and a withholding account. Many municipalities require a local business license: the City of Chicago business license, in particular, varies by activity and can run $250 or more; suburban towns have their own rules. And any professional or industry license you'd need as a sole proprietor — contractor, food service, liquor, cosmetology, real estate — you still need as an LLC.

7. File your Annual Report every year

Illinois LLCs file an Annual Report (Form LLC-50.1) with the Secretary of State each year, and the deadline is tied to your LLC's birthday: it's due before the first day of your anniversary month — the month your LLC was originally organized. The fee is $75, and you can file it online through the SOS portal. Miss it by more than 60 days and a $100 penalty is added; keep ignoring it and the state will administratively dissolve the LLC. For most LLCs formed in 2026, the first annual report lands in the anniversary month in 2027 — put it on your calendar now.

What an Illinois LLC really costs, year by year

Most guides quote "$150 plus $75 a year" and stop. Here's the fuller picture.

Year one

Every following year

The replacement tax nobody flags. Illinois levies a Personal Property Replacement Tax of 1.5% on the net income of partnerships and S-corporations — which sweeps in multi-member LLCs taxed as partnerships and LLCs that elect S-corp status. It's paid by the entity on Form IL-1065 (partnership) or IL-1120-ST (S-corp), and it's on top of the regular Illinois income tax that flows through to members' returns. The one piece of good news: a single-member LLC that's a disregarded entity — income reported on the owner's Schedule C — generally isn't subject to it. So if you're a solo founder, it likely doesn't touch you; the moment you add a partner or elect S-corp, build the 1.5% into your numbers. Almost no other Illinois LLC guide explains this correctly.

A sidebar for profitable multi-member LLCs: the PTE tax. Illinois offers an optional pass-through entity (PTE) tax — the workaround to the federal $10,000 SALT-deduction cap. An electing partnership- or S-corp-taxed LLC pays 4.95% at the entity level on its net income, and members claim a credit on their Illinois returns. It's election-based and only worth the math if the LLC is meaningfully profitable; ask your accountant. The Illinois Department of Revenue PTE page has the details.

DIY versus a formation service versus Jupid. Doing it yourself costs the state fees and your time. A formation service charges $0–$300 on top of the state fees (the "$0" packages still pass through the $150 filing fee and then upsell you a registered agent and a "compliance" subscription). Jupid forms your Illinois LLC for free — you pay only the state filing fee — and then handles the bookkeeping and tax filings afterward, which is where most of the ongoing cost and hassle actually lives. To model the annual numbers for your situation, use our Illinois LLC annual tax and fee calculator.

Forming an Illinois LLC as a non-resident or foreign founder

You can own an Illinois LLC without being a US citizen or resident — Illinois imposes no residency requirement on members or managers. The practical hurdles are an Illinois registered agent, an EIN, a US bank account, and your US and Illinois tax filings.

Registered agent. If no member or manager lives in Illinois with a real street address, you must use a commercial registered agent here. Budget around $100–$150 a year. P.O. boxes and mailbox-store addresses don't qualify — the registered office has to be a physical Illinois address.

Getting an EIN without an SSN. The IRS online EIN tool requires the responsible party to have an SSN or ITIN, so foreign founders generally can't use it. Instead, file Form SS-4: on line 7b, where it asks for the responsible party's SSN/ITIN/EIN, write "Foreign" or "N/A" — don't invent a number — and put the actual individual who controls the LLC on line 7a. Submit it by fax or mail, or call the IRS international EIN line (it's not toll-free), where someone outside the US can get the number over the phone. Check the current Form SS-4 instructions for the right fax number and phone number, since the IRS changes them. Fax turnaround is usually a few business days; phone is immediate. The EIN is free.

ITIN. An ITIN (Form W-7) is a tax ID for individuals who aren't eligible for an SSN. Your LLC gets an EIN; you as an owner may separately need an ITIN if you have to file a personal US return. ITINs are issued with a tax return attached or through an IRS Certifying Acceptance Agent, can take roughly 7–11 weeks, and expire if unused for three consecutive years.

The Form 5472 obligation — don't skip this. A single-member LLC owned by a non-US person is a "disregarded entity" that generally must file Form 5472 along with a pro-forma Form 1120 every year, reporting transactions between the LLC and its foreign owner. The penalty for missing it is $25,000. No Illinois LLC guide I've seen mentions this; build it into your annual calendar from day one.

US bank account. Most US banks want the owner physically present to open a business account, along with the EIN confirmation letter (CP 575 or a 147C), the filed Articles of Organization, the operating agreement, and a passport. Several fintech business-banking platforms onboard non-resident-owned US LLCs remotely — eligibility and policies change, so check current terms before you rely on any of them. You'll typically need a US business address, which can be your registered agent or a virtual office depending on the bank.

Illinois tax. Pass-through income is taxed at Illinois's flat 4.95% on the member's return, and the 1.5% replacement tax applies if the LLC is partnership- or S-corp-taxed (Form IL-1065 / IL-1120-ST). A non-resident member with Illinois-source income may owe Illinois nonresident income tax, and the LLC may have a pass-through withholding obligation on Illinois-source income allocated to nonresident members (the Illinois PTE tax election can substitute for that). The $75 annual report is due regardless of where the owner lives. Federally, if the LLC is engaged in a US trade or business, the foreign owner has US filing obligations of their own (Form 1040-NR for an individual, plus the Form 5472 filing above).

Registered agents and the Corporate Transparency Act (BOI)

Your registered agent is the person or company designated to receive lawsuits and official notices for the LLC. It has to be an Illinois resident with a physical street address or a registered agent company authorized in Illinois — and because the agent's address is public, plenty of Illinois residents hire a commercial agent purely to keep their home address off the record.

On the federal beneficial-ownership side: under the Corporate Transparency Act, LLCs were originally required to file a Beneficial Ownership Information (BOI) report with FinCEN. That changed. FinCEN's interim final rule, published March 26, 2025, redefined a "reporting company" to mean only entities formed under foreign law that register to do business in a US state. As of early 2026, that means an Illinois-formed LLC — even one with foreign owners — has no BOI filing obligation. The rule is still labeled "interim final" and FinCEN has said it intends to finalize it, so this could shift; check fincen.gov/boi before you assume one way or the other. (If you register a foreign-formed entity to do business in Illinois, the 30-day BOI deadline still applies to that entity, though it need not report US-person owners.)

Your first 30, 60, and 90 days

Days 1–7

• Get your EIN from the IRS (free; online if you have an SSN/ITIN, otherwise by fax, mail, or phone).
• Adopt your operating agreement — not filed with the state, kept with your records. Single-member LLCs need one too.
• Check your BOI status. As of early 2026 a domestic Illinois LLC has no FinCEN filing to make; re-verify at fincen.gov/boi.

Days 1–30

• Open a US business bank account (EIN letter, filed Articles, operating agreement, ID).
• Register with the Illinois Department of Revenue via MyTax Illinois (Form REG-1) if you'll hire, sell taxable goods, or owe other Illinois tax.
• Apply for a City of Chicago or municipal business license if your city requires one — some want it before you start operating.
• Get any professional or industry licenses your work requires, and look into business insurance (general liability now; workers' comp once you have employees in Illinois).

Days 1–60

• Set up bookkeeping; if the LLC is or will be multi-member or S-corp-taxed, track net income for the 1.5% replacement tax, and evaluate the Illinois PTE tax election if you're profitable.
• If you're a foreign-owned single-member LLC, note the annual Form 5472 + pro-forma 1120 filing.
• Calendar your anniversary month so the annual report doesn't slip.

By day 90 — no hard state deadline. Unlike California, Illinois has no 90-day initial report. Just confirm everything above is done and run a "good standing" check on the SOS portal.

Every year: file Form LLC-50.1 (the Annual Report), $75, before the first day of your anniversary month — more than 60 days late adds a $100 penalty, and continued non-filing leads to administrative dissolution. If you're partnership- or S-corp-taxed, file Form IL-1065 or IL-1120-ST with the 1.5% Personal Property Replacement Tax.

Common mistakes with Illinois LLCs

Assuming a Wyoming LLC dodges Illinois compliance. Why it hurts: if you operate in Illinois, the out-of-state LLC has to register here as a foreign LLC, so you owe the $75 annual report and the replacement tax anyway — plus the other state's fees and a second registered agent. Fix: if Illinois is where you do business, form in Illinois.

Missing the anniversary-month annual report. Why it hurts: a $100 penalty and, if you keep ignoring it, administrative dissolution — which freezes your ability to do business and enforce contracts. Fix: calendar your anniversary month the week you form, and don't wait for a reminder that may not come.

Forgetting the Personal Property Replacement Tax. Why it hurts: multi-member and S-corp-taxed LLCs owe 1.5% of net income on top of the income tax that passes through — and it's an entity-level filing (IL-1065 / IL-1120-ST) that's easy to overlook the first year. Fix: the moment you have a second member or elect S-corp, set up the IL-1065/IL-1120-ST filing and budget the 1.5%.

Skipping the City of Chicago (or municipal) business license. Why it hurts: operating without a required local license invites fines and can stall a lease or a permit. Fix: check your city's requirements during your first month — Chicago's BACP site lists what each activity needs.

How Jupid helps

Jupid forms your Illinois LLC for free — you pay only the state's $150 filing fee, with no service markup and no surprise "compliance" subscription. After that, Jupid is your AI accountant, working in WhatsApp and iMessage the same way you already text. It connects to your business bank account, automatically categorizes your transactions (around 95.9% accuracy), keeps your deductions organized, and prepares your tax filings with CPA review before anything is submitted. For an Illinois LLC, that's the part that actually takes time year after year — the $75 annual report you'll just pay, but clean books, the replacement-tax math if you're multi-member, and a tax return that holds up are work, and that's the work Jupid does for you. Start your Illinois LLC free with Jupid →

Frequently asked questions

How much does it cost to start an LLC in Illinois in 2026? The state filing fee for the Articles of Organization (Form LLC-5.5) is $150 — the same online or by mail. After that, the main recurring cost is the $75 annual report. Optional add-ons: about $100 for expedited filing, $25 to reserve a name, and roughly $100–$150 a year if you hire a commercial registered agent.

Do I need a registered agent for an Illinois LLC? Yes. Illinois requires every LLC to maintain a registered agent with a physical Illinois street address — it can be you (if you live in Illinois), another Illinois resident, or a registered agent company. The LLC cannot be its own agent, and P.O. boxes are not allowed.

What is the Illinois Personal Property Replacement Tax, and does my LLC owe it? It's a 1.5% tax on the net income of partnerships and S-corporations — which captures multi-member LLCs taxed as partnerships and LLCs that elect S-corp status. A single-member LLC that's a disregarded entity (income on the owner's Schedule C) generally doesn't owe it. It's paid on Form IL-1065 or IL-1120-ST, on top of the regular income that passes through to members.

Does Illinois require LLCs to publish a formation notice in a newspaper? No. Unlike New York, Arizona, or Nebraska, Illinois has no newspaper publication requirement for LLCs. Some Illinois counties have a publication step for assumed-name registrations by sole proprietors and partnerships — that's a different thing and doesn't apply to LLCs.

Can a non-US resident own an Illinois LLC? Yes. Illinois imposes no citizenship or residency requirement on members or managers. You'll need a commercial registered agent with an Illinois street address and an EIN (which you can get without an SSN), and you'll still file the $75 annual report. A single-member LLC owned by a non-US person must also file Form 5472 with a pro-forma Form 1120 every year, or face a $25,000 penalty.

How long does it take to form an LLC in Illinois? Standard online filings typically take about a week or two, though processing times fluctuate with the Secretary of State's workload — check the SOS site for current estimates. Expedited service (about $100 extra) usually drops that to roughly 24 hours.

What is an Illinois Series LLC? It's an LLC structure that can hold multiple "series" of assets and liabilities under one umbrella entity — popular with real-estate investors who want each property walled off. You form it with Form LLC-5.5(S) for a $400 filing fee instead of the standard $150, and it adds complexity, so it's worth it only if you have a concrete reason.

Official sources

• Illinois Secretary of State — LLC publications and forms (Form LLC-5.5, $150; Form LLC-5.5(S) Series LLC, $400; Form LLC-1.15 name reservation, $25)
• Illinois SOS — online LLC formation portal
• Illinois SOS — LLC annual report instructions (Form LLC-50.1, $75, anniversary-month deadline, $100 late penalty)
• Illinois SOS — business entity search
• Illinois Department of Revenue (4.95% flat income tax, Personal Property Replacement Tax, PTE tax) · Replacement Tax detail
• MyTax Illinois — business tax registration (Form REG-1), sales and withholding accounts
• City of Chicago — Business Affairs & Consumer Protection — Chicago business license
• IRS — get an EIN · Instructions for Form SS-4 · About Form 5472
• FinCEN — Beneficial Ownership Information
• Related on Jupid: Illinois LLC formation · Illinois LLC annual tax and fee calculator · best state to form an LLC · Illinois business name generator · what you need to start an LLC

This guide is general information, not legal or tax advice. Fees, deadlines, and thresholds change — verify with the official sources above before you file.

Last updated: May 2026.