Establishing a limited liability company (LLC) in Illinois can be difficult and expensive. The good news is that you have options for ways to make the process easier. Using an LLC formation service in Illinois, like Tailor Brands, is one way to make the process go more smoothly. As for the cost, the exact amount may vary greatly depending on the state where you are looking to form an LLC. Illinois costs might include filing fees, professional fees, and administrative expenses. This article provides an overview of the costs of filing an LLC in Illinois.
Several steps in the LLC formation process include costs. Some costs are mandatory, while others are optional.
The Illinois Secretary of State does not charge you to search its database to see if the business name you want is available. If you want to reserve a name for your LLC or adopt an assumed name — also known as a DBA (“doing business as”) — you must pay a fee:
The filing and renewal fees for an assumed name are somewhat unusual. The Secretary of State will register a DBA for five years, but the five-year periods are static, meaning they begin and end simultaneously for everybody, regardless of when they filed their DBA. The registration periods end in years that are divisible by five. As a result, the amount that you must pay to register a DBA depends on when you file:
For example, if you file an assumed name registration in April 2022, it will remain valid for three years until April 2025. If you file in April 2023, it will be valid for two years.
The filing fee for articles of organization, the document that creates your LLC, is $150. A specialized type of LLC known as a series LLC has a $400 filing fee.
Once you have created your LLC, you must file annual reports with the Secretary of State. Each report has a filing fee of $75.
You may act as your registered agent at no cost or at least no monetary cost. The annual fee for a registered agent service can range from $199 to around $400. You may miss out on the benefits of using a registered agent service like Tailor Brands.
You are not required to create an operating agreement for your LLC, but it is highly advisable that you have one. The cost could range from $0 if you do it yourself to around $1,000 if you hire an attorney. You can also use Tailor Brands’ operating agreement service.
Your LLC may be subject to several ongoing expenses.
Your LLC’s state tax liabilities will depend on the type of federal income tax treatment that you have chosen. Some states require LLCs and other business entities to pay a franchise tax in exchange for legal protection from liability. Illinois does not have a franchise tax for LLCs.
Your LLC may need licenses or permits from local or state agencies to engage in specific business activities. Many of these licenses and permits require application fees and annual renewals.
Illinois does not have a general statewide business license requirement, except for businesses that sell or lease goods subject to sales tax. For that, your LLC will need a Certificate of Registration or Certificate of License from the Illinois Department of Revenue. You do not have to pay to obtain the certificate, but you will be obligated to collect and remit sales tax.
You may need permits or licenses from your local government, a state agency, or the federal government for specific activities. Examples of permits may include:
All Illinois LLCs must file annual reports with the Secretary of State. An annual report identifies an LLC’s registered agent and registered office. It also provides the names of all managers or members with management authority. The purpose of the annual report is to notify the state of any changes in an LLC’s management. The filing fee is $75 for the annual report.
While you must identify your LLC’s registered agent in each annual report, you cannot use this document to change your designated agent. That requires a separate filing with a filing fee of $25.
Most of the LLC formation costs are deductible from federal income taxes. Deductible costs may include the following:
LLC filing fee (articles of organization) | $150, or $400 for a series LLC |
Annual report | $75 |
Licenses and permits | Cost varies by municipality and/or county ● In the Chicago area, licenses and permits could cost $1,000 or more ● In other parts of the state, the cost could be around $100 |
Registered agent service (optional) | $199 to $400 |
Reservation of business name | $25 for 90 days |
DBA or assumed business name | $30 per year, payable for 5-year periods |
Operating agreement (optional) | $0 to $1,000 |
Starting an LLC in Illinois may seem like an overwhelming process. It requires preparing and filing paperwork to create the business entity, followed by more paperwork due to the state each year. The benefits of having an LLC are often worth the effort and expense, though. You have some control over the costs associated with creating an LLC. Certain expenses, such as filing fees, are unavoidable. Others are optional, but they often involve assistance in keeping your LLC compliant with state law. For example, a registered agent service can offer you the peace of mind that someone is keeping track of the essential filing deadlines for annual reports and other official documents, freeing you up to work on your business.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness. It also does not indicate any affiliation between Tailor Brands and any other brands, services or logos.
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