Illinois LLC Formation Guide 2026

Illinois is the fifth-largest state by population, home to Chicago's massive economy, and a strong choice for business formation. With a $150 filing fee and straightforward compliance requirements, here is what you need to know about forming an LLC in Illinois.

How to Form an Illinois LLC

1. Choose your name. Must include "LLC," "L.L.C.," or "Limited Liability Company." Check availability at the Illinois Secretary of State website.
2. File Articles of Organization. File online or by mail with the Illinois Secretary of State. Filing fee: $150.
3. Appoint a registered agent. Must have an Illinois street address.
4. Get your EIN. Free at IRS.gov.
5. Create an operating agreement. Illinois law actually references operating agreements in its LLC act, making it particularly important to have one here.
6. File your annual report. Due before the first day of your LLC's anniversary month. Fee: $75.

Illinois LLC Taxes

• State income tax: Flat rate of 4.95% on all income.
• Replacement tax: LLCs with two or more members that are taxed as partnerships owe a 1.5% replacement tax on net income.
• No franchise tax (Illinois eliminated its franchise tax in 2024).

Single-member LLCs pass through income to the owner's personal return. Multi-member LLCs file a partnership return and distribute K-1s to members.

Annual Compliance

• Annual report: $75, due before your LLC's anniversary month.
• State tax returns: Due April 15 for calendar-year LLCs.
• City licenses: Chicago requires a Business License for most business types.

Cost Summary

Form Your Illinois LLC

Illinois offers a solid business environment with straightforward formation requirements. The elimination of the franchise tax in 2024 made it even more attractive. Start your Illinois LLC with Sedes for $29 plus the $150 state fee.