Start Your LLC in Illinois with Inc Authority for Free
Want to start an LLC in Illinois? We’ve partnered with Inc Authority—a leading LLC formation service provider—to help you get started for free. Get your LLC registration services from the experts and save money while at it.
Free 1-Year Registered Agent Services
IncAuthority offers free business formation, including filing your paperwork and storing your documents safely.
You’ll get excellent, round-the-clock customer support from a highly experienced team of representatives.
Get free one-year registered agent services as well as free business name search and tax planning consultation.
Things to Know Before Starting an LLC in Illinois
Being one of the top 10 states for business growth, Illinois is among the best places to start a limited liability company in the United States.
Here’s what you need to keep in mind before you form an LLC in Illinois.
- Make sure you know which type of LLC you want to start before filing your Articles of Organization. For instance, it costs more ($400 compared to the usual $150) to form a series LLC than a normal domestic LLC.
- You’ll need to pay personal property replacement tax every year if you form an Illinois LLC. The rate for regular LLCs is 1.5% of the total income. If you choose to have your LLC taxed as a corporation, the rate will be 2.5%.
- It costs $75 to file your Illinois LLC annual reports every year. If you fail to file them within 60 days after the due date, you’ll attract a $100 penalty on top of the usual fees. If you still don’t file after, your business will be dissolved.
- It costs $30 to register a Doing Business As (assumed business name) with the Illinois Secretary of State. Your DBA name will be active for five years from the time of registration and it will cost you $150 to renew this application.
This next section explores the steps involved in creating an LLC in Illinois.
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How to Form an LLC in Illinois
An LLC blends the best features of Corporations, Sole Proprietorships, and Partnerships, into a simple, flexible structure suitable for small to medium-sized businesses. You get limited liability for members along with pass-through taxation benefits.
Below is a step-by-step guide on how to form an LLC in Illinois.
Conduct an Illinois LLC Name Search
First, you want to make sure that the business name you have in mind is unique. You’ll need a name that’s easily distinguishable from any other LLC or corporation name in the state. Also, ensure it follows Illinois naming guidelines.
Inc Authority offers to conduct your business name search with your state for free as part of their free LLC business registration package. To be on the safe side, have at least two potential names shortlisted before beginning this search.
Reserve Your LLC Business Name
If you’re not ready to file your Articles of Organization with your official name yet, you can reserve it. In Illinois, you can reserve your LLC name for up to 90 days. You’ll have to apply with the state to reserve a name by filling out Form LLC-1.15.
You need to pay $25 for a name reservation. You can also use the name of an LLC that was dissolved as long as it’s been three years since its dissolution. If you decide to register your articles of organization right away, you won’t need this step.
Select an Illinois Registered Agent
All LLCs in Illinois are required to have a registered agent to take care of all their legal correspondence. Your registered agent can either be a business entity authorized to operate in Illinois, or an individual located in the state.
They must have a physical address in Illinois. You’ll need to ensure that the name and address of your LLC’s registered agent are up to date in Illinois state records at all times. Inc Authority offers free registered agent services for a year.
Select Your LLC Type
Before forming your LLC in Illinois, you’ll need to decide on which form of LLC suits your business best. In Illinois for instance, you’ll have the option to create a Series LLC, unlike most other states. You can also create a foreign or a professional LLC.
Choosing an LLC type helps you determine the costs you’ll incur and the paperwork you’ll need to file. Series LLCs cost $400 to register, while professional LLCs cost an extra $50. Also, different LLC types require different licenses and permits.
File Your Articles of Organization
To create an LLC in Illinois, you’ll need to file an Articles of Organization. You do this by filling out Form LLC-5.5 with the Illinois Secretary of State. This costs $150, and you can also request expedited filing for an extra $100 service fee.
By default, your LLC becomes legal when the Department of Business Services files your Articles of Organization. However, you can designate a later date, within 60 days after filing your Articles of Organization, to be your LLC’s official “birthday”.
Create an Operating Agreement
Having an LLC operating agreement is not a legal requirement by the state of Illinois. However, it’s crucial that your limited liability company has one for internal use. LLC operating agreements differ in length and content, and vary by business.
An LLC operating agreement is a document that outlines the responsibilities, liabilities, powers, and obligations of LLC owners. Some items you can include are member rights, responsibilities, dissolution rules, percentage of ownership, etc.
Get a Federal Employer Identification Number (EIN)
The next step is getting your EIN, also known as a federal Tax Identification Number. An EIN is similar to a social security number but for your business. This 9-digit number is how the IRS identifies your business and determines your tax obligations.
Unless they choose to file taxes as a corporation, single-member LLCs don’t need to apply for an EIN as the IRS considers them a disregarded entity. This means that company income is treated as member income for federal tax purposes.
Open a Business Bank Account
Every LLC needs to open a separate business bank account. This helps distinguish between personal income and business revenue and profits. It also makes it easy to track your business spending, and manage accounting and bookeeping.
You’ll be able to track your business’s cash flows, investments, expenses, tax deductions, and more. Also, you’ll be building a relationship with your bank account, making you eligible for credits and or loan funding in the long run.
Get Business Licenses and Permits
Filing an Articles of Organization permits your company to legally operate in the state of Illinois, but is not the only legal requirement that you need to meet. When forming an Illinois LLC, you’ll need other federal and satte business licenses and permits.
Your county and city governments may require them and may impose restrictions regarding advertising, parking, and many more. Some depend on the industry your business is in. You’ll need to familiarize yourself with these regulations as well.
Stay Compliant
It’s important to stay compliant with state and federal requirements after formation. One way to do so is by filing your taxes on time to remain in the IRS’s good books. Another is by filing annual reports with the state to avoid penalties or dissolution.
The due date for filing annual reports is the day before the first day of your company’s anniversary month. The state mails a printed version of your annual report to your registered agent roughly six months before this due date.
Why Outsource LLC Formation Instead of Doing it Yourself?
LLC formation can get tedious, not only because of the paperwork involved but also because of all the moving parts. You’ll need a name, business licenses and permits, an EIN, and more, all of which are provided by different government bodies.
Let’s look at that in detail.
Saves Time
Since you’ll be outsourcing to experts, you’ll save the time you’d have spent scouring through the internet for information. All you’ll need to do is fill out an online form and provide any necessary documents and the rest will be taken care of.
No Errors
Business formation services have experience filing LLC forms. They know the legal requirements and regulations of each state. Letting them handle your formation will minimize your chances of making a mistake or getting your application rejected.
Perpetual Support
Business formation service providers like Inc Authority do more than just file your papers. They offer ongoing services beyond formation that you can leverage to grow your business. These include business compliance, accounting services, and more.
Benefits of Forming an LLC in Illinois
Why should you start a business in Illinois, or expand your foreign business into this state? Here are a few reasons why.
Flexible Tax Treatment
The state of Illinois has no restrictive provisions for how LLCs will be taxed. The businesses get to choose how they recognize their federal taxes. They can choose to be taxed as regular LLCs, single-member LLCs, or C-corporations.
If they choose to be taxed as regular LLCs, they’ll enjoy pass-through taxation benefits. Here, members pay federal income and self-employment taxes on their profit shares. Single-member LLCs are treated like sole proprietorships by the IRS.
Registration Costs
Illinois charges $150 to file LLC Articles of Organization and an annual reporting fee of $75 every year. This is less than the cost of incorporation which costs the same but you’d have to pay an extra $25 franchise fee for forming a Corporation.
The filing fees for a limited liability partnership in Illinois are much higher than for an LLC. Each partner pays a $100 fee with a $5,000 cap. The filing fees for Series LLCs are also favorable. At $400, you can have several LLCs operate under one LLC.
Limited Liability
LLC owners are not personally liable for their business’s debts and liabilities. This is similar to what corporations enjoy, but LLCs have it better since they require fewer formalities, compared to C-Corps, during and after formation, and are cheaper.
Limited liability partnerships also enjoy this protection but unlike LLCs, they have more restrictions on their tax options. LLCs can still have liability protection even with one member, unlike sole proprietorships, where owners are liable for business debts.
Flexible Membership
An LLC has no restrictions on the number of members, meaning that you can have as many members as you can, or it can be just you. This lets you enjoy some of the benefits of sole proprietorships like having complete control over your business.
This is unlike any other limited liability business entity. For instance, S-corps can have max 100 shareholders. With C-corporations, you can have many members, but your business would be subject to double taxation and more regulations.
Fewer formalities
Corporations have multiple rules of operation. The management structure includes shareholders, a board of directors, and managers. They also need to hold annual shareholder meetings, organize board meetings, and record meeting minutes.
LLCs in Illinois have no such restrictions. They can be member-managed or the members can appoint managers to run the business on their behalf. LLCs have no provision for mandatory meetings and do not need to keep minutes either.
Lower Personal Property Replacement Tax
Illinois does not charge income tax from their LLCs and each chooses how to recognize their federal taxes. However, there’s a separate business tax on LLCs called personal property replacement tax. Illinois charges 1.5% on total income.
This rate is much lower than the rate of personal property replacement tax that corporations are required to pay, which is 2.5%. It’s important to note that single-member LLCs are exempt from this taxation requirement.
Inc Authority LLC Formation In Illinois: Free Services
Inc Authority was created to help startups get their businesses up and running and everything else that supports business growth.
Here are the services this online business formation tool offers.
Business Name Search
Before filing your LLC formation paperwork in the state of Illinois, you need to ensure your business name is available for use within the state. Inc Authority offers a free name availability search as part of its free business registration package.
Once you ascertain that the name you had in mind is not taken up by any other LLC or corporation, you’re free to use it. It’s important to note that a name search is a simple search that you can conduct on Inc Authority’s website for free.
Online Client Portal
If you’re an Inc Authority customer, the platform provides an online client portal that users can access at any time. This makes it easy to keep track of your activity with them. All you need to do is log in to your online portal and manage your account.
Inc Authority also provides digital storage for copies of your LLC formation documents on your client’s portal. You’ll have access to documents like your Illinois Articles of Organization as well as your annual reports at any time.
Registered Agent Services
Inc Authority provides free registered agent services for a year as part of its free LLC formation package. This is one of its best perks. After this period, however, you’ll need to pay some fees to continue with their registered agent service.
As your registered agent service provider, Inc Authority will ensure that you receive all important notices and documents from the state authorities. They’ll also protect the privacy of your LLC business as well as that of your LLC members.
INC CARE Support
INC CARE Support is part of Inc Authority’s promise that all your queries and doubts will get a quick response, whether you pay for their services or not. They provide 24/7 customer support via phone and email, for all your queries and complaints.
Looking for quicker responses from the support team? In case you find email responses too slow, Inc authority has a US-based live support team. However, this service is only available from 6 am-5 pm Pacific Time Monday to Friday.
Tax Planning Consultation
Businesses don’t often know where to begin with their taxes when they’re just getting started. Having to file your taxes for the first time can be daunting for entrepreneurs. Luckily, Inc Authority offers tax planning consulation services for free.
They have a team of experts that will advise you on how to best plan and pay your taxes. For instance, you’ll learn to apply for tax extensions and buy more time before filing taxes, know how to save on your business income, and much more.
Business Credit Analysis
As a new business owner, you’ll need to learn the best practices to put in place so you can set yourself up for better credit scores. Inc Authority offers credit analysis services from a business credit expert for free tohelp you with that.
They’ll assess your credit needs and provide solutions. For an even better credit analysis, Inc Authority provides an extensive credit-building solution. It’s a paid service worth trying out if you’re looking to improve your credit scores.
Funding Analysis
Just like with credit analysis, Inc Authority provides funding analysis services for free. New businesses that haven’t built up much financial credibility yet have trouble landing lenders. And this works against them as they often need capital boosts.
A funding expert will analyze your current financing needs and suggest solutions. You can also try the paid business funding solution. This plan helps eligible entrepreneurs land funding of up to $100,000 as will be discussed later.
S-Election Form
Some LLCs choose to have their businesses treated as an S-corporation for tax purposes. For this, they’d have to fill out an S-election form (Form 2553). Inc Authority prepares and files this form with the IRS on your business’s behalf.
Filing for S-corp status comes with some tax benefits. You’ll be able to save on Medicare and Social Security tax. Unlike LLCs, S-corps can pass through part of their income as owner salaries and dividends, so no corporate taxes.
Inc Authority LLC Formation In Illinois: Paid Services
In the previous section, you learned all about the features offered in the free plan. Now, let’s check out all the paid services and plans offered by Inc Authority.
Here’s a breakdown of Inc Authority’s premium plans and add-on services.
Starter
The premium packages include the Starter business bundle and the Fasttrack business bundle. Some services included in this package are:
- Operating agreement: Inc Authority will help you build a customizable operating agreement for your business. You’ll find items like dissolution rules, profit-sharing ratios, conflict resolution, and more.
- EIN/Tax ID number: Submitting an EIN application on the IRS page can be tedious. At a fee, Inc Authority takes this off your plate. You’ll need your EIN when submitting your payroll, or applying for a business bank account.
- Annual compliance notifications: Most new business owners often forget to stay compliant with state and federal regulations. Inc Authority keeps you up to date by making sure you don’t miss any important deadlines.
- Web domain and email addresses: If you’re planning to create a website for your business, this plan provides you with a web domain name matching your business name and five official email addresses for your business.
- Professional tax consultation: With a paid plan you’ll get in-depth tax analysis from Inc authority experts. Unlike the free tax analysis mentioned earlier, this offers more comprehensive ways to save income.
- Corporate forms package: When starting an LLC in Illinois, you’ll need to fill out different legal forms. You’ll also need various types of documents for your business operations. Inc authority’s corporate forms package helps with that.
Price: Custom
Fasttrack
Here are the services offered as part of the Fasttrack package:
- Expedited filing: This premium package comes with expedited filing. If you’re in a hurry and need to file your articles of organization by a specific launch date, for example, this is the plan for you. Inc authority will complete and submit your application within the same day.
- Personalized business advice: This is another crucial perk of getting the Fasttrack plan. Inc Authority experts from different industries and areas of expertise will give you business advice and solutions that are specific to your business to help you scale and grow your business.
- Inc success advisor: With this plan, you’ll get an expert to take you through the entire business formation process. They’ll explain the steps to you in detail, offer advice on how to set your business up for success, and help get your business off the ground.
- Private banking specialist: As a new LLC, it’s crucial to open a separate business banking account for various reasons. With the private banking specialist option, you get expert advice on how to handle your business finances, which accounts to open, and much more.
Price: Custom
Additional Services
Besides formation and related services, Inc Authority offers other services for an additional fee. Here’s a quick overview of each package:
- Business Plan Creation: You’ll get a dedicated business planning advisor to help you map out your business’s future. They’ll help you with research, financial plan, mission statement, marketing analyses, and more.
- Website and Marketing: This is an Inc Authority paid package meant to help you get your business website up and running. You’ll get a private consultation with a website designer and a dedicated marketing specialist.
- Business funding: Inc Authority runs a business funding program called BizFunding Express. This is meant to help new businesses get easy access to working capital and short-term funding at low-interest rates.
- Federal trademark: Inc Authority also provides federal trademark registration. This includes the US trademark availability and expedited online filing with the United States Patent and Trademarks Office (USPTO).
- Business credit services: Inc Authority runs BizCredit Express. This is meant to build your business credit to maximize your score. You’ll get a business credit advisor who will take you through the process.
- Revocable living trust: This may not be business-related but you may want a revocable living trust for your assets. Without one, a deceased’s assets go through probate to settle claims and distribute assets.
Price: Contact sales
Why Inc Authority is a Great Choice for Your Formation Needs
Here are some reasons why Inc Authority is a better choice compared to other business formation service providers in the market.
Free Services
The most significant perk of using Inc Authority is its free LLC formation service. You get more free services compared to most tools out there. These include business name checks, federal tax consultations, digital document storage, and more.
For LLC formation, you’ll only need to pay the Illinois state fees of $150 and nothing for the services that the Inc Authority provides. Along with free LLC formation, you’ll also get free registered agent services for a year and a free tax consultation.
Customer Support
Through their INC CARE feature, Inc Authority offers round-the-clock customer support, whether you’re on a paid or free plan. This includes the option to send emails or make phone calls. There’s also a US-based live chat option.
Live chat, however, is only available from Monday to Friday from 6 am to 5 pm Pacific Time. Besides, most online customer reviews point to how responsive and efficient Inc Authority’s customer support team is in helping their clients.
Paid Services Priced Separately
Another advantage of using Inc Authority is the way all its services are priced. If you want the free registration package but want Inc Authority to help you get an EIN, for example, you can get that for $49 without having to pay for the Starter plan.
While each paid plan is a packaged deal, you can still get specific services separately. Services like trademark filing, website marketing, business credit building, and business plan formation are available as an add-on as well.
Extensive Experience
With over 30 years of experience and over 250k business formations under its belt, you can trust that the Inc Authority team knows what they’re doing. Maintaining an excellent track record for decades is one factor that sets Inc Authority apart.
It’s an indication of great customer service, extensive knowledge, and absolute commitment to its customers. As a business, you want to leave your LLC formation process as well as other business needs to a brand with such qualities.
Great Customer Reviews
Inc Authority has numerous positive customer reviews online. On Trustpilot, for instance, Inc Authority has a rating of 4.9 stars out of 5—a rating based on over 22,000 reviews. These reviews are better than that of most competitors.
Most customers on these reviews point out how Inc Authority’s customer representatives are supportive and reliable. They also insist on how easy and fast the team makes the business formation process from start to end.
Helpful Upgrades
Besides all the essential services Inc Authority provides, it has useful upgrades that can do more for your business. For instance, with the paid packages, you get crucial services like EIN application and expedited filing to help with registration.
That’s not all. There are more packages that you can pay for separately that will help scale your business exponentially. Such services include business credit building, business funding consults, website building and marketing, and more.
FAQ
Forming a regular LLC in Illinois will cost you $150, which is the fee for filing your Articles of Organization with the Secretary of State.
However, if you’re forming a series LLC it will cost $400, and if you’re forming a professional Illinois limited liability company, it will cost you an extra $50 for a professional purpose clause.
After your Articles of Organization are submitted to the Illinois Secretary of State, it’ll take 3 to 4 weeks to be approved if the filling was done by mail. For online filings, your approval may take between 5 to 10 business days.
The state of Illinois has no specific income tax requirements for LLCs, so there are no Illinois business taxes. The way you file your taxes will depend on how you’ve chosen your business to be treated by the Internal Revenue Service.
For instance, you can choose to be treated as a disregarded entity if you register as a one-member limited liability company. Here, the IRS will treat your LLC like it would a Sole Proprietorship.
Besides income tax, Illinois LLCs pay personal property replacement tax which is 1.5% of their total annual income.
Here’s the process for starting an LLC in Illinois:
- Conduct an Illinois LLC name search: Make sure the business name you’ve chosen isn’t in use by any other LLC or corporation in the state.
- Reserve your LLC business name: Reserve your LLC name with the state of Illinois for up to 90 days if you’re not ready to use it just yet.
- Select an Illinois registered agent: Select an Illinois registered agent to take care of all your legal correspondence from the IRS and the state.
- Select your LLC type: In Illinois, you’ll get the option to create a domestic LLC, a series LLC, a professional limited liability company, etc.
- File your Illinois LLC Articles of Organization: To create an LLC in Illinois, you’ll need to file the Articles of Organization by filling out Form LLC-5.5.
- Create an Operating Agreement: This document is crucial for LLCs as it outlines internal rules to help members run the business smoothly.
- Get a Federal Employer Identification Number (EIN): This is a 9-digit number that helps the IRS identify your business and determine your tax obligations.
- Open a Business Bank Account: A separate business bank account helps distinguish between personal and business finances.
- Get Business Licenses and Permits: You’ll need other business licenses and permits from your county and city governments.
- Stay Compliant: Stay compliant with state and federal requirements by reporting taxes and filing annual reports on time.
You can be your own registered agent in Illinois, as long as you have a physical address there. However, given the legal requirements for registered agents, it’s advisable to have another individual or business be your registered agent.
Get Your Illinois LLC Up and Running With Inc Authority
Worried about all the state regulations and requirements of forming an LLC in Illinois? Looking for an easier option?
Leave all the paperwork to the experts and focus on building your business.
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