What Does It Cost to Form an LLC in Illinois?

Thinking about forming an LLC in Illinois? It’s a popular business structure because of its flexibility and liability protection. But before you start, you might be wondering what it’s going to cost you to set up. Below is a breakdown of what it costs to form and maintain an LLC in Illinois. For legal advice and technical assistance creating the legal business entity that meets your needs and satisfies legal requirements, contact MacDonald, Lee & Senechalle, Ltd., to visit with a team of skilled and experienced Chicago business entity formation lawyers.

What Is an LLC?

“LLC” stands for Limited Liability Company. It is a business entity that blends the best features of partnerships and corporations into a distinct form. One of the main advantages of the LLC is in the name itself – limited liability – meaning owners (known as members) are typically not personally responsible for the debts or liabilities of the company. LLCs also benefit from pass‑through taxation, which means profits and losses are reported on the members’ personal tax returns, avoiding the double taxation corporations often face. Additionally, LLCs allow for flexible management and ownership, offering more options than corporations and fewer restrictions than partnerships.

To form an LLC in Illinois, you must file Articles of Organization with the Illinois Secretary of State, as required under the Illinois Limited Liability Company Act (805 ILCS 180). You will need to provide information such as the business name, address, registered agent, purpose and business or mailing address(es) of the manager(s) and any member with the authority of manager. Once filed and accepted, the LLC becomes a legal entity. Although not required by law, most LLCs also create an Operating Agreement to outline governance, ownership interests, and procedures for decision‑making.

Compared to corporations, LLCs are less formal and require fewer administrative steps, such as shareholder meetings or extensive record‑keeping. Compared to partnerships, LLCs provide significantly greater liability protection. These advantages make LLCs an attractive option for many business owners.

Now let’s look at the costs associated with creating an LLC in Illinois.

State Filing Costs

The most direct cost in forming an LLC is the Articles of Organization filing fee, which is currently $150. This payment is made to the Illinois Secretary of State and applies whether you file online, by mail, or in person. Once your LLC is active, you must also submit an Annual Report to the Secretary of State every year. The filing fee for this report is $75, and it is due each year before the first day of your anniversary month. Missing the deadline by more than 60 days results in an additional $100 late fee.

If you wish to secure your LLC name before formally filing, Illinois allows you to reserve a business name for 90 days by filing an Application to Reserve a Name, which costs $25. Although optional, this step can be helpful if you are still finalizing other aspects of your business but want to prevent someone else from taking your chosen name.

Registered Agent and Operating Agreement

Illinois law requires every LLC to have a registered agent with a physical address in the state. A member of the LLC can serve as the agent at no additional cost. However, many business owners choose to appoint their attorney or accountant to serve as registered agent or hire a professional registered agent service for convenience and privacy. These services generally cost between $49 and $300 per year, depending on the provider.

While not filed with the state, an Operating Agreement is strongly recommended. This internal document governs how the LLC is managed, how profits and losses are allocated, and how disputes will be resolved. The cost for an Operating Agreement varies. Some business owners use free or inexpensive templates, while others hire attorneys to draft tailored agreements. Legal fees for this document typically range from a few hundred dollars to over $1,000 depending on the complexity of the business.

Additional Costs and Local Licenses

Beyond state fees, your LLC may face local and industry‑specific costs. For instance, depending on your city, village or county, you may need to obtain a business license. In Chicago, licenses issued by the Department of Business Affairs and Consumer Protection can cost several hundred dollars or more, while in smaller municipalities the cost may be much lower. Certain industries also require specialized permits, such as food service licenses, health department clearances, or professional certifications. These fees vary widely and can add hundreds of dollars annually to your costs.

Most LLCs will need an Employer Identification Number (EIN) from the IRS, which you can obtain free directly from the IRS official website. Unlike some states, Illinois does not require publication of new LLCs in a local newspaper, so there are no additional advertising costs.

First‑Year vs. Ongoing Expenses

When adding up the total cost to form an LLC, it is helpful to distinguish between one‑time and recurring expenses. In the first year, you can expect to pay the $150 Articles of Organization fee, the $75 annual report fee, and potentially a $25 name reservation fee if you choose to reserve your business name before filing. If you hire a registered agent service and a lawyer to draft your Operating Agreement, those costs may add $300 to $1,000 or more. Depending on your location and industry, you might also spend several hundred dollars on business licenses and permits.

In subsequent years, your primary recurring expenses will be the $75 annual report fee, the cost of a registered agent if you hire one, and any licensing renewals required by your municipality, industry or profession. If you fail to file your annual report on time, you could also incur a $100 late fee.

Contact MacDonald, Lee & Senechalle, Ltd., for Business Entity Formation in Chicago

At MacDonald, Lee & Senechalle, Ltd., we help Illinois business owners navigate every aspect of LLC formation, from filing with the state to drafting effective Operating Agreements and ensuring compliance with local requirements. If you are considering forming an LLC, our attorneys can guide you through the process and help set your business on a solid legal foundation. Contact us today at our offices in Hoffman Estates or Des Plaines to get started.