1. Illinois LLC Overview

Illinois is a major business state anchored by Chicago, the third-largest US city. Key facts for Illinois LLC owners:

  • $150 formation fee — mid-range compared to other states
  • $75/year annual report — relatively low ongoing cost
  • Flat 4.95% income tax — consistent and predictable
  • No franchise tax — unlike California or Delaware
  • Strong Chicago business infrastructure — access to capital, talent, and markets

2. Illinois LLC Requirements

  • Name must include "Limited Liability Company," "LLC," or "L.L.C."
  • Name must be distinguishable from existing IL entities (check at ilsos.gov)
  • Appoint a registered agent with an Illinois physical address
  • File Articles of Organization (Form LLC-5.5) — $150
  • File annual report each year before the anniversary month — $75
  • Maintain a registered agent at all times

3. Illinois LLC Costs and Fees (2026)

Cost Item Amount Notes
Articles of Organization$150One-time state filing fee
Annual Report$75/yearDue before anniversary month
Late Annual Report Penalty$100Applied if filed after deadline
Registered Agent$50–$150/yearRequired IL physical address
EINFreeApply at IRS.gov
Operating Agreement$0–$1,000Not required by IL law

4. How to Start an Illinois LLC (Step by Step)

  1. 1 Choose your LLC name (must include "Limited Liability Company," "LLC," or "L.L.C.")
  2. 2 Appoint a registered agent with an Illinois street address
  3. 3 File Articles of Organization (Form LLC-5.5) with the IL Secretary of State ($150)
  4. 4 Obtain an EIN from the IRS (free at IRS.gov)
  5. 5 Draft an Operating Agreement (not required by law but strongly recommended)
  6. 6 Register with the Illinois Department of Revenue if collecting sales tax
  7. 7 File annual report each year before the anniversary month ($75)
  8. 8 Open a business bank account

5. Illinois Annual Report

Illinois LLCs must file an annual report with the Secretary of State each year. The report:

  • Costs $75 and must be filed before the first day of the LLC's anniversary month
  • Can be filed online at ilsos.gov
  • Updates the state on your registered agent, principal address, and member information
  • Incurs a $100 late penalty if missed
Anniversary Month Deadline

Illinois's annual report is due before the first day of the anniversary month — not at the end of the month. For example, if you formed your LLC on March 15, your report is due before March 1 of each subsequent year. This is earlier than most states.

6. Illinois LLC Taxes (2026)

  • Illinois personal income tax — 4.95% flat rate on LLC profits (pass-through)
  • Federal income tax — pass-through to personal return
  • Self-employment tax — 15.3% on net earnings
  • Illinois sales tax — 6.25% state rate + local additions (up to 10.25% combined in Chicago)
  • Chicago business taxes — additional city taxes may apply if you operate in Chicago
  • No franchise tax — Illinois does not impose a franchise tax on LLCs

7. Best For / Not Best For

Best For

  • Entrepreneurs physically living and operating in Illinois
  • Businesses targeting the Chicago metro area and Midwest market
  • Companies with Illinois employees, offices, or customers
  • Businesses that want Illinois's flat 4.95% income tax (vs. CA's 13.3%)

Not Best For

  • Out-of-state owners with no Illinois nexus (home-state filing is better)
  • Privacy-focused founders (IL is a public record state)
  • Cost-sensitive founders: $75/year ongoing + $100 late penalty
  • Founders who want no state income tax (use Wyoming, Texas, or Florida)