Business & Work

A limited liability company (LLC) is a type of business entity. It helps protect your personal assets from your business liabilities.

Forming an LLC requires fewer formal steps than a corporation. It may also be easier for you to maintain.

The first thing you will need to do to form an LLC is to complete your Articles of Organization. Then file them with the Secretary of State. Forms can be found on the Illinois Secretary of State website. The Illinois Secretary of State also has a detailed guide for organizing an Illinois LLC.

In order to complete your Articles of Organization, you will need:

• A name for your LLC,
• An address for your LLC's principal place of business,
• An effective date for the articles of incorporation (generally, this is the date of filing, but must be no more than 60 days after filing), 
• The name and address of the registered agent and registered office,
• The LLC's purpose, 
• The LLC's duration (which is continuous unless you say otherwise), and
• The names and business addresses of the initial managers or any member who has the authority of a manager. 

Each organizer of the LLC must sign the Articles of incorporation. An organizer can be a person 18 years or older or a business entity. 

Name

First, you will need to choose a name for your LLC. You may not choose a name for your LLC if another LLC or corporation in Illinois is already using that name. Your LLC name also must be distinguishable from out-of-state companies doing business in Illinois. You can check to see if the name you want for your LLC is available using the Secretary of State's name availability inquiry form. You can also see if your name is available by calling the Secretary of State's Department of Business Services at (217) 524-8008.

You can reserve an available name for 90 days by completing an Application to Reserve a Name form. There is a $25 fee to reserve a name.  

The name of your LLC must include the words "Limited Liability Company" or the abbreviation "L.L.C." or "LLC." LLCs are not corporations. You may not use "Corporation," "Corp.," "Co.," "Incorporated," "Inc.," "Ltd.," "Limited Partnership," or "L.P." in the name of your LLC.

The name must be written with letters from the English alphabet, numbers, or symbols that the Department of Business Services can reproduce. 

Principal place of business

Your principal place of business where your LLC will operate. This may or may not be in Illinois. 

It may be an office or your home. But be aware that your Articles of Organization are public record. This includes your principal place of business.

Your principal place of business may not be a P.O. Box.

You must keep certain records at the principal place of business, including: 

•  A list of the LLC members' names and addresses, 
• A copy of the Articles of Organization,  
• Copies of local, state, and federal tax returns from the past 3 years, and
• Copies of any written operating agreements or amendments from the past 3 years. 

Upon request, these records must be made available during normal business hours to any member, legal representative of a deceased member, or member under legal disability.

Registered agent and registered office

The registered agent is the person (or company) who will receive legal notices on behalf of the LLC. 

The registered agent does not have to be you. However, the registered agent must be someone who lives in Illinois or an entity allowed to do business in Illinois. The address does not have to be your home address. It may not be a P.O. Box. It must be in Illinois.

Your registered agent's name and information are public record.  

Members and managers

LLCs may be managed by their members (owners), a manager, or a group of managers. You must list the names and business addresses of all of the people who manage the LLC in the Articles of Organization. 

Formation date and duration

You can decide whether you want the LLC to be formed on the date it is approved by the Secretary of State or at a later date, but no more than 60 days after filing. 

Unless you say otherwise in the Articles of Organization, your LLC will exist indefinitely. 

Purpose

The purpose states the business objectives of the LLC. Unless otherwise required, this can be a general statement of purpose. The default general purpose of an LLC in Illinois is the "transaction of any or all lawful business for which limited liability companies may be organized under the Illinois Limited Liability Company Act." See 805 ILCS 180/5-5. 

Specific rules for some businesses

Some professions are regulated by the Illinois Department of Professional and Financial Regulation (IDFPR). They may require that your Articles of Organization be more specific as to the purpose of your LLC's business.

Your LLC will be a separate entity from yourself. It will report its tax information under a separate tax number. This tax number is called your Federal Employer Identification Number, or "EIN."  You can get your LLC an EIN online from the IRS.

If your LLC sells goods or services to customers in Illinois, your LLC will also need to register for an Illinois Business Tax number. You can register for an Illinois Business Tax number online through the Illinois Department of Revenue. 

Every LLC should have an operating agreement, even if there is only one member.  An operating agreement is a document signed by the members that details how your LLC will operate, including management structure, owner rights, distribution requirements, and transfer restrictions.  It should also explain how the LLC may be dissolved, or sold. This will help make sure your personal assets are protected.

The operating agreement is not filed publicly. The operating agreement must be signed by all founding members and all future equity owners. 

Note: Operating agreements are complex. You may need professional legal help to prepare an appropriate agreement.