If you’re thinking about starting a business in Illinois, you’ll need to follow a specific process to get your business off the ground. Like other states, Illinois requires paperwork to establish a business, whether you’re forming a partnership, limited liability company (LLC), S corporation, or other structure.
For those planning to set up an LLC, we’ll explore how to set one up and how to select a registered agent. A registered agent, which must be listed on the LLC formation paperwork, is a person or company that receives official documents for the company.
Here are some frequently asked questions regarding finding and selecting the best registered agent in the Land of Lincoln.
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How is an LLC formed in Illinois?
1. Name the company
Your company needs a name. Before you choose one, there are a few things you need to know:
You’ll need to ensure that your LLC’s name is “recognizably different” from other entities on file with the Illinois Secretary of State. It’s a pretty simple process; just look in the name database on the Office of the Illinois Secretary of State. There you’ll find information on LLCs, corporations, not-for-profits, limited partnerships and limited liability partnerships.
Illinois requires the company name to contain one of the following as the last words: “LLC,” “L.L.C.,” or “limited liability company.” Illinois does not allow the abbreviations “Co.,” “Inc.,” “L.P.” or “Ltd.” Or the words “Corporation,” “Incorporated” or “Limited Partnership.”
2. Pick a registered agent
In Illinois, every LLC is required to a registered agent to accept the tax and legal paperwork on behalf of your LLC. An owner can be his or her own registered agent, which is common. However, another person, like a friend or neighbor, or a company, can also fill this role.
3. File the Articles of Organization with the State of Illinois
To file your LLC in Illinois, you’ll need to fill out LLC formation paperwork known as Articles of Organization with the Secretary of State Department of Business Services and pay $150 fee. In Illinois, online filings are expedited to be handled within 24 hours.
Be prepared to provide the following pieces of information:
- The name of the LLC
- The address of your principal place of business
- The date the articles become effective
- The name and address of your registered agent
- The reason(s) the LLC was organized
- The duration of the LLC (a specified length of time or perpetual)
- The names and addresses of either the initial manager(s) or member(s)
- The names, addresses, and signatures of the organizer(s)
4. Create a company operating agreement
Although not required in Illinois, an LLC operating agreement is recommended. The purpose of an operating agreement is to ensure that members and managers understand their rights and responsibilities. The operating agreement does not need to be filed with the Articles of Organization in Illinois.
A quick Google search will return templates that you can use to create your LLC’s operating agreement.
Although it can be tempting to skip the task of creating an operating agreement, it’s important to know that having one can help distinguish your LLC as a separate business entity. If you don’t have one and run into legal troubles, Illinois LLC law will govern how your LLC operates.
5. Obtain an EIN
For LLCs with more than one member, you’ll need to request an Employer Identification Number (EIN) from the IRS. Even a one-member LLC will need an EIN if you’ll have employees or you choose to have your LLC taxed as a corporation instead of a sole proprietorship. The person applying must have a valid Taxpayer Identification Number, such as a Social Security Number.
There is no filing fee to request an EIN and you’ll receive your number a soon as your online application is validated. It’s worth noting that you have to complete the application on the IRS website in one session. There’s no way to save the application partway through with the intention of returning later. Sessions expire after 15 minutes of inactivity.
6. File an annual report
All Illinois LLCs need to file an annual report with the Illinois Secretary of State. You can file it online. You’ll have to pay a $75 fee and there’s a $100 penalty if you file it more than 60 days after the due date.
Plan to file your annual report and pay your fee by the first day of your LLC’s anniversary month. So, if you registered your LLC on September 20, your report will be due by September 1.
What is an Illinois registered agent?
A registered agent is an individual who lives in Illinois or a business entity that’s authorized to do business in the state and willing to accept tax or other legal paperwork on behalf of your LLC.
Do I really need a registered agent in Illinois?
Yes. Illinois requires every LLC to have a registered agent. Just about every state requires an LLC to designate a registered agent.
Can I be my own registered agent in Illinois?
Although you can represent yourself, you’ll need to have a home or office in Illinois and be available during regular business hours to receive documents in person. It’s actually quite common for a business owner to serve as their own registered agent.
Who can be a registered agent in Illinois?
You must be at least 18 years old to be your own registered agent in Illinois. An Illinois street address is required and the agent must be able to accept legal paperwork delivered in person to their home or office.
A registered agent can be the owner, an employee, a friend, or a nearby business. A registered agent can also be a professional service. There are registered agent services that can be your LLC’s point of contact for a fee.
Why would a company choose to work with a registered agent service?
While serving as your own registered agent sounds like a good way to save a little cash, there are quite a few advantages to working with a registered agent service.
- Expertise. A registered agent is more likely to have expertise in compliance matters, including state and federal regulations and deadlines. For new entrepreneurs, this expertise could be invaluable.
- Regular hours. A registered agent can be available during normal business hours to receive your LLC’s important documents. Many start-ups can’t be tied to their home or office during all regular business hours due to travel, meetings, or errands.
- Privacy. Lawsuits and legal documents are often delivered in person by law enforcement. As a business owner, you may not want customers or employees to witness that private moment. For privacy, some business owners opt for a registered agent service.
- Time commitment. Many business owners can’t commit the time necessary to deal with accepting documents and filing annual reports. A service helps with all of this.
List of Illinois registered agent services
There are plenty of resources to help you find a registered agent in Illinois, but if you’re looking for a few choices for registered agent services in Illinois to help you get started, consider these:
- Incfile.com: Incfile.com can help entrepreneurs file their LLC formation paperwork and serve as the company’s registered agent. The online company offers a host of beneficial business services that includes filing reports and other necessary documents with the state. The first year is free. After that, it’s $119 a year.
- Northwest Registered Agent: For $125 a year, Northwest Registered Agent offers an online portal, real-time updates when mail is received, and pricing that remains the same each year. The company offers its services in several states and has years of experience in the field. Additional business services are also offered.
- Swyft Filings: Swyft Filings offers registered agent services that start at $149 a year. Users get an online dashboard, report and filing reminders, and secure document storage for this fee. In addition, the company has a buffet of other business services available when you have a need.
How much does a registered agent service cost in Illinois?
Registered agent service fees vary slightly in Illinois, but most range from $49 to $99.
How does an owner select a registered agent in Illinois?
A quick Google search will give you plenty of results for registered agents in Illinois. You’ll want to consider the cost, services offered, and reviews for each company.
Can a company change its registered agent?
Yes, you can change your registered agent. Just fill out a Statement of Change Form online and pay a $25 processing fee to the Illinois Secretary of State.
What’s a statutory agent?
Some states use the term “statutory agent” interchangeably with a registered agent. The terms “service of process agent” is also used. Service of process papers is filed when a company is sued.
What’s a commercial registered agent?
As you fill out the forms for your LLC, there may be a question asking if your appointed registered agent is commercial or non-commercial. If you’re using a registered agent service, choose commercial. If the person or company you’ve chosen to do the job isn’t getting paid to help you, choose non-commercial.