Creating a Limited Liability Company (LLC) in Illinois involves several important steps to ensure compliance with state laws and regulations. Here’s a comprehensive step-by-step guide to assist you in establishing your LLC in Illinois:
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STEP 1: Choose a Name for Your LLC
Your Illinois LLC must have a name that is unique and not too similar to any other registered Illinois business entity.
The name must end with “Limited Liability Company,” “L.L.C.,” or “LLC.”
Use the Illinois Secretary of State’s online database to check the availability of your desired LLC name.
If desired, you can reserve your LLC name for up to 90 days by filing a “Name Reservation” application with the Illinois Secretary of State and paying the applicable fee.
Time it Takes to name an LLC
Researching and deciding on a name: 1-2 hours
If opting for a name reservation: The act of filing can take about 10-15 minutes.
If opting for a name reservation: Filing can take minutes, but approval might take a few days to a week.
STEP 2: Appoint a Registered Agent
Illinois requires you to appoint a registered agent for your LLC, who will be responsible for receiving legal documents on behalf of your business.
The agent can be an individual resident of Illinois or a business entity authorized to conduct business in Illinois. They must have a physical street address in the state (not a P.O. Box).
Time it Takes to be a Registered Agent
Registered Agents MUST BE at the Business Address everyday during business hours. This is why Home Addresses Are Not Accepted.
If you already have someone in mind (like an attorney or a service), this can be quick. If you need to find and appoint a registered agent: 1-3 hours.
Why use Inc Authority vs Being your own Registered Agent?
Benefits of having Inc Authority serve as your Registered Agent include:
· Privacy: Keep your home address private
· Efficiency: Easily receive and promptly process state and legal documents
· Hassle-free: Reduction of junk and solicitation mail
· Legal Compliance: Avoid fines, penalties, and possible dissolution
· Convenience: Serves as your public & legal business address
Inc Authority offer you a FREE year of Registered Agent Service with the purchase of your LLC.
STEP 3: File Articles of Organization
To officially create your LLC, you must file the Articles of Organization with the Illinois Secretary of State. This can be done online, by mail, or in-person.
The form requires various details about your LLC, including its name, principal place of business, the name and address of your registered agent, and whether it will be member-managed or manager-managed.
There is a filing fee associated with the Articles of Organization, which varies based on the type of submission (standard or expedited).
Time it takes to write the Articles of Organization
Preparing the document: 1-2 hours
Filing online: 30 minutes to 1 hour.
Waiting for confirmation/approval: This can range widely, but typically, online filings can be processed in a few days to a couple of weeks.
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STEP 4: Create an Operating Agreement
While not legally required in Illinois, it’s strongly recommended that your LLC has an Operating Agreement in place.
The agreement should outline the operating procedures, financial structure, and ownership of the LLC.
Keep this document on file as it’s for internal use and is not submitted to the state.
Time it takes to write an Operating Agreement
If using a template and making minimal changes: 1-3 hours
If drafting from scratch or having extensive negotiations among members: Several days to weeks.
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STEP 5: Obtain an Employer Identification Number (EIN)
Apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for tax purposes.
You can apply for an EIN online at no cost through the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
The EIN will be used for tax filings, opening bank accounts, and hiring employees.
Time it takes to get an EIN / Tax ID
Filling out the online form and receiving the EIN: Approximately 0.5 to 1 hour (the online process is relatively quick if there are no complications).
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SO HOW MUCH TIME WILL IT TAKE TO FORM AN LLC MYSELF? DO IT MYSELF (DIY) an LLC?
Total Time Investment (Minimum): 5 hours (if you exclude the higher range estimates and name reservation)
Total Time Investment (Maximum): 11.5 hours (if you include the higher range estimates and name reservation)
This gives a ballpark range of 5 to 11.5 working hours for an individual, excluding all waiting times. It’s worth noting that these times can vary based on the person’s familiarity with the processes and any specific details or challenges related to the business being set up.