Chicago, IL

You can’t wait to start your business. If only you could skip all the “Legal stuff”.


How to start your LLC in Chicago, IL

STEP-BY-STEP GUIDE by Lee Payton Updated: January 3, 2023
Name your LLC
Appoint a Registered Agent
5 - 10 days
File Articles of Organization
Draft an Operating Agreement
Get an EIN (Employer Identification Number)

Why form an LLC in Chicago, IL?

The third-largest city in the U.S., Chicago, is the ideal city for people who want to live in a world-class city with Midwest values. The City offers more than its fair share of culture, Michelin-starred restaurants, world-class business districts, and neighborhoods that are its true character.

Chicago is an international hub for finance, culture, commerce, industry, education, technology, telecommunications, and transportation. O’Hare International Airport is ranked among the world’s top six airports, and Chicago has the largest number of federal highways. The Chicago area has one of the highest gross domestic products in the world and is an excellent place to start your new business.

We’ll cover: 

  • How to name your LLC and file the proper documents
  • How to stay compliant
  • Local Chicago business resources available to you

LLC Formation Process in a Nutshell

1. Name your LLC

How should you name your LLC? You might have your heart set on a name, but there are important things to consider first. You’ll want to ensure that it follows state rules and isn’t too close to an existing business’s name.

The rules for naming your company in Chicago, IL are fairly simple according to Section 1-10 of the Illinois Business Organizations Code.

Your Illinois LLC name must end with one of the following:

  • Limited liability company
  • L.L.C.
  • LLC.

If you are forming the LLC for a low-profit charitable or educational purpose under section 1-26, you must have the term “L3C” in your LLC’s name. And if your LLC works with trusts, the law requires that you have the word “trust” in the name.

Current Illinois regulations do not let you use only the words “limited” or “company” by themselves to identify an LLC.

Your LLC name must be unique and easily distinguishable from other Illinois businesses. You also want to avoid confusing the public with a name similar to that of another business. The Secretary of State’s office will still have the final say over whether the name is okay.

Let’s say you have your heart set on the name “Chicago Air Conditioner Repair, LLC,” but after a search, you find another Illinois corporation named “Chicago Air Conditioner Repair, Inc.” The names are too similar even though “Inc.” is a different kind of company.

If you make a simple change to your name such as “Chicago Air Conditioner Service, LLC,” you should be okay.

Whatever name you choose shouldn’t be misleading to the public. This includes using another company’s name or choosing a name that would cause people to confuse it with government entities.

Your company’s name cannot contain the following words unless it has permission to do so under the Illinois Corporate Fiduciary Act:

  • Trust
  • Trustee
  • Fiduciary

If your business name implies that you carry any form of professional license, at least one of your members must have that valid license issued by an appropriate government agency.

For example, if your business is named “Chicago Private Investigations, LLC,” you’ll need to hold a valid Illinois Private Investigator License.

Before filing your paperwork, check to see if your name is available in Illinois. You can perform a search for the name on the Illinois Corporate & Limited Liability Company Name Search page.

After naming your company, it’s also legal in Illinois to apply to do business under an assumed name or “DBA,” but more on that later in this article.


2. Appoint a Registered Agent

What is a registered agent? A registered agent is an individual or company that receives service of process, legal documents, and official notices on your business’s behalf.

Service of process is a legal term for business letters or legal papers. Your agent is the gatekeeper between you, the state, and the public. If a lawsuit is filed against your company, your registered agent will receive the relevant documents.

Illinois state law requires that you appoint a registered agent and provide their details at the time of filing your articles of organization. Illinois’s rules for naming and changing registered agents are in Section 1-35 of the Limited Liability Company Act.

Registered agents must meet the following requirements:

  • Be at least 18 years old
  • Have a physical address in the state of registration
  • Be available to receive mail and sign official documents during normal business hours, Monday to Friday, 9 a.m. to 5 p.m.

A registered agent must also respond quickly in the event of a lawsuit so that your business avoids missed deadlines, fines, or penalties for non-compliance.

Some business owners choose to designate themselves as registered agents because:

  • It’s cheap: You’re not paying someone for something you can do yourself.
  • It’s simple: The only address and contact information you have to keep current is your own.
  • It’s reliable: You will receive all important documents personally.

However, there are several downsides to this:

  • No privacy: You’ll have to make your address available to the public on the Secretary of State’s websites.
  • Junk mail/spam: Public-facing addresses are swarmed by junk mail in addition to a small amount of legitimate mail.
  • No breaks: Registered agents must be open for service during all business hours. They don’t get time off.
  • Business interruptions: If your agency address is the same as your business address, your business and clients may be interrupted by your duties as an agent. If you are getting served with a lawsuit in front of customers, that could be embarrassing or even hurt your business.
  • It’s your fault if you miss something: You always have to make sure your agency address is correct and up to date. If you make a mistake or miss something, that’s on you.

For these reasons, most experienced business owners hire companies to act as their registered agents. These services cost between $100 and $150 per year. If you choose to use a law firm, you could spend up to $500 per year.

If you choose to start your LLC by using a business formation company, they often include a registered agent service in their packages. Feel free to take a look at our registered agent recommendations article for more information.

$0 - $100

3. File Articles of Organization

What are Articles of Organization? These documents turn your business idea into an actual legal entity ready to sign contracts and do business. Illinois law states that filing the articles of organization makes it official.

To file, you’ll need the following basic information as listed in Section 5-5 of the Limited Liability Company Act:

  • The name of your LLC
  • The purpose of your LLC
  • If not permanent, an estimated length of time that the company will exist
  • The registered street and mailing addresses of the LLC
  • The name and address of the LLC’s registered agent
  • The name and address of each person forming the LLC
  • How long the LLC will last (by default, it won’t dissolve unless you say when you want it to)

If this feels overwhelming, you can simply use the online form provided by the Secretary of State (form LLC-5.5(S)) as a go-by.

The filing fee for your articles of organization is $150.

Average processing times are estimated to be between 5-10 business days for online filing. If you decide to mail in your forms you can expect extra time.

If you need your articles processed sooner, the Illinois Secretary of State does offer expedited processing. For $250, your articles will be processed within 24 business hours of receipt by the office.

To save time and avoid the hassle of LLC filings, all seasoned entrepreneurs use LLC formation services. For recommendations, check out our article on the best LLC services.

5 - 10 days

4. Draft an Operating Agreement

What is an operating agreement? An operating agreement is a contract between you and other members of your LLC. It outlines the rules by which your company does business, keeps you prepared for everyday situations, and protects against the unexpected.

Your operating agreement should list each member of the company and how they’re expected to work. It can be as simple or detailed as you’d like to make it.

Although not required by Illinois LLC law, we strongly urge you to consider one. Without an operating agreement, state law acts as a fallback. Remember that state laws don’t always work in favor of the business owner.

The benefits of having an operating agreement include:

  • They determine the rights and duties of LLC members. If one LLC member is responsible for running the business or managing the books, the operating agreement should say so.
  • They say whether the LLC has a member or non-member manager and what the manager has the right to do. Managers also have special duties to the company and the members. The operating agreement should state these.
  • They outline what the LLC is legally able to do. The operating agreement should also set down how the company is allowed to conduct its business from day to day.
  • They say how new members can join the company. They also have rules about how exiting members can leave.
  • They set down how and when profits are paid to members. They can also create different types of membership and payment schemes.
  • They say whether members or managers are in charge. They also say how to hire and fire managers.
  • They say how and under what circumstances the LLC should end. You might not want to dissolve your business now, but you might in the future. It’s best to think about it and plan before it becomes an issue.
  • They say how to change the rules. You may need to amend your operating agreement in the future. The operating agreement should set down the rules for making changes.

Several strict limits on the power of the agreement to change the law are listed in Section 15-5(b). When you are drafting an operating agreement for your company, you should consult a professional to ensure your company’s best interests are minded.

When it comes to hiring, firing, and everything in between, an operating agreement allows you to customize the rules of the LLC according to your expectations. They should be signed by every member and kept somewhere safe.

Many of the best LLC formation services provide operating agreement templates for as low as $50, and we highly recommend them.


5. Get an EIN (Employer Identification Number)

What is an EIN? Employer Identification Numbers are tax identification numbers assigned to businesses by the Internal Revenue Service. They function much like social security numbers, but for businesses instead of individuals. They allow the IRS to keep track of all the companies and other business entities that pay taxes.

Here are the most common cases in which your business will need an EIN:

  • You have more than one member
  • You have employees
  • Your business is taxed as a C or S corporation

With that in mind, we highly recommend getting an EIN even if they’re not required for your business. Most banks and online payment services require them to open a business bank account.

Filing for an EIN is easy and can be done in just a few minutes on the IRS website. Alternatively, you can also file via mail or fax.

Obtaining an EIN is always free of charge and shouldn’t be paid for unless part of a larger LLC formation package.

Read More: How to get an Employer Identification Number in Illinois


Cheapest way to start your LLC

Do it Yourself
Gain personal knowledge
Lower upfront cost
You're losing money when you consider how much time it takes
There's the risk of making a mistake
It's a headache
Potential price
Potential time
5+ days
Formation Service
Very easy to use
Affordable ($39 for an LLC)
Same-day filing
Highly reliable
Not ideal for complex LLCs
Potential price
Potential time
30 min
A lawyer can help you manage risk
Offers more customization when you need it
Costs more than any other method
Finding one takes time
Slower compared to formation services
Potential price
> $400
Potential time
5+ days

Licenses and Permits in Chicago, IL

Certain types of businesses require professional licensing, such as doctors, lawyers, and private investigators, just to name a few.

Check with the Illinois Department of Financial and Professional Regulation if you have questions about any licensing requirements for your business.


In Illinois, your articles of organization serve as the license or permit at the state level. No other documentation is required.


The City of Chicago requires permitting or licensing for a small portion of businesses. To apply for one of these permits or learn more, visit the City of Chicago Permits Page and the City of Chicago Business Licensing Page.

Remember that your business may need specific licenses or permits beyond the general ones listed here. Contact the City of Chicago if you have any questions.

Support for Small Businesses in Chicago, IL

As the 3rd largest city in the US, Chicago offers plenty of support for your small business.  Here are just a few local Chicago organizations that can help:

Next Steps After you Register your LLC

Now that you’ve made it official and formed your Chicago, IL LLC, there are a few more easy steps to follow to complete the setup and protect your new business.

  • Register a Matching Domain

    There are several advantages to buying a matching domain, even if you don’t plan on building a website just yet.

    Competitors can easily buy your domain and its variations to keep you from using them.

    There are also people who intentionally search public records to find newly registered LLCs to buy and resell them at a higher price.

    A domain name from a provider like will cost you around $20 to $50 per year.  These hosts offer regular specials and discounts that help you save money even if a website isn’t in your immediate future.

  • File for a DBA (Doing Business As)

    Illinois allows you to do business under an assumed name (also known as a DBA). This means you can operate under a name different from the business’s legal name.  It can also help distinguish your company from other similarly named businesses.

    For example, your LLC’s legal name is “John’s Air Conditioner Service, LLC” but you want customers to know you as “Chicago AC Service,” “Chicago 24/7 Air Conditioner Repair,” or anything other than “John’s Air Conditioner Service.”

    Section 1-20 of the Illinois Limited Liability Company Act gives rules for using a DBA in Illinois. DBAs require an application to the Secretary of State with the following information:

    • The DBA you want to use
    • Your LLC’s legal name
    • Where your LLC was organized (Illinois)
    • How long you intend to use the DBA (not longer than 10 years)
    • The street or mailing address of your LLC’s principal office, whether inside or outside of Illinois
    • The counties in which your LLC is doing business using the DBA

    Illinois DBAs are good for five years at most. The exact expiration date will depend on the month that you filed your articles of organization.

    The application to obtain a DBA should be made on form LLC-1.20. An Illinois DBA costs $30 per year and is renewed every five years.

    Cook County Filing

    Anyone conducting business under an assumed name in Illinois must register in the Office of the County Clerk in the county where they are to conduct or transact the business.

    The State mandated fee for filing the certificate is $50. You may pay with cash, check, debit card, or credit card. Visit the Cook County Clerk Assumed Business Name Registration page for more details.

    The information on the certificate must be published in a newspaper within Cook County. The first publication must be within 15 days after the certificate is filed in the office of the County Clerk.

  • Stay Compliant

    Keeping your business compliant is vital to avoid fines, penalties, or state sanctions. You’ve come too far to let compliance issues shut you down.

    Limited Liability Company Act 50-1 requires your LLC to file a yearly report with the Secretary of State. This report must include:

    • Your LLC’s name
    • The address of your principal place of business
    • Your LLC’s registered agent and their office address.
    • The names and addresses of all LLC managers and/or members acting as managers
    • Any other necessary information requested by the Secretary of State

    The report should be filed within 60 days before your LLC’s “anniversary month,” as described above. If you file the report on time, the filing fee is $75. An LLC that files a late report will also be charged a penalty of at least $100.

    Section 1-40 of the Limited Liability Company Act also requires your LLC to keep these records available at its principal place of business:

    • The full name and last known address of each LLC member
    • The amount of cash each member has put into the LLC
    • The agreed value of the other property or services each member has contributed or has agreed to contribute
    • The date each LLC member joined the company
    • The articles of organization
    • Copies of the LLC’s tax returns and reports for the last three years
    • The operating agreement
    • Any LLC financial statements for the last three years

    The State of Illinois does not tax your LLC directly. Instead, it taxes income on members’ personal tax returns.

    Illinois may impose a personal property replacement tax on LLCs treated as pass-through corporations. For more information, consult with the Illinois Department of Revenue.

LLC Formation FAQs

What are the benefits of an LLC?

Most importantly, having an LLC will ensure your personal assets are protected if your business cannot pay its debts. Running your business through an LLC can also provide you with better tax treatment. In addition, LLCs have fewer and less complicated reporting requirements compared to other types of businesses, making them particularly suitable for smaller businesses.

Do I have to form an LLC to start a business?

It is not strictly necessary to form an LLC in order to start a business. You can engage in business as a sole proprietorship instead. However, in that case, your personal assets may be at risk if your business takes on too much debt or loses a lawsuit in court.

How much does it generally cost to form an LLC?

It doesn’t cost much to set up an LLC for your business. In most states, you will need to pay less than $150 to register your new LLC with the local state authorities. In some states, you may need to pay some additional costs later on, for example, when filing an annual report or filing for a DBA.

How long does it take to form an LLC?

The time it takes to have your LLC approved can vary wildly depending on the state, the filing method you used and if you opted for expedited filing. In some states, you can have your LLC approved in as little as one day, while in others, it may take weeks or even months.

If you want the fastest possible turnaround time, you should consider using online filing and pay for expedited service, if available.

How will my LLC be taxed?

The IRS and most state tax authorities treat LLCs as “pass-through” entities. This means that your LLC does not pay taxes directly (as corporations do). Instead, the tax burden is passed through to the members of your LLC. The members will then include profits and losses from the LLC’s business on their personal income tax returns.

In what state should I form my LLC?

It is generally best to form your LLC in your home state, where you will actually carry out your business. Some people believe that it is advantageous to form your LLC in Delaware or Nevada. In reality, you would then have to register with the authorities in your home state as a foreign LLC and pay additional fees – without much benefit in return.

Do I need to file for a DBA?

You are not generally required to file for a DBA (“Doing-Business-As”). However, most business owners choose to do so anyway. Getting a DBA will allow you to omit the letters LLC from your customer-facing business name. You can also have multiple names for your LLC if you want to run more than one business through your LLC.

Can I form an LLC if I am not a US citizen or US resident?

Yes, you can form an LLC for your business in any US state. There is no requirement for you to be a US citizen in order to form an LLC, nor do you need the right to reside in the US. If your business is going to own physical property in a given state, you may want to form your LLC in that state.

Do I need to hire an attorney to form an LLC for my business?

No, you don’t need to hire an attorney to form an LLC for you. It is generally much cheaper and straightforward to file the necessary paperwork yourself or to hire an affordable LLC formation service to handle the work on your behalf. However, you may want to consider hiring an attorney if your business is very complex.