How to Start a Single-Member LLC in Illinois

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Last updated February 17, 2023
Written by Dmytro Kondratiev
Editor, lawyer
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In order to register an LLC, you don't need a large team of founders and managers. You can be the sole organizer. In that case, your entity will be called an SMLLC.

Steps to Start an SMLLC in Illinois:

  • Name Your Single Member LLC;
  • Appoint a Registered Agent;
  • File Your Single Member LLC Articles of Organization;
  • Draft an Operating Agreement;
  • Get an EIN.

If you want to outsource the process of creating a single-member LLC to professionals, here are the top services for that:

Want to know how to start a single-member LLC in Illinois by yourself? Keep Reading!

How to Form a Single-Member LLC in Illinois?

If you haven't yet made a firm decision to contact LLC formation service providers to start your business, check out this step-by-step guide on how to form an SMLLC in Illinois. The process is not as time-consuming as it may seem to some newcomers to the biz.

Step 1: Name Your Single-Member LLC

You may be thinking that choosing a name for your SMLLC is the easiest step. But it's not. You should take this step seriously so you don't have to resubmit your application.

Follow these guidelines to avoid having to re-file your application:

  • Use abbreviations "LLC", "LC" or phrases "Limited Liability Company", "Limited Company";
  • Check the company name for uniqueness. Two companies with the same or similar names cannot operate in the state;
  • Do not use profanity;
  • Your business name cannot hurt the feelings of religious believers, minorities, or other segments of the population;
  • In order to use certain words (medicine, bank, lawyer) in your name, you need to be licensed first.

The company name can also be reserved if you are concerned that someone might hijack it while you are preparing your paperwork. The reservation period is 90 days maximum.

The cost to reserve a business name is $25. Complete the Form LLC-1.15: this is the Application to Reserve a Name.

Step 2: Appoint a Registered Agent to Get a Single-Member LLC in Illinois

Want to know how to start a single-member LLC in Illinois in compliance with state requirements? Then, you need to appoint a registered agent for your SMLLC.

This professional will be the liaison between your company and the state. RA responsibilities include:

  • Being available at the specified address during business hours 5 days a week;
  • Receive all procedural documentation and important notices;
  • Filter spam emails.

Doing business without a registered agent is a gross violation of the law, which can cause trouble for your business and a loss of credibility with the state.

You can perform RA tasks yourself or seek help from top registered agent service providers. The cost of commercial RA services ranges from $49-$300/year.

Step 3: File Your Single-Member LLC Articles of Organization

The Articles of Organization is the most important document of your company. Once it is approved by the Secretary of State, you will be able to identify yourself as a business owner.

In this document, you will need to include the following information:

  • The founder's name and signature;
  • Information about the registered agent;
  • The address of the company's main office;
  • Other basic info.

Once you complete the form, you will need to pay a $150 fee. You can confirm your application online by visiting the Department of Business Services website or by printing out the form and mailing it in:

Department of Business Services, 

Limited Liability Division, 

501 S. Second St., Rm. 351, Springfield, IL 62746

Step 4: Draft an Operating Agreement For Your SMLLC

An Operating Agreement is an internal company document that is intended to legally certify the rules of the company's operation. Later on, it can help resolve disputes between LLC members (if you want to expand).

In fact, an operating agreement can include any information critical to your company:

  • The rights and responsibilities of team members;
  • Distribution of compensation, etc.

To create this document, choose a template that suits you online and adapt it to your needs. You can also ask a lawyer to help you do it properly.

Step 5: Get an EIN for Your Illinois Single-Member LLC Registration

Every business needs an EIN to pay taxes. In fact, this is the easiest step in forming an SMLLC. Moreover, getting this number is absolutely free and does not take more than 5-10 minutes.

To form a single-member LLC in Illinois and obtain an EIN, visit the IRS website. There, you can easily get your number.

What Is a Single-Member LLC in Illinois?

The Limited Liability Company Act allows creating a single-member LLC in Illinois. This means that you can register such a legal entity and get some benefits.

Also, forming an SMLLC gives you more credibility with government agencies and customers. The attachment "LLC", "LC", or "Limited Liability Company" next to your company name is deemed quite prestigious.

For the IRS, your business will be utterly transparent, and the IRS will not even require you to file corporate income tax returns. All profits and losses will be reflected on your personal tax return.

What is a single-member LLC in Illinois, and what are its benefits?

  • Personal Liability Protection. In the event of a lawsuit against your business, your personal assets will not be impacted (as long as the corporate veil is maintained);
  • Ease of Business Maintenance. Unlike starting a corporation, an LLC is easy to maintain, and there is no need for additional reporting and board assembly;
  • Convenient Tax System. The IRS treats SMLLCs as pass-through entities, which gives you tax advantages.

SMLLC Illinois Cost: How Much Is a Single Member LLC in Illinois

Your major expense when creating a Single-Member LLC is filing the Articles of Organization. It will cost you $125 for the Secretary of State to process this document.

Other costs you may incur:

Annual Report filing$75
Name Reservation fee$25

Keep Your Company Compliant

Want to know how to get a single-member LLC in Illinois and keep it in good standing with the state? Then you have a few more tasks to accomplish.

Open a Bank Account

To keep your assets and company holdings separate, open a separate bank account for your SMLLC. That way, you'll keep the corporate veil intact.

In the event of a claim or lawsuit against the company, your assets won't be affected. Also, legally, you separate yourself from the business and are not personally responsible for adverse situations.

File an Annual Report

In your annual report, you include all the changes that occur after registering a single-member LLC in Illinois. For example, it may be a change of address or a registered agent.

The fee for filing the annual report with the Secretary of State is $75.

Pay Your Taxes Dutifully

Creating SMLLC gives you a unique opportunity to choose your own taxation system: standard, S-corp, or C-corp.

By default, your company will be a pass-through entity. You will have to report all profits and losses of the company on your personal tax return. So, your business will not even pay corporate income tax. 
If you choose a different tax system, the terms may change. Contact the IRS or your lawyer for advice on choosing a tax system.