If you want to know how to get an LLC in Illinois, you’ll need to consider creating an Illinois LLC operating agreement. This helps you to open an LLC that protects you and your business members.
Let’s take a look at how to form an LLC in Illinois as well as an LLC operating agreement template.
- Is an LLC Operating Agreement Required in Illinois?
- Why Should I Have A Illinois LLC Operating Agreement?
- Illinois Operating Agreement Laws
- How Much Does it Cost to Form an LLC in Illinois?
- How to Form an LLC in Illinois
- Illinois LLC Operating Agreement Template
- Updating and Amending Your Illinois LLC Operating Agreement
- Illinois LLC Operating Agreement FAQs
- Illinois LLC Operating Agreement Relevant Forms and Resources
Is an LLC Operating Agreement Required in Illinois?
An LLC operating agreement is not required in Illinois. You can set up your business and commence operations solely with your articles of organization and correct state paperwork.
Why Should I Have A Illinois LLC Operating Agreement?
Although an LLC operating agreement isn’t required in the state of Illinois, there are several reasons to create one including:
- Avoid conflict among business partners – Having an Illinois multi-member LLC operating agreement will set out clear expectations about what is required from each partner, including their roles and responsibilities which can prevent any misunderstandings.
- Protect a company’s limited liability status – An LLC operating agreement proves that the LLC is a separate legal entity. Without an operating agreement, an Illinois company could be mistaken to be a sole proprietorship or partnership for tax and lawful purposes.
- Have more say in how your LLC functions – With or without an operating agreement, your company will have to adhere to the Illinois Limited Liability Company Act. However, having an operating agreement will allow you to have more say in how your LLC operates.
Illinois Operating Agreement Laws
Although operating agreements aren’t required by the state of Illinois, that doesn’t mean that you shouldn’t have one in place. And, if you do choose to implement one, you’ll need to be aware of the laws surrounding it – (805 ILCS 180/) Limited Liability Company Act.
For one, you should note that under an LLC operating agreement in Illinois, all members have equal rights to the management except when outlined in the agreement. Agreements must outline the said members and managers of the LLC as a part of their agreement.
Aside from this, LLC operating agreements must outline the operations of the business. They should also state the rights, duties, and responsibilities of each member of the organization.
Operating agreements for LLCs in Illinois also outline how the company should be dissolved. And, they should have a clear process for appointing new members or managers that involves all current members of the company.
You also be aware that when naming your LLC you must ensure it contains the last words: ‘limited liability company’, ‘L.L.C.’, or ‘LLC’. The abbreviations ‘Ltd.’ and ‘Co.’ are not allowed in Illinois. The name must also not include the words ‘Corporation’, ‘Corp.’, ‘Incorporated’, ‘Inc.’, ‘Ltd.’, ‘Co.’, ‘Limited Partnership’, or ‘L.P’.
How Much Does it Cost to Form an LLC in Illinois?
The cost of the paperwork to form an LLC in Illinois is $150. In addition, you’ll need to pay a $75 annual franchise reporting fee.
Finally, you’ll also need to file a series LLC document. This piece of paperwork costs $400 to file.
One good thing about starting an LLC in Illinois is that the costs are the same regardless of whether you’re starting a foreign or domestic LLC. This makes it much more affordable for foreign LLCs than it would be in other states.
How to Form an LLC in Illinois
Now that you know a little bit more about LLCs in Illinois, it’s time to get down to business and talk about how to register an LLC in Illinois. To do so, you’ll need to follow a few simple steps:
Step 1 – Find a Registered Agent
In Illinois, all businesses using the LLC format must have a Registered Agent. A Registered Agent is a person or entity that will receive government notices as well as handle service of process for the business.
When choosing a Registered Agents, businesses have two options. They can either select an Illinois state resident or can choose their agent to be a business that can legally conduct business within the state.
The registered agent must have a physical street address in Illinois.
Step 2 – File Your Registration Documents
After you’ve found a registered agent, it’s time to sort through your registration documents. To file these documents, you’ll need to either choose whether you’re starting a domestic LLC or a foreign LLC.
Once you’ve chosen the type of LLC you’ll be starting, you’ll need to print out your paper applications. Make sure to print two copies of your applications. Then, fill them out and send them to the Illinois Secretary of State.
Remember that if you’re starting a foreign LLC you’ll need to include a certificate of existence with your application. The certificate can’t be older than 60 days and must be hand-signed by a company officer.
In addition to following these steps, you can file your paperwork online.
Step 3 – Pay Your Filing Fee
After you’ve finished getting your paperwork together, it’s time for you to pay your filing fee. The filing fee is what allows you to actually receive your business registration and commence operations.
You can pay your filing fee online or you can mail it to the Secretary of State of Illinois as a paper check or money order. If you pay online, you’ll get a slight discount.
Step 4 – Set Up Your Operating Agreement
Even though you’re not required to have an LLC operating agreement in Illinois, it’s a great idea to get one. That way you can keep your business structure consistent and ensure you’re legally protected in court in the event that things go wrong in your company.
Step 5 – Get an Employer Identification Number (EIN)
Finally, you will need to get an employer identification number, also known as an EIN. This nine-digit number helps the IRS identify your business for tax purposes.
Aside from tax filing, you’ll need this number to hire employees, open a business bank account, take out a loan, or get a business credit card. You can apply for the number on the IRS website.
Illinois LLC Operating Agreement Template
So, are you ready to get started creating an Illinois operating agreement? Check out this Illinois operating agreement template to get you started:
LLC Operating Agreeement
Updating and Amending Your Illinois LLC Operating Agreement
The easiest way to amend or update your Illinois LLC operating agreement is to use an Amendment to an LLC Operating Agreement.
You’ll need to make sure your operating agreement can be amended by owners or if there are any other restrictions originally included— make sure you follow the rules of the agreement.
Ensure that all members approve the changes being made to the agreement and keep the amendment document with the operating agreement as an internal document. You do not need to file the amendment with the state unless you are changing managers or members.
Illinois LLC Operating Agreement FAQs
Where do I get an LLC operating agreement in Illinois?
You can get an Illinois LLC operating agreement template from Legal Templates. You can download the agreement in PDF or Word format or you can use our document builder to make the process of creating your agreement quick and easy.
Does a single-member LLC need an operating agreement in Illinois?
A single-member LLC is not required to have an operating agreement in Illinois, but it is highly recommended. One of the main reasons for having an operating agreement as a single-member LLC is to prove your limited liability status, that the business is a separate legal entity with limited liability protection.
Do I file an LLC operating agreement in Illinois?
No, you don’t need to file an LLC operating agreement in Illinois. As the agreement is an internal document, it does not need to be filed with the state. However, you are required to keep your LLC operating agreement on file at your place of business or at a location specified in the agreement, in line with Illinois statute 805 ILCS 180/1-40.
Illinois LLC Operating Agreement Relevant Forms and Resources
- Application to Reserve a Name (Form LLC-1.15) (PDF)
- Articles of Organization (Form LLC-5.5) | PDF
- Foreign LLCs: Application for Admission to Conduct Business (Form LLC 45.5) | PDF
- Domestic Series LLCs: Articles of Organization (Series) (Form LLC 5.5(S)) | PDF
- Foreign Series LLCs: Application for Admission to Transact Business (Series) (Form LLC-45.5(S)) | PDF