📋 Business Formation in Illinois
Forming an LLC in Illinois requires filing Articles of Organization with the Illinois Secretary of State. The state filing fee is $150.
- ✓Choose a unique LLC name including "LLC" or "Limited Liability Company"
- ✓File Articles of Organization with the IL Secretary of State — $150 fee
- ✓Designate a registered agent with an IL street address
- ✓Draft an Operating Agreement (not required to file, strongly recommended)
- ✓Obtain an EIN from the IRS
- ✓File Annual Report before your LLC's anniversary date each year — $75 fee
- ✓Register for Illinois Business Income Tax with the IL Department of Revenue
- ✓Obtain required local business licenses for your city/county
Illinois LLCs are pass-through entities by default. However, Illinois imposes a personal property replacement tax (PPRT) of 1.5% on LLC net income in addition to federal taxes. LLCs electing to be taxed as corporations pay the IL corporate income tax rate of 9.5%.
📅 Key Filing Deadlines & Fees
The Illinois Annual Report is due BEFORE your LLC's anniversary month — not after. If your LLC was formed on March 15, the annual report is due by February 28 of each subsequent year. Missing it results in penalties and potential dissolution.
| Filing / Requirement | Deadline | Fee |
|---|---|---|
| Articles of Organization | At formation | $150 |
| Annual Report | Before anniversary month each year | $75 |
| Personal Property Replacement Tax (PPRT) | April 15 (or with federal extension) | 1.5% of net income |
| IL State Income Tax Return | April 15 (or Oct 15 with extension) | Varies |
| Registered Agent Maintenance | Ongoing | Varies |
👥 Employment Law Basics
Illinois has strong employment protections and a legislated minimum wage increase schedule through 2025.
- ✓Minimum wage: $15/hr (effective January 1, 2025)
- ✓Chicago minimum wage: $16.60/hr (2025, higher than state minimum)
- ✓Overtime: Federal FLSA rules — 1.5x pay for hours over 40/week
- ✓Workers' comp: Required for all employers with 1+ employee
- ✓Paid leave: Illinois Paid Leave for All Workers Act (2024) — 40 hours of paid leave per year for all employees
- ✓Non-competes: Enforceable only for employees earning $75,000+/year (increasing to $90,000+ by 2027); must be reasonable in scope
- ✓BIPA: Biometric Information Privacy Act — strict rules on collecting employee biometric data (fingerprints, facial recognition)
📄 Relevant Legal Templates
Free downloadable templates commonly used by Illinois businesses.
LLC Operating Agreement
Best practice for Illinois LLCs
Employment Contract
IL-compliant employment agreement
Non-Compete Agreement
IL non-compete for $75K+ employees
NDA Template
Non-disclosure agreement for IL businesses
Independent Contractor Agreement
Contractor agreement for IL engagements
Service Agreement
Client services contract template
❓ Frequently Asked Questions
How do I form an LLC in Illinois?
File Articles of Organization with the Illinois Secretary of State online or by mail. The filing fee is $150. Online filing typically processes in 1-3 business days. You'll also need a registered agent with an Illinois street address.
When is the Illinois Annual Report due?
The Illinois Annual Report is due BEFORE your LLC's anniversary month. For example, if you formed your LLC in March, the annual report is due by the end of February each year. The fee is $75. Late filing results in penalties.
What is the Illinois Personal Property Replacement Tax?
The PPRT is a 1.5% tax on the net income of LLCs (as pass-through entities) doing business in Illinois. It's in addition to federal taxes. LLCs electing S-Corp or C-Corp status have different rates. The tax is filed with Form IL-1065 or the appropriate Illinois tax return.
Are non-compete agreements enforceable in Illinois?
Illinois law restricts non-compete agreements to employees earning at least $75,000 per year (threshold increases to $90,000 by 2027). The agreement must also be reasonable in scope and duration, and the employer must give the employee at least 14 days to review it before signing.
What is the Illinois Paid Leave for All Workers Act?
Effective January 1, 2024, the Illinois Paid Leave for All Workers Act requires most employers to provide employees with up to 40 hours of paid leave per year. Unlike specific sick leave laws, this leave can be used for any reason. Employees can start using leave after 90 days of employment.
Disclaimer: This page provides general legal information only. Laws change frequently. Always consult a licensed attorney in Illinois for advice specific to your situation.