The Chicagoland Lawyer
Start Your First LLC
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A First-Time Owner's Guided Walkthrough

This is your first LLC. Build it right.

An LLC is a liability shield, and a shield protects you when it is assembled correctly. I form these for Illinois landlords and investors at a flat fee, and every formation moves through the same five stages. Scroll through them in order. By the bottom of this page you will know what the state requires, what the banks require, and what the 2025 law change now expects of you.

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Justin Abdilla, Illinois business and real estate attorney
Justin Abdilla · Business & Real Estate Attorney
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The road ahead

Five stages. One company. Built once, built right.

The state's part takes days. The parts that actually protect you, the agreement, the bank account, the annual discipline, are yours to get right, and they come in the same order every time.

Stage 01

Your company needs a name the state will take.

Your LLC's name must be unique in Illinois, and it must contain "LLC," "L.L.C.," or "Limited Liability Company." Restricted words like "Bank" or "Insurance" require special licensing. Search the Secretary of State's business database before you fall in love with anything. My landlord clients usually land somewhere clean and professional: the street address plus "Properties LLC," or a family name plus "Holdings LLC."

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Name, unique statewide
"LLC"
Required in the name

Get this right

01

Search before you commit. The Secretary of State rejects duplicate names, and rebranding after you have printed leases and opened accounts costs real money. Two minutes in the database first.

02

Name for the portfolio, not the property. If a Series LLC is in your future, pick an umbrella name that can hold Series A, B, and C as you grow.

03

Steer around restricted words. "Bank," "Insurance," and similar regulated terms trigger licensing requirements you want no part of.

805 ILCS 180, the Illinois Limited Liability Company Act; Illinois Secretary of State LLC publications.

Stage 02

One document brings it to life.

The Articles of Organization, filed with the Illinois Secretary of State with a $150 fee, create your LLC as a legal entity. The form asks for your name, your principal office, whether the company is member-managed or manager-managed, and your registered agent: a person or company with a physical Illinois address, available during business hours, who receives lawsuits on the company's behalf. Small choices here follow you for years. Errors in your Articles surface at real estate closings, and the registered agent decision determines whose home address sits on the public record.

$0
One-time state filing fee
0
Registered agent required

Get this right

01

Choose member-managed or manager-managed before you file. Silent investors, family money, and future partners all point toward manager-managed. Solo owners usually stay member-managed.

02

Appoint the registered agent deliberately. Serving as your own agent puts your address on the public record and requires you to be available to accept service in person. A registered agent service buys privacy and reliability.

03

Proof the Articles, then guard the copy. Mistakes in this document cause problems at closings. Keep a certified copy somewhere safe, ideally with your closing attorney.

Articles of Organization filed with the Illinois Secretary of State, Department of Business Services; 805 ILCS 180.

Stage 03

The Operating Agreement is the backbone.

The statute treats an Operating Agreement as optional. Banks, lenders, and courts treat it as mandatory. You need it to open a business bank account, borrow against the property, or sell anything the LLC owns, and since the 2025 amendment to the LLC Act, a current Operating Agreement is some of the strongest evidence that your company is a real, separate business instead of an alter ego. Mine run 9 to 15 pages across twelve articles: ownership percentages, profit and loss allocation, management structure, voting thresholds, transfer restrictions, buyout rights, and dissolution.

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Articles inside mine
9-0 pages
Typical length

Get this right

01

Sign it before you buy. Illinois lets you close on a property without one; your bank will refuse to open the account without it. Put it in place first and everything downstream gets easier.

02

Match it to your real ownership. Family money and partner money need customized buyout provisions, rights of first refusal, and transfer restrictions. A template treats every company the same; a lawsuit treats none of them the same.

03

Keep it current. When members join or leave, the agreement gets amended the same month. A stale agreement reads like a company nobody actually runs.

Operating agreements under 805 ILCS 180; my standard twelve-article structure is outlined on the Operating Agreement page.

Stage 04

Paper becomes a working business.

The company exists; now it needs plumbing. The FEIN comes free from the IRS, online, in about 15 minutes, and it keeps your Social Security number off business documents. The FEIN plus your Operating Agreement opens the business bank account that every dollar of rent should flow through. Then the local layer: most municipalities want a business license, Chicago's registration runs online, and depending on what you rent you may need an Illinois Business Tax number from MyTax Illinois, which processes in 7 to 10 business days.

0 min
Free FEIN from the IRS
7-0 days
State tax number processing

Get this right

01

Get the FEIN even as a single member. Your Social Security number could technically serve for a one-property company with zero growth plans. The FEIN keeps it off every lease, W-9, and vendor file you will ever sign.

02

Run every dollar through the company account. Rent in, expenses out, all in the LLC's name. This habit is the single cheapest piece of liability protection you will ever buy, and Stage 5 explains why.

03

Answer the state tax question now. Employees, commercial property, or short-term rentals in Chicago mean you need the IBT registration. Sorting it out at formation beats discovering it at license renewal.

IRS online EIN application; MyTax Illinois registration; City of Chicago business account portal.

Stage 05

Since 2025, the shield works only if you use it.

Every Illinois LLC files an annual report: $75, due before the first day of your anniversary month, with a $100 penalty when it is late and administrative dissolution when it is ignored. And the stakes rose on January 1, 2025: Public Act 103-0920 amended the LLC Act to make clear that members and managers can be held personally liable through common law veil piercing. Commingled funds, a stale Operating Agreement, missed reports, and leases signed in your own name are exactly the evidence a veil-piercing claim is built from. Forming the LLC was Stage 2. Running it like a real company is the rest of your ownership.

$0/yr
Annual report fee
$0
Late penalty
0 days
Calendar alarm before the deadline

Get this right

01

Calendar the report 60 days out. The state sends your registered agent a reminder about 45 days ahead; treat that as a backup, not a system. Filing early online processes immediately.

02

Keep the walls up. Separate bank account, separate books, zero personal spending from company funds. Commingling is the first exhibit in every veil-piercing case.

03

Sign as the company. Leases, contracts, and vendor agreements go in the LLC's name, with you signing as member or manager. A lease in your personal name hands the plaintiff their argument.

04

Audit yourself once a year. My Illinois LLC compliance checklist covers the full annual sweep in one sitting.

P.A. 103-0920, amending 805 ILCS 180/10-10 (eff. Jan. 1, 2025); annual reports filed with the Illinois Secretary of State.

First-timer questions

What every first-time owner asks me

How much does it cost to start an LLC in Illinois?

The state charges a one-time $150 filing fee for the Articles of Organization, and a Series LLC filing is $400. Every LLC then owes a $75 annual report fee each year. My flat fee for a complete formation is $750, which includes the state filing fee, the Articles, the Operating Agreement, and the FEIN.

Do I really need an Operating Agreement?

The statute makes it optional; banks, lenders, and courts make it mandatory. You need it to open a business bank account, and since the 2025 amendment to the Illinois LLC Act confirmed that members can face common law veil piercing, a current Operating Agreement is some of the strongest evidence that your LLC is a real, separate business.

Can I be my own registered agent?

Yes. Illinois requires every LLC to have a registered agent with a physical Illinois address who is available during business hours. Serving as your own agent puts your personal address on the public record and requires you to be available to accept lawsuits in person, which is why many landlords use a registered agent service instead.

What happens if I miss my annual report?

The state adds a $100 late penalty on top of the $75 fee, and continued failure leads to administrative dissolution. A dissolved LLC loses the liability protection you formed it for, so calendar the deadline 60 days before your anniversary month and file early.

Flat fee, published

You collect the rent. I'll build the company.

Bring me the property and the owners. I handle the entire formation, the Articles, the Operating Agreement, the FEIN, all of it, for a flat $750 with the $150 state filing fee included.

Complete formation $750 Annual report filing $200 Compliance plan $149/yr

The formation fee includes the state's $150 filing fee. Ongoing state charges are separate and paid to the Secretary of State: the $75 annual report fee each year, plus any late penalties.

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