How to Start an LLC in Illinois for Free

You can't start an LLC in Illinois entirely for free, but it might cost less than you think. Find out where and how you can save below.

While some states provide fee waivers for veterans, anyone who wants to launch an LLC in Illinois has to pay the $150 filing fee. No exemptions—not even veterans.

Aside from the initial filing fee, you may face other expenses along the way. But with smart planning and mindful spending, you can keep the costs to a minimum.

Let's start with this battle-tested approach.

Start Your LLC for $0 - Just Pay State Fees

• Check business name availability
• Lifetime compliance alerts
• Lifetime support via email and phone
• LLC filing + optional tools to build your brand

Get Deal

Form Your LLC at $0 + State Filing Fees

Form your business at $0, just pay the state filing fees, with the Basic package. The Basic package includes:

• Articles of organization
• Name check service
• Digital welcome packet
• Customizable website

Form Your LLC

Starter - $0 + State Filing Fees

• Includes 1 optional free year of Worry-Free Compliance that renews at $199/year
• Standard filing speed
• 100% accuracy guaranteed
• Other services are available with additional costs

Learn More

DIY LLC Formation

Since you can't avoid the $150 filing fee, consider handling the following formation steps yourself to minimize your startup costs.

Is it worth it to form an LLC in Illinois?
Yes, setting up an LLC in Illinois can be worth it. The state has one of the highest GDPs and populations in the country, signifying a large market potential. With a slightly higher-than-average personal income, residents are likely to have more money to spend on goods and services.

Verify if your LLC name is available

Cost: Free

You don't need to pay to name your limited liability company, just a creative mind perhaps. Think of something unique, meets state requirements, and fits your business.

However, make sure to check if it's still available before finalizing your choice. Head straight to the Illinois Secretary of State website and hit Business Entity Search to look it up. This won't cost you a thing and can help prevent your application from being rejected.

If it's available, file your LLC right away to prevent somebody else from grabbing the same name. You don't need to pay the $25 name reservation fee. Unless you aren't ready to form your LLC yet and just want to secure the name in advance.

Appoint yourself as the registered agent

Cost: Free

Illinois requires LLCs to have a registered agent. This is a person or entity designated to receive legal documents or state notices on behalf of your LLC.

You can eliminate recurring registered agent fees (which typically range from $50 to $300 annually) by serving as your own agent.

Keep in mind you'll need to be available during business hours at a physical Illinois address to ensure you don't miss important documents or legal notices.

File the Articles of Organization yourself

Cost: $150 (filing fee)

The Articles of Organization is your LLC's birth certificate. It contains key information about your business, like its name, address, and legal structure. Your Illinois LLC will only become official when the Secretary of State approves it.

You can't avoid the $150 filing fee, but you can minimize expenses by filing the paperwork yourself directly with the state.

Additionally, if you're targeting a specific launch date, you can avoid paying for expedited services by allotting enough time for processing—which can take up to 10 business days in Illinois.

So far, you've only spent $150 for your LLC. See if that can hold up.

Apply for an EIN online

Cost: Free

After your LLC is approved, get your Employer Identification Number (EIN) through the IRS website. This won't cost you a thing, so there's no need to pay a third party solely for this free government service.

If you have a single-member LLC without employees, you can skip this process. Use your Social Security Number (SSN) or Individual Tax Identification Number (ITIN) for taxes instead.

However, some banks require an EIN when you open a business bank account with them. That's why it's a good idea to still get one, even if you're not required to.

Draft your own Operating Agreement

Cost: Free

An operating agreement is a document outlining the rules, structure, and operations of your LLC. While Illinois doesn't require it, it's still better to have one.

Your operating agreement doesn't have to be complex; a one-pager works fine. Especially if you're a single-member LLC. No need for fancy clauses unless you're scaling big.

You can just draft it using free templates available online instead of hiring a lawyer, which could easily cost $1,000 or more for a custom version.

Congratulations, you've managed to stick to the baseline cost! But you know what's better than DIY? Others doing it for you—for free, up next.

Free Illinois LLC Formation Service

Several online LLC services offer free LLC formation in Illinois. While you’ll still need to pay the required state filing fee, these companies waive their own preparation fees. This helps you launch your business without extra costs.

It's a convenient option if you want to save time, avoid paperwork mistakes, and get peace of mind.

Start Your LLC for $0 - Just Pay State Fees

• Check business name availability
• Lifetime compliance alerts
• Lifetime support via email and phone
• LLC filing + optional tools to build your brand

Get Deal

Form Your LLC at $0 + State Filing Fees

Form your business at $0, just pay the state filing fees, with the Basic package. The Basic package includes:

• Articles of organization
• Name check service
• Digital welcome packet
• Customizable website

Form Your LLC

Starter - $0 + State Filing Fees

• Includes 1 optional free year of Worry-Free Compliance that renews at $199/year
• Standard filing speed
• 100% accuracy guaranteed
• Other services are available with additional costs

Learn More

Let's discuss each option.

Bizee

Bizee's Basic formation package might be a good alternative to DIY. The extra "handholding" comes with zero cost while ensuring your LLC is filed correctly. Plus, it includes a free registered agent for one year—a $100 to $300 value.

What's more, you get a real-time dashboard to track your LLC status. You'll also receive lifetime compliance alerts, so you don't miss deadlines.

If you need more, Bizee offers two paid plans with additional services, like an operating agreement, EIN, and business website.

ZenBusiness

Similar to Bizee, ZenBusiness has a free Starter plan that covers the basic filing of your Illinois LLC formation documents.

Besides checking your LLC name and submitting the Articles of Organization, ZenBusiness offers a safety net with its 100% accuracy guarantee. This gives you extra protection against costly filing errors.

By selecting a free plan and handling some steps yourself, you can take advantage of ZenBusiness' professional support while keeping your total costs low.

Tailor Brands

Tailor Brands offers a Lite plan that includes a generous set of LLC formation services for free, which include:

• Professional preparation and filing of your Articles of Organization
  
• 30-day complimentary trial for invoicing and bookkeeping services
  
• Free business coaching program

With these services, Tailor Brands Lite can provide a solid foundation for your new LLC without the premium price.

Inc Authority

Inc Authority is another LLC formation service with a free plan that's genuinely useful. It stands out with one year of complimentary registered agent services.

This comes in handy during that crucial first year. It lets you focus on building your business without worrying about missing important mail or legal notices.

The free package also includes valuable extras, such as:

• Digital storage for your startup documents
  
• Tax planning consultation to optimize your financial structure
  
• Business credit and funding analysis to support your growth strategy

Feeling like a savvy saver yet? You could use those potential savings after filing your LLC.

Post-LLC Formation Fees

Aside from the filing fee, you may also need to cover additional costs after your LLC is approved.

They vary based on your business type, location, and industry. But these are the most common ones to watch out for:

• Annual report fee: $75/yr
  All Illinois LLCs must file an annual report with the Secretary of State before the first day of their LLC's anniversary month.

  For example, if you registered your LLC on March 7, 2025, you need to submit it by February 28, 2026.

  You have up to 60 days after the due date to file this before you're charged a $100 penalty fee. So, be sure to mark your calendar to avoid missing the deadline.

• Permits & license fees: $0 to $1,000+
  Depending on what your business does or where it's located, you may need to get certain permits, licenses, or certifications to operate legally.

  For instance, Chicago requires a limited business license for general retail sales and services, which costs $250. But if it's a home-based LLC in a small town, you might not need one.

  It can get more expensive if your business sells alcoholic drinks. A liquor license in Illinois can run up to thousands of dollars, depending on the municipality and the type of license required.

  Call this toll-free helpline 800-252-2923 or email ceo.firststop@illinois.gov for guidance. Business specialists will assist you in identifying and navigating regulatory requirements for your business and link you to state and local resources.

• Taxes: from 4.95% state income tax
  LLCs are generally considered "pass-through" entities for tax purposes. This means you'll report the LLC's profits and losses on your personal tax returns. Illinois has a flat income tax rate of 4.95%, but you might have to pay additional federal income taxes based on your income bracket.

  If you sell taxable goods or services, you must also collect and remit Retailers' Occupation Tax (commonly referred to as the state's sales tax). If you hire employees, you need to withhold the 4.95% state income tax from their salaries and remit it to the state.

  Starting in 2025, you can settle your federal taxes via the IRS Direct File platform. After completing your federal return, the system allows you to transfer verified federal tax information directly into MyTax Illinois for your state income tax return filing.
  

Still have questions about Illinois LLCs? Check out some of the answers by clicking the dropdowns below.

FAQS

• How do I maintain an LLC in Illinois?

  Here are things you can do to keep your Illinois LLC in good standing:
  

  • File your Annual Report on time.
    
  • File an LLC Change of Registered Agent and/or Agent's Office Address Change if switching registered agents.
    
  • Update your Articles of Organization and operating agreement to ensure the information's accurate.
    
  • Renew local licenses or permits.
    
  • Pay the correct state and federal taxes.
    
  • Collect and remit Retailers' Occupation Tax and withheld employee tax (if applicable).

• Do you have to register your LLC every year in Illinois?

  In general, LLCs in Illinois stay active indefinitely unless you choose to close it. But if you don't file your annual compliance report, you can lose your good standing and the state can even dissolve your LLC.

  Once dissolved, you can’t legally operate anymore, and your LLC name becomes available for others to claim.
  

  
  

• What is the downside of starting LLC?

  Paying the self-employment tax is a disadvantage of having a limited liability company. As an owner, you pay a 15.3% rate^[3] on top of federal and state income taxes. This could be an added financial burden, especially for small businesses.

• Can a nonresident open an LLC in Illinois?

  Yes, non-residents can form an LLC in state, even if they don't live there. You can start a domestic LLC in the state by filing the required documents. If you already have an LLC formed in another state and want to operate in state, you must register it as a foreign LLC. The processes and costs are pretty much similar to filing a domestic LLC.

• Where is the best place to open an LLC?

  Alaska is the best state to launch and maintain an LLC in terms of having no statewide income and sales taxes. For a friendlier business environment, Delaware boasts favorable business laws, strong privacy protections, and a well-established corporate court system (Delaware Court of Chancery).

• How long does it take for an LLC to be approved in Illinois?

  The Illinois Secretary of State typically takes up to 10 business days to process online LLC applications. This could be longer if you file by mail or deliver the paperwork in person. Meanwhile, you can get the result within 24 hours if you submit the application online and pay an expedited fee of $100.

Bottom Line

You can't start an Illinois LLC for free, but it also doesn't have to break the bank. With DIY and free starter plans from formation services, you can set up your LLC for only $150.

However, it can cost more than that if you need additional services, like tax prep or legal assistance. Remember to allocate enough funds for these extras to avoid going over budget.

References