Admit it or not, establishing a company requires more than an impressive business idea. With several registration filings and state requirements needed to operate legally within the state, startup costs aren’t a light matter to consider. In this post, let our trade experts guide you on settling your Illinois LLC annual fees to help you avoid troublesome penalties in the long run.
Formation Costs for an Illinois LLC
Business Name Reservation
When incorporating a business entity, your LLC is required to take on a unique trade name not similar to other entities currently operating in Illinois. If you’re still not keen on doing the legwork and still amidst planning, our team advises you to reserve your LLC business name to the Secretary of State for a $25 fee.
Operating Agreement
One of the crucial formation documents that dictate how your LLC should handle management decisions is the operating agreement. Although curating provisions in this document cost nothing if you do it yourself, our business experts highly recommend seeking professional services to ensure that it will positively affect your company.
Several sites and companies offer assistance for creating a comprehensive operating agreement as part of their LLC formation service packages that vary in different prices.
EIN Registration
To identify your company as an official business entity in Illinois, you must acquire an Employer Identification Number (EIN) or Federal Tax Identification Number [1]. This state requirement is especially needed if your LLC has more than one member and intends to hire more employees in the future.
Getting an EIN from the Internal Revenue System (IRS) doesn’t cost anything, and you can easily apply for it online through their website.
Registered Agent Service
Among the crucial requirements of any state is electing a reliable registered agent to receive important notices and demands from the government. Although hiring a professional service provider isn’t mandatory, dealing with this role is challenging as it keeps your business compliant with state law.
You may find low-cost registered agent services, but the prices may differ in terms of provider industry experience and features. Therefore, our team highly suggests evaluating the company thoroughly before proceeding to purchase any of their packages.
Foreign LLC Registration
If your LLC expands its operations in Illinois, you’ll need to prepare and file “Application for Admission to Transact Business” to the Secretary of State. This procedure comes along with a $150 filing fee. We’d like to note that failing to make this submission could incur you some hefty penalties as a foreign entity.
LLC Formation Service (Optional)
If you intend to focus on operating the business, letting an LLC formation company handle your registration documents and filing procedures is the best solution we can suggest. Not only does it ensure accuracy in the forms, but it also forms your business swiftly with minimal waiting time at the tip of your fingers.
Although expenses could be less than a hundred dollars if you sign up for a basic LLC formation package, additional services like a registered agent and lifetime customer support features could build more expenses.
(You can also opt to hire the top online formation service providers listed here)
Illinois LLC Annual Fees
Annual Report
Upon the formation of your Illinois LLC, you’ll be required to submit a yearly report yearly to the Secretary of State’s office. Failure to comply with this regulation could cost penalties or even result in the administrative dissolution of your business entity.
The due date of this periodic report aligns with the first day of the month your LLC was established and came along with a $75 submission fee. However, you have the option to file earlier than the deadline. Our trade experts highly recommend doing so to avoid the $100 penalty.
If you’re unsure when you have to file, you can check your articles of organization or seek your LLC name on the Illinois website.
Ways to Submit Your Annual Report
Whether you submit your annual report online or via mail, your LLC still needs to pay the $75 filing fee. While using mail courier to send documents to the Secretary of State takes 10-15 days processing, online submissions appear to be more convenient as it’s processed almost immediately.
Other Taxes
One of the most crucial LLC costs or annual fees you must never disregard are the taxes imposed by the state. As per the law, you are obliged to pay for Personal Property Replacement tax, which means your business owes 1.5% of your net income to the Department of Revenue.
If you sell products, you’ll also be tasked to collect and submit periodic sales tax returns. In addition, you may need to consider other annual expenses like use tax, individual income tax, accommodations tax, partnership, LLC tax, local taxes, and more.
To find detailed information about these obligations, you should visit the Illinois Department of Revenue website.
Importance of Submitting Annual LLC Requirements
Every state has its own requirements that each business operating in its jurisdiction must follow. While there are many perks for an LLC in good standing, failure to accomplish your annual obligations could lead to the forced dissolution of your entity. On top of that, you’ll be imposed with penalties before you can reinstate the company. Negligence like these could also be the root of internal disputes that may end up in court battles.
FAQ
Do you have to renew LLC every year in Illinois?
Yes, you have to renew your LLC in Illinois every year. In fact, you’re required to file an annual report on the first day of your business entity’s anniversary month, along with a $75 filing fee. This procedure must be done periodically to maintain your good standing and keep the company operating legally within the state.
How much does it cost to renew an LLC in Illinois?
The cost to renew an LLC in Illinois is $75. Along with the annual report that should be submitted to the office of the Secretary of State. Failure to accomplish these filings could incur your business another $100 penalty fee. To avoid additional expenses, you can file 45 days earlier than the due through online submissions or via mail courier.
Conclusion
After completing all the Illinois LLC annual fees, keep in mind that you’ll need to consistently comply with these requirements for the coming years of your business operation. While our team agrees that you must learn how to handle expenses first-hand, seeking professional advice or assistance from industry experts is a wise move to avoid the risk of non-compliance.
To learn more about the LLC annual fees and costs in other states, you can also visit the pages below:
