The Illinois Limited Liability Company Act (805 ILCS 180) is the state law that lets one or more people form a limited liability company, or LLC, and sets the yearly paperwork that keeps it in good standing. The Illinois Secretary of State's Department of Business Services takes the filings. This page is for small business owners, freelancers and founders who want it explained in plain words.
Who is covered
| Question | Answer | Section |
|---|---|---|
| Who can organize an LLC? | One or more persons, other than natural persons under 18; organizers need not be members | 5-1(a) |
| How many members? | At least one; a single-member LLC is allowed | 5-1(b) |
| What can the business do? | Any lawful purpose except insurance, with a narrow exception | 1-25(a) |
| Personal liability | Being a member or manager does not alone make someone liable for company debts, unless the articles say so and that member agrees in writing; each stays liable under other law for his or her own wrongful acts | 10-10 |
| Licensed professions | Services licensed by the state's professional regulator (IDFPR) call for a professional LLC under a separate act, registered with IDFPR | 1-25(d), 1-28 |
| Series LLC | Separate "series" of interests inside one company; allowed, with articles at $400 (2026) | 37-40, 50-10 |
| LLC formed elsewhere | Applies for admission to do business in Illinois; fee $150 (2026) | 50-10 |
How it touches your taxes and payroll
Federal tax follows the owner count and any election, not the Illinois label. A domestic LLC with two or more members is a partnership for federal income tax unless it files Form 8832 to be taxed as a corporation. A single-member LLC is treated as part of its owner's return for income tax unless it elects corporate status, yet it is still a separate entity for employment tax. See our LLC tax classification guide and payroll tax basics.
In 2026 Illinois charges partnerships and S corporations, including LLCs taxed that way, a 1.5% replacement tax. An LLC taxed as a C corporation owes 7% income tax plus 2.5% replacement tax; see the Illinois Income Tax Act. The LLC Act's fee list has no franchise tax, which sits in the Business Corporation Act.
Next, read the rules and numbers and the checklist and FAQs, which packages the yearly steps as the Blue-Folder Standing Check. To compare structures, see the entity selection guide, the Illinois partnership act, our business formation service and the Illinois state guide.
Official sources
- Illinois General Assembly: Limited Liability Company Act (805 ILCS 180)
- Illinois Secretary of State: Limited liability companies
- IRS: Limited liability company (LLC)
This page is a plain-language summary. The official source controls if there is any difference.