For Illinois freelancers, consultants, and tradespeople

Starting a one-person business in Illinois?

Plain answers on sole proprietorships and single-member LLCs: what to file, what it costs, and what people commonly miss.

Three common starting points

No state filing and the least paperwork, but you're personally liable.

$150 to form and $75 a year, with liability separation. Taxed like a sole prop by default.

Salary plus payroll can lower self-employment tax at higher profit, with more admin.

Quick start

The usual order of operations for a solo business in Illinois.

1Decide on a structure: sole proprietorship or single-member LLC.
2Check your name in the Secretary of State business entity search.
3If you use a name other than your own as a sole proprietor, file a county assumed name (and publish it).
4For an LLC, pick a registered agent with an Illinois street address.
5For an LLC, file Form LLC-5.5 ($150).
6Get a free EIN from the IRS.
7Sign a single-member operating agreement (LLCs).
8Open a separate business bank account.
9Check city licenses and home-occupation rules.
10Set up quarterly estimated taxes and, for an LLC, calendar the $75 annual report.

$150

LLC filing (Form LLC-5.5)

$75

LLC annual report, every year

State filing for a sole proprietorship

Do I need to register anything to be a sole proprietor in Illinois?: There is no state formation filing for a sole proprietorship, so the state cost is $0. If you use a business name other than your own legal name, you file an assumed name (DBA) with your county.
Is a single-member LLC taxed differently from a sole proprietorship?: Not by default. A single-member LLC is a disregarded entity, so you report profit on Schedule C and pay self-employment tax just like a sole proprietor.
How much does it cost to form an LLC in Illinois?: Filing Articles of Organization (Form LLC-5.5) costs $150, online or by mail. Expedited review is $100 extra.
Should I form my LLC in Wyoming or Delaware to save money?: Usually not. An Illinois resident doing business here must also register the LLC in Illinois as a foreign LLC for $150, so you pay both states.
When is the annual report due?: Before the first day of your LLC's anniversary month. You can file during the 60-day window before that date.
Do I need to pay quarterly estimated taxes?: Usually yes once you have self-employment profit, since no employer is withholding for you. Missing them is one of the most common mistakes.

Answer five questions to get a starting point, or ask for help from a local professional.

General information, not legal or tax advice.