Forming an LLC in IllinoisForming an Illinois LLC
The limited liability company (LLC) is one of the most common business forms for E-2 investors in the United States: formation is relatively simple, members are in principle liable only up to their contributions, and internal management can be arranged flexibly through the operating agreement. Illinois LLCs are governed by the Illinois Limited Liability Company Act (805 ILCS 180), and formation documents are filed with the Illinois Secretary of State.
This article focuses on Illinois. If your company is formed in another state, the rules on names, registered agents, annual reports and taxes are different and must be handled by a local lawyer or registered agent.
Step one: the company name
Under 805 ILCS 180/1-10:
- The name must contain the words “limited liability company,” “L.L.C.” or “LLC”;
- It may not contain words such as “Corporation,” “Corp.,” “Incorporated,” “Inc.,” “Ltd.,” “Co.,” “Limited Partnership” or “L.P.”;
- It may not state or imply that the company conducts a corporate fiduciary business; words such as “trust,” “trustee” and “fiduciary” may be used only after completing the relevant procedures under the Corporate Fiduciary Act;
- The name must be “distinguishable” from existing LLCs, foreign LLCs, reserved names, registered assumed names and the like in the Secretary of State’s records; merely adding or removing “limited,” “company,” articles, conjunctions or changing singular and plural is not enough to make it distinguishable.
Name reservation: Under 805 ILCS 180/1-15, a person intending to form an LLC may apply to the Secretary of State to reserve a name for 90 days (or until it is surrendered earlier), and the reservation may be transferred to another person by filing a notice of transfer with the Secretary of State. When the investor is still abroad and the E-2 plan is not yet final, reserving the name lets you lock it in first.
Approval of a name for registration only means there is no conflict in the Secretary of State’s records; it does not mean the name does not infringe someone else’s trademark. If you plan to build a brand, a chain or an online store, we recommend a separate trademark search.
Registered agent and registered office
805 ILCS 180/1-35 requires every LLC to continuously maintain a registered agent and a registered office in Illinois. The registered agent can be an individual resident of Illinois or a corporation or other entity authorized to do business in the state. The registered agent is responsible for receiving court summonses, litigation documents and formal notices from the state.
- An investor who does not live in Illinois cannot serve as their own registered agent and usually engages a professional registered agent service or a law firm;
- A registered agent may resign, with advance notice to the company and a filing with the Secretary of State; after the resignation, the company must designate a new registered agent within the statutory period (60 days);
- Changes in the registered agent or address must be filed with the Secretary of State promptly. Missing litigation documents can lead to a default judgment against the company, which is a risk to an E-2 business’s operations and renewals.
Articles of Organization (Form LLC-5.5)
An LLC is formed by filing Articles of Organization with the Secretary of State; the Secretary of State’s form number is LLC-5.5, and filing methods are as stated on the Secretary of State’s website. Under 805 ILCS 180/5-5, the Articles of Organization must state:
| Item | Notes | Note for E-2 investors |
|---|---|---|
| Name and principal place of business | The principal place of business need not be in Illinois; the Secretary of State’s form asks for the address where company records are kept and does not accept a P.O. box alone or a “c/o” address | If the investor has not yet come to the United States, plan in advance what address to use, so it is not inconsistent with the later lease and bank records |
| Purpose | Can be stated as “any lawful business” | The actual business in the visa materials should match the business plan |
| Registered agent and registered office | Must be in Illinois | See the previous section |
| Confirmation of members | Confirms that the company has one or more members at the time it takes effect | The member list is not made public in the articles; evidence of ownership relies on the operating agreement and member register |
| Managers and members with management authority | List names and business addresses | The principal E-2 applicant should usually be listed, reflecting their operational control |
| Duration | Perpetual unless otherwise stated | — |
| Organizers | Name and address of each organizer | An organizer can be a lawyer or agent and is not the same as a member |
The articles may also include other provisions, not inconsistent with law, governing the company’s internal affairs. Under 805 ILCS 180/5-1, one or more persons (other than individuals under 18) may form an LLC; a “person” under the law includes individuals, corporations, partnerships, trusts and so on. Government fees are as currently listed on the Secretary of State’s website.
Member-managed or manager-managed
Under 805 ILCS 180/15-1, an LLC is member-managed by default, unless the operating agreement expressly provides that the company is manager-managed or uses similar wording.
- Member-managed: Each member has equal rights in managing the company’s business; ordinary matters are decided by a majority of the members, and major matters specified by statute require the consent of all members;
- Manager-managed: The business is run by managers, who are chosen and removed by a majority of the members.
For E-2, this choice bears directly on the requirement to “develop and direct” the business. An investor with 50% ownership usually shows control through ownership; one with less than 50% must have operational control through a managerial position or other corporate arrangement. For how to write the operating agreement, see Operating agreements.
Can foreign nationals be members and managers?
Yes. 805 ILCS 180 has no nationality or residence requirement for members, managers or organizers, and foreign individuals or foreign companies may hold interests in an Illinois LLC. But two things should be distinguished:
- Owning the company does not require U.S. status;
- Working for the company in the United States (including personally running and managing it) requires lawful work status, such as the E-2 visa itself. Before the visa is approved, an investor without work status can generally only make decisions as an owner from outside the United States, with day-to-day matters carried out by people who have work status.
Annual reports and good standing
Under 805 ILCS 180/50-1, an LLC must file an annual report with the Secretary of State each year within the 60 days before the first day of its “anniversary month” (the month it was formed) and pay the required fee. The annual report includes the company’s name, registered agent and registered office, principal place of business, and the names and business addresses of managers and members with management authority. The Secretary of State may adjust filing methods and deadlines; rely on the notices you receive and the current statute.
A company that fails to file on time is delinquent and loses good standing (805 ILCS 180/50-15), and late fees accrue; if the delinquency continues uncorrected, the Secretary of State may administratively dissolve the company. A dissolved company can apply for reinstatement, but in the meantime its contracts, banking and litigation may be affected.
A Certificate of Good Standing is issued by the Secretary of State and certifies that the company legally exists and has filed its annual reports and paid its fees on time. It is often requested when opening a bank account, signing a commercial lease, taking out a loan or renewing an E-2; we recommend obtaining a recent copy before filing your visa materials.
Series LLCs: principles only
Illinois permits series LLCs (805 ILCS 180/37-40): several “series” can be established under one LLC, with each series’ assets and liabilities separated from the others. To obtain this separation, the operating agreement must provide for it, the parent company’s Articles of Organization must include notice of the limitation of liability, each series must file a certificate of designation with the Secretary of State, and each series’ assets and records must be kept and accounted for separately. A series name must begin with the parent company’s full name.
Recognition of series LLCs by other states, banks and courts is not uniform, and the bookkeeping demands are high. An E-2 application is generally reviewed on the basis of one genuinely operating business, and a series structure increases the cost of explaining it. Unless there is a clear business reason, E-2 investors usually do not need a series LLC.
Doing business in other states: foreign qualification
An LLC formed in Illinois that opens a store, hires employees or holds business premises in another state usually must register there (foreign qualification), and vice versa. Under 805 ILCS 180/45-45, a foreign LLC doing business in Illinois without registering cannot bring a lawsuit in Illinois courts until it registers and must pay back fees and penalties, but the validity of its contracts is not affected.
A common problem: forming the company in Delaware or Wyoming while actually opening a store in Chicago. Registrations, agents and annual reports then have to be maintained in both places. We generally recommend that an E-2 business be formed in the state where it actually operates. Registration rules in other states must be handled by a local lawyer or registered agent.
Current status of FinCEN beneficial ownership information (BOI)
The Corporate Transparency Act originally required most small companies to report beneficial ownership information to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). In March 2025, FinCEN issued an interim final rule exempting companies formed in the United States; on August 11, 2026, FinCEN issued a final rule making this exemption permanent effective August 14, 2026. As of this article’s latest update, an LLC formed in Illinois does not need to report BOI to FinCEN, even if all of its members are foreign nationals. Those that must still report are mainly foreign entities registered to do business in the United States. Check the current rules published on the FinCEN website.
LLC or corporation: tax principles
- Default classification: A single-member LLC is by default a “disregarded entity” under federal tax law, and a multi-member LLC is by default a partnership; it can elect on Form 8832 to be taxed as a corporation, and after the election generally cannot change again for 60 months;
- S corporation restrictions: An S corporation may not have nonresident alien shareholders, may have no more than 100 shareholders, and may have only one class of stock. An E-2 investor who holds a foreign passport and is not a U.S. tax resident generally cannot elect S corporation status;
- Foreign-owned single-member LLCs: These are treated as corporations for purposes of Form 5472; “reportable transactions” with the foreign owner, such as contributions, loans and payments, must be reported on Form 5472 attached to a pro forma Form 1120, and the penalties for failing to file are severe;
- For when an investor becomes a U.S. tax resident and whether foreign accounts must be reported, see Tax residency and Reporting foreign assets.
Our firm does not provide individualized tax advice. Before choosing the entity type and tax classification, please evaluate them with an accountant; for more, see the tax section.
How it fits with E-2
The U.S. Department of State’s Foreign Affairs Manual, 9 FAM 402.9, sets out the E-2 review standards, and several of them bear directly on how the LLC is formed and how its documents are prepared:
- The business’s nationality follows its owners: A business’s nationality is determined by the nationality of its owners, regardless of which state it was formed in; nationals of the treaty country must own at least 50% of the business;
- Develop and direct: Usually shown by the applicant’s ownership of at least 50%, or by operational control through a managerial position or similar arrangement;
- A real operating enterprise: It cannot be a “paper company” or an idle speculative investment. Merely registering an LLC and opening an account, without premises, contracts or operating arrangements, does not amount to an actual investment;
- Funds at risk and irrevocably committed: Money sitting in the company account that can be withdrawn at any time is generally not enough; a transaction conditioned on visa approval can be handled by placing the funds in escrow; see Commercial leases;
- Non-marginality: The business must be able to generate income beyond what is needed to provide a minimal living for the investor and family, or make a real contribution to the U.S. economy, usually within five years.
An LLC has no stock certificates, so the evidence of ownership in visa materials usually includes: the Articles of Organization stamped by the Secretary of State, a fully signed operating agreement, a member register or proof of interests, transfer records for contributions, the EIN confirmation letter, a Certificate of Good Standing, business licenses and the lease. The ownership percentages, choice of managers and contribution amounts in these documents must be consistent with one another and with the DS-156E and the business plan.
Self-check list
Common misconceptions
- “Once I register a company, I can get an E-2”: Registration is only the first step; the visa looks at actual investment and genuine operations;
- “Just register in any state with no state income tax”: Forming in another state and operating in Illinois often means registrations and annual reports in both;
- “An online template operating agreement is enough”: Templates usually do not address E-2 control, contribution and exit arrangements;
- “Husband and wife at 50% each is fine”: Whether combined ownership counts toward treaty nationality depends on each spouse’s own nationality;
- “After formation there is nothing more to do”: Annual reports, registered agent changes and tax filings must be kept up, or the company may lose good standing.
What we can do
- Determine the entity type, ownership and management structure in light of your E-2 plan;
- Handle name reservation, Articles of Organization and registered agent arrangements for an Illinois LLC;
- Draft an operating agreement suited to E-2, and review the commercial lease or purchase contract;
- Organize the company documents into visa evidence that ties in with the DS-156E and the business plan;
- Coordinate tax classification and filings with your accountant; registrations in other states are handled by a local lawyer or registered agent.
Frequently asked questions
I am overseas. Can I form an Illinois LLC remotely?
Yes. The Articles of Organization can be filed by a lawyer or agent acting as organizer, and the investor does not need to be present. You will, however, need to engage an Illinois registered agent, and when you later open a bank account, the bank usually has its own identity verification requirements, which differ from bank to bank.
Do the Articles of Organization show who the owners are?
Illinois Articles of Organization list only the managers and members with management authority and do not require all members to be listed. The full ownership is recorded in the operating agreement and member register, which are also core evidence in an E-2 application.
Do I have to use an LLC for E-2?
Not necessarily. 9 FAM 402.9 looks at ownership, control and investment, not the business form; a corporation, partnership or other form also works. Whether to choose an LLC or a corporation depends mainly on taxes, future financing and arrangements with other owners.
Can I go into business with a friend who is not a treaty national?
You can be partners, but treaty nationals together must own at least 50%, and the principal applicant must also be able to show control of the business. Arrangements such as a 50/50 split must clearly set out management rights and deadlock resolution in the operating agreement.
The company has not opened yet. Do I still have to file the annual report?
Yes. The annual report obligation does not depend on whether the business has started operating; as long as the company exists, it must file on time every year.
My foreign-owned single-member LLC has no income. Do I still need to file taxes?
Possibly. Even with no income, a foreign-owned single-member LLC may need to file Form 5472 if it has reportable transactions with its owner, such as contributions. Please confirm with an accountant.
Official sources
- Illinois Limited Liability Company Act, 805 ILCS 180 (full text)
- 805 ILCS 180/1-10 (name requirements)
- 805 ILCS 180/5-5 (contents of Articles of Organization)
- Illinois Secretary of State: Business Services (forms, annual reports, good standing)
- IRS: Instructions for Form 5472
- IRS: Instructions for Form 2553 (S corporation election)
- FinCEN: Beneficial ownership information reporting
- U.S. Department of State, 9 FAM 402.9 (E-1/E-2 treaty visas)
Related reading
- Operating agreements: key clauses and E-2 considerations
- EIN, bank accounts and tax registration
- Commercial lease essentials
- E-2 investor visa hub
- E-2 business plans
Planning to form a company in Illinois in preparation for E-2? We can plan the company formation, operating agreement, lease and visa application together. Book an attorney evaluation, or call (312) 519-1115.
This page is general information, not legal or tax advice. Company formation and commercial leases are governed by state law and the rules differ by state; government fees and forms are as currently published by the Secretary of State, the IRS and other official sources; visa outcomes are decided by the U.S. Department of State and immigration agencies and depend on the specific facts. Our firm advises on Illinois, New York and Massachusetts law.