Is it cheaper to form an LLC in Delaware than Illinois?

Delaware's filing fee is lower ($110 vs $150), but that's not the full picture: operating in Illinois means also registering as a foreign LLC there ($150) and paying a Delaware registered agent. Realistic first-year cost is roughly $410 for the Delaware route versus $150 for forming in Illinois.

Can I form my Illinois business in Delaware?

Yes. Any Illinois business can form its LLC in Delaware. But if the business operates in Illinois, it must also register there as a foreign LLC ($150 filing fee) and maintain a registered agent in Delaware, so you take on two states' fees and filings instead of one.

Does Delaware have better asset protection than Illinois?

Delaware offers more formation privacy. It allows anonymous LLCs while Illinois doesn't. Core asset protection is similar, though: both states provide charging-order protection for LLC members. For most small businesses the practical difference is modest.

State Comparison

Illinois LLC vs Delaware LLC (2026)

Written for owners based in Illinois.

Verdict: for most owners, form where the business is based

Delaware files no annual report, which is why its $400 flat annual LLC tax is so easy to miss. It is owed by every Delaware LLC regardless of income or activity, is not prorated, and turns a $110 formation into $510 in the first year against $225 in Illinois, then $400 a year against $75. Delaware is one of the few states here that keeps members off the public record. An owner based in Illinois still registers the Delaware LLC at home for $150 and files the $75 Illinois report on top.

Based in Delaware? Read Delaware LLC vs Illinois LLC →

Compare Illinois LLC vs Delaware LLC on filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.

By Edmond Hui · Last updated: September 23, 2026

If your business is based in Illinois, an Illinois LLC needs no foreign registration there; a Delaware LLC run from Illinois generally must also register in Illinois as a foreign LLC (Illinois's $150 filing fee). If your business is based in Delaware, a Delaware LLC needs no foreign registration there; an Illinois LLC run from Delaware generally must also register in Delaware as a foreign LLC (Delaware's $200 filing fee). An LLC formed in one of these states and run from the other owes whatever filings, fees and taxes each state requires. An Illinois LLC runs $225 in year one and $75/yr after; a Delaware LLC runs $510 and $400/yr. See the full breakdown below.

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Factor	Illinois	Delaware
Filing Fee	$150	$110
Processing Time	Not published by the state	Not published by the state
Annual Report Fee	$75	None ($400/yr entity tax instead)
Annual Report Due	Before 1st of anniversary month	None required
State Income Tax	Yes	Yes
Anonymous LLC	No	Yes
Publication Requirement	No	No
Foreign LLC Cost (if forming out-of-state)	N/A, you're in your home state	$150 + registered agent ~$150/yr

Full fee breakdown for either state: Illinois LLC cost and Delaware LLC cost. Owner privacy options for either state: Illinois anonymous LLC guide and Delaware anonymous LLC guide.

Business Climate: Illinois vs Delaware

Factor	Illinois	Delaware
5-year business survival rate	55.6% (#3 of 51)	48.1% (#37 of 51)
Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months))	+7.7% YoY (#7 of 51 by volume)	+2.5% YoY (#33 of 51 by volume)

Sources: U.S. Bureau of Labor Statistics, Business Employment Dynamics · U.S. Census Bureau, Business Formation Statistics (BFS)

See the full 50-state survival ranking.

Compare LLC Costs: Illinois vs Delaware

State A

State B

Illinois

✓ Cheaper Long-Term

Formation fee$150

Annual report fee$75

State entity taxNone

Report dueBefore 1st of anniversary month

Processing timeNot published by the state

Late penalty$100

Delaware

✓ Cheaper Upfront

Formation fee$110

Annual report feeNo report required

State entity tax$400/yr, Annual LLC Tax (alternative entity tax)

Report dueNone required

Processing timeNot published by the state

Late penaltyNo report to file late. The annual tax carries its own penalty

Total Cost

Illinois

Delaware

1 Year

$225

$510

3 Years

$375

$1,310

5 Years

$525

$2,110

Will you operate outside your home state?

A figure shown as "from" is the least the state can charge, not a price. Tennessee's report is $300 for up to six members and $50 for each member above six, its franchise tax is the greater of $100 or 0.25% of Tennessee net worth, Wyoming's report is the greater of $60 or $.0002 per dollar of in-state assets, Kentucky's entity tax is $175 up to $3 million of gross receipts and graduated above it, and New York's annual filing fee is graduated on New York source gross income. A total that contains one of those is shown as "from" for the same reason. Costs include every mandatory state charge: the filing fee, the report fee (annualised where a state files biennially), any state entity-level tax shown in its own row above, a one-time publication cost where the state publishes a rate for it, and any one-time registration charge a state requires before the LLC may trade. Two exclusions follow from that wording. Arizona and Nebraska require publication and publish no rate, so no newspaper cost is carried for either and their totals are not the whole cost. Alaska's $50 annual state business licence is a separate charge from the Secretary of State fees and is not carried here either. Annualising makes the 1, 3 and 5 year rows a cost of ownership rather than a payment schedule: a biennial state charges its whole report fee in the years it falls due and nothing in between. Entity-level taxes that only apply after a corporate election, or above an owner or income threshold, are excluded and flagged on the state's own cost page. New York's publication cost is carried at a $250 floor, roughly $200 of newspaper cost in a low-cost county plus the $50 Certificate of Publication fee. No county-clerk-designated New York City newspaper publishes a rate card, so the four-figure NYC estimates in wide circulation cannot be traced to a primary source and are not asserted here; budget for materially more than the floor if you file in a NYC county. Every fee was verified against the state's own fee schedule, statute, or revenue authority on 29 July 2026. Excludes registered agent and legal fees. For informational purposes only, not legal or tax advice.

Filing Fees & Formation Costs

Illinois charges $150 to form an LLC, while Delaware charges $110. Delaware is $40 cheaper upfront. The cost that usually gets overlooked: if you form in Delaware but operate in Illinois, you must also register as a foreign LLC in Illinois (a $150 filing) and maintain a registered agent in Delaware (typically around $150 per year). That puts the realistic first-year cost of the Delaware route at roughly $410, versus $150 for simply forming in Illinois. Speed isn't a basis for choosing between them: neither Illinois nor Delaware publishes a standard processing time, so any figure comparing the two is guesswork.

Taxes: Illinois vs Delaware

Both Illinois and Delaware levy a personal income tax on pass-through business income, and your LLC's profits will be taxed where you live and operate. Forming in Delaware doesn't change what an Illinois-based owner pays. Illinois levies a flat 4.95% personal income tax. Delaware LLCs owe a flat $400 annual LLC tax (no report required).

Privacy & Asset Protection

Delaware allows anonymous LLC formation. Member and manager names don't appear on routine public filings. Delaware's Certificate of Formation requires no member or manager names, and LLCs file no annual report, so ownership never appears on a public filing. Illinois doesn't offer that same privacy. Illinois doesn't permit anonymous LLC formation; management is disclosed on public filings. Both states provide charging-order protection for LLC members, and for most small businesses the practical difference in asset protection between the two is minimal. One important caveat: if you register your Delaware LLC as a foreign LLC in Illinois, that Illinois registration is itself a public record, which can undercut much of the privacy benefit for a business that operates in Illinois.

Annual Maintenance Costs

Illinois LLCs file an annual report ($75, due in the anniversary month), and Delaware LLCs file no annual report at all. If you form in Delaware while operating in Illinois, you maintain filings in both states, Delaware asks for no report, but Illinois still wants its equivalent for your foreign registration, and pay a Delaware registered agent roughly $150 per year. Counting report fees, the agent and any entity-level tax, that brings the Delaware route to roughly $625 a year, versus about $75 to keep a domestic Illinois LLC in good standing. The tax inside those totals: Delaware LLCs owe a flat $400 annual LLC tax (no report required).

When Delaware Actually Makes Sense

Forming in Delaware makes sense in a few specific situations: you need anonymous ownership. Illinois puts owner or manager information on public filings and Delaware doesn't (usually via a holding company, since operating in Illinois still requires a public foreign registration there), you're raising venture capital or institutional investment. Many investors specifically prefer or require Delaware entities, your business genuinely operates in Delaware, with a real office, employees, or property there, or you're relocating to Delaware in the near future. For a typical small business based in Illinois, none of these usually apply. Registering a Delaware LLC to do business back home means $150 in Illinois foreign-registration fees, on top of Delaware's $110 formation fee, while Illinois's own annual report runs $75 a year and is due in the anniversary month. When in doubt, form where you actually do business.

Frequently Asked Questions

: Delaware's filing fee is lower ($110 vs $150), but that's not the full picture: operating in Illinois means also registering as a foreign LLC there ($150) and paying a Delaware registered agent. Realistic first-year cost is roughly $410 for the Delaware route versus $150 for forming in Illinois.
: Yes. Any Illinois business can form its LLC in Delaware. But if the business operates in Illinois, it must also register there as a foreign LLC ($150 filing fee) and maintain a registered agent in Delaware, so you take on two states' fees and filings instead of one.
: Delaware offers more formation privacy. It allows anonymous LLCs while Illinois doesn't. Core asset protection is similar, though: both states provide charging-order protection for LLC members. For most small businesses the practical difference is modest.
: It depends on where the business is based. For an Illinois-based business, Illinois: forming where the business is based keeps costs and compliance simple, and Delaware is worth considering only if you actually do business there, want an anonymous holding company there or have investor requirements that point there. For a Delaware-based business, the same reasoning points to Delaware.
: Speed isn't a basis for choosing between them: neither Illinois nor Delaware publishes a standard processing time, so any figure comparing the two is guesswork. Whichever you pick, remember that forming in Delaware while operating in Illinois means you're not fully set up until the Illinois foreign registration is also processed, so the out-of-state route is rarely the faster path end to end. If your timing is genuinely fixed, buy the state's expedite tier rather than relying on a standard turnaround.

Comparison chart of forming an LLC in Illinois versus Delaware, contrasting filing fees, annual report cost and ongoing obligations across 8 factors. — Illinois and Delaware side by side on the factors that decide where to form. Source: MyStateLLC 50-state cost dataset, verified against each Secretary of State's published fee schedule, July 2026.

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More State Comparisons

Illinois vs Florida →Illinois vs Georgia →Illinois vs Hawaii →Illinois vs Wyoming →Delaware vs Wyoming →

Illinois LLC Guide →Delaware LLC Guide →

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Sources

Each entry below is a document recorded in our verified sources, and each entry says what the document is. Some statutory text is read from an accurate mirror rather than from the state's own host, and those say so.

ilsos.gov/departments/business-services/limited-liability-companies.htmlIllinois Secretary of State: business entity filings
ilga.gov/legislation/ILCS/details?ActName=Limited+Liability+Company+Act.&ActID=2290&ChapterID=65&ChapAct=805+ILCS+180%2F&SeqStart=14450000&SeqEnd=15800000Illinois LLC filing fees
corp.delaware.govDelaware Division of Corporations: business entity filings
corpfiles.delaware.gov/AugustFee2024.pdfDelaware LLC filing fees

Edmond Hui · Founder, MyStateLLC

Edmond Hui is a software engineer and serial entrepreneur based in New York who has founded multiple online businesses across e-commerce, media, and information publishing. Before transitioning into tech, he spent years as a commercial real estate professional closing deals totaling over 100,000 square feet, giving him firsthand experience with business formation and entity structuring. He built MyStateLLC to provide the free, state-specific LLC guidance he wished existed when forming his own companies.