Illinois LLC vs Delaware LLC (2026)
Compare Illinois LLC vs Delaware LLC — filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.
| Factor | Illinois | Delaware |
|---|---|---|
| Filing Fee | $150 | $90 |
| Processing Time | 10 day(s) | 7 day(s) |
| Annual Report Fee | $75 | $300 |
| Annual Report Due | Anniversary month | June 1 |
| State Income Tax | Yes | No |
| 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 |
Verdict: Illinois wins for most businesses
For most Illinois-based small businesses, forming locally in Illinois is the better choice since Delaware's benefits don't outweigh the extra costs of foreign registration and higher annual fees. Delaware only makes sense if you need anonymous ownership or have specific investor requirements.
Filing Fees & Formation Costs
While Delaware's $90 filing fee is $60 lower than Illinois' $150, this advantage disappears quickly for Illinois businesses. If you form in Delaware but operate in Illinois, you must register as a foreign LLC in Illinois, which costs around $150. You'll also need a Delaware registered agent service costing $100-200 annually. The total first-year cost for a Delaware LLC operating in Illinois is typically $340-440, compared to just $150 for an Illinois LLC.
Taxes: Illinois vs Delaware
Delaware has no state income tax for LLCs, while Illinois imposes a personal income tax that LLC profits pass through to. However, this tax difference is often overstated since you'll pay Illinois taxes on Illinois business income regardless of where you form. Delaware does charge a $300 annual franchise tax, which is significantly higher than Illinois' $75 annual report fee. For most small businesses, the higher Delaware franchise tax offsets any potential tax savings.
Privacy & Asset Protection
Delaware allows anonymous LLC ownership since it doesn't require member names in public filings, while Illinois requires member or manager names to be disclosed. Both states offer similar asset protection through charging order protections. Delaware's court system is business-friendly with specialized business courts, but for typical small business disputes, this advantage is rarely meaningful. The privacy benefit is Delaware's main advantage, but it comes at a significant cost premium.
Annual Maintenance Costs
Illinois LLCs pay just $75 annually for their report, due in the anniversary month of formation. Delaware charges $300 for its annual franchise tax, plus $100-200 for mandatory registered agent services. An Illinois business operating through a Delaware LLC faces total annual costs of $400-500 in Delaware, plus potential Illinois foreign LLC fees. Over five years, choosing Delaware over Illinois typically costs an extra $1,500-2,000 with no operational benefits for most businesses.
When Delaware Actually Makes Sense
Delaware becomes worthwhile for Illinois businesses in specific situations: when you need anonymous ownership for privacy or security reasons, when raising venture capital from investors who prefer Delaware entities, or when planning complex multi-state operations. Large corporations often choose Delaware for its specialized business courts and predictable corporate law. For single-member LLCs or small partnerships operating primarily in Illinois, the extra costs rarely justify Delaware's benefits.