Everything You Need to Know About Illinois Corporations:
Illinois Incorporation Options
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How to Incorporate in Illinois
To start a corporation in Illinois, you’ll need to do three things: appoint a registered agent, choose a name for your business, and file Articles of Incorporation with the Department of Business Services. You can file this document online or by mail. The articles cost a minimum of $175 to file. Once filed with the state, this document formally creates your Illinois corporation.
Per § 805 ILCS 5/5.05 (2019), every Illinois corporation must appoint a registered agent. You don’t need to hire a registered agent, but if you do, make sure your registered agent will list their address on your articles wherever possible to ensure maximum privacy.
If you’re starting a new business, you probably already know what you want to name your corporation. But you’ll need to know if your preferred name is available. To find out, visit https://apps.ilsos.gov/corporatellc/ and search until you find the perfect name for your corporation.
Once you know who your registered agent will be and what your corporation name is, you’re ready to file your Illinois Articles of Incorporation. Follow along with our filing instructions below:
Filing the Illinois Articles of Incorporation
Learn more about each Articles of Incorporation requirement below. Note that the information you provide becomes part of the public record—permanently.
Better yet, skip the form entirely and hire us to incorporate your Illinois business. We provide a free business address to list whenever possible throughout the filing to better keep your personal address private. And for the cheapest way to start a business? Pay just $42 out the door with our VIP monthly payment option.
1. Corporate Name
Your name must include “Corporation,” “Incorporated,” “Limited,” or an abbreviation for one of these words. Tip: Many corporations opt to keep it simple with “Corp” or “Inc.”
2. Registered Agent
For your Illinois registered agent, you can list an individual state resident (like someone in your Illinois corporation) or a business that provides registered agent service (like Northwest). Tip: We recommend Northwest.
3. Registered Office
The registered office is the Illinois street address where your registered agent will be available during business hours to accept legal notifications for your corporation. Tip: When you hire Northwest, our address will go here.
Your articles already list a general purpose, which is sufficient for most corporations. However, some corporations—namely professional corporations—are required to list a specific purpose as well, such as “practicing medicine.” Tip: Just a regular business corporation? You can skip this section.
5. Authorized Shares
List the number of shares you want to create and how many shares you propose to be issued. (You don’t actually issue any shares at this time; you can issue shares at your organizational meeting.) You’ll also need to include the “consideration” (money) to be received in exchange for the shares you plan to issue. Tip: Online filings only permit one class of shares. If you want multiple classes of shares, you’ll need to file a paper form and include the rights and restrictions of each share class.
You’re not required to list the number of directors or the information for any directors or officers in your articles. But if you don’t, the state will weirdly list your incorporator as your corporation’s president. (This can be fixed by filing an amendment.) Tip: Don’t want your incorporator listed as president? Avoid an amendment and list at least one director. Hire us and you can use our business address for your director to better maintain privacy.
7. Estimated Values
This information is also optional. If you want, you can provide estimates for the value of property in and out of the state, and estimates for the amount of gross business that will occur in and out of the state. Note that everything in your articles becomes part of the permanent record of your Illinois corporation. Tip: If you don’t really want to calculate this out (or give your competitors easy access to your financial details right out the gate), you’re free to skip this section.
8. Other Provisions
This is an optional section where you can add provisions of your own. If you want to change the duration of your corporation (how long it lasts) or define policies, such as those for voting or transfers, you can do so in this section. Tip: Many provisions, such as adjustments to voting rights, can be made in your bylaws instead, which are easier to change if needed later on.
9. Illinois Incorporator
Your incorporator is the person who signs and submits your Articles of Incorporation. Incorporators must include their name and address. Your incorporator doesn’t have to be a director, officer, or anyone in the corporation—just a legal adult you authorize to sign and submit your form. Tip: We’ll be your incorporator when you hire Northwest to form your Illinois corporation.
Why Have a Registered Agent Form Your Illinois Corporation?
Professionals in Illinois hire registered agent services like Northwest Registered Agent for incorporation—but why?
Standard filing companies don’t have employees or offices in every state. But as a national registered agent, it’s a requirement for us, which is a benefit for our clients. We own our own building in Springfield, IL. We’re on a first name basis with the people who work in the Department of Business Services. We know all the fastest filing methods, which translates to fast, professional service—without extra fees.
As your registered agent, we list our Springfield registered office address on your corporation’s formation documents. Why? If you’re starting a business from your apartment in Chicago, do you really want your apartment address as your business address? (Hint: the answer is no.) We’ll list our address, so you don’t have to list yours. Plus, we never sell your data. We don’t list your personal information on filings if we don’t have to. It’s all standard and part of our commitment to Privacy by Default®.
Free Mail Forwarding and Business Address
We already accept your legal mail—so why not take it a step further? In every state, we include limited digital mail forwarding for your regular mail too (10 pieces of regular mail a year; $15 a doc after that). Plus, you can list our address as your business address. That means you can have all business mail routed through our office. With both mail forwarding and a business address included, you get a level of security unmatched in the formation industry.
We know the in’s and out’s of each state—and we use this knowledge to help you when you need it most. Our team of Corporate Guides® has over 200 local business experts. You can call or email us for answers to all your questions about your corporation in Illinois. Our Corporate Guides are dedicated solely to helping you with your business—not selling you services or meeting quotas.
What Do I Do After My Illinois Corporation Is Formed?
After your Illinois Articles of Incorporation are approved, you still have a few more important steps to take, including getting an EIN, drafting bylaws, holding your first meeting, opening a bank account, and learning about state reporting and tax requirements.
Get an EIN
Your federal employer identification number (commonly known as an EIN or FEIN) is similar to a social security number for your business. The IRS assigns these numbers and uses them to easily identify individual corporations on tax filings, including federal corporate income tax returns.
Why does my Illinois corporation need an EIN?
The IRS requires corporations to get an EIN for their federal tax filings, and the Illinois Department of Revenue requires an EIN for their business registration. You may also be asked for your EIN when opening a bank account, securing a loan, or applying for local business permits and licenses.
How do I get an EIN for my corporation?
You can get an EIN directly from the IRS. The application is free, and most businesses can apply online. However, if you don’t have a social security number, you’ll need to submit a paper application form. Can’t bear to fill out yet another application? Hire Northwest to get your EIN for you. Just add on EIN service during checkout when you sign up for our incorporation service. Or choose our VIP service—an EIN is included.
Write Corporate Bylaws
Bylaws are the internal rules you set for your business. They put into writing how decisions will be made and who gets to make those decisions. All the major organizational processes and procedures for your corporation will go in your bylaws.
Do I need bylaws for my Illinois corporation?
Yes. State statute §805 ILCS 5/2.20 notes that bylaws shall be adopted either by the shareholders at the first shareholder meeting or by the initial directors at the initial director meeting.
You don’t have to submit bylaws to the state though. Corporate bylaws are internal documents you keep with your other corporate records, such as meeting minutes and resolutions.
What should bylaws include?
Corporate bylaws cover basic policies and procedures for issues such as company finances and management. Bylaws should cover a range of topics, answering key questions like those below:
Meetings: When and where will meetings for shareholders and directors be held? How many attendees are required to transact business? What are the procedures for voting or proxy voting? How do you call a special meeting? What actions can be taken without a meeting?
Stock: How are stock certificates issued and transferred? How is voting affected by issues such as corporate stock owners or fractional shares?
Directors and officers: How many directors must there be? Which officer positions are required? What powers do they have? How do you fill a vacancy or remove a director or officer?
Finances: What are the procedures for retaining profits, issuing dividends, and paying bills? Who can withdraw money from the corporate bank account or sign checks?
Records: Where is the corporate book to be kept? What information will be maintained? How are requests for review or access honored? Can records or copies be kept or distributed digitally?
Amendments and emergencies: Who can amend bylaws and how? Can emergency bylaws be adopted in the case of disaster?
Illinois bylaws can make other provisions as well, assuming additions are in accordance with state law. For example, §805 ILCS 5/2.10 states that Illinois bylaws can authorize or limit preemptive rights (the ability of shareholders to buy future shares before they become available to the public).
How do I write bylaws?
Creating bylaws can be overwhelming—where do you start? Northwest can help. We give you free corporate bylaws when you hire us to form your Illinois corporation. We know what kinds of topics and questions corporations need to address, and we’ve spent years refining and improving our forms. We offer many other free corporate forms as well, including templates for resolutions and meeting minutes.
Hold an Organizational Meeting
An organizational meeting is the first official meeting of the corporation after the business is legally formed with the state. At this meeting, bylaws are adopted, officers are appointed, and any other initial business is conducted. The first meeting minutes should also be recorded and added to your corporate record book.
Are there any special rules for Illinois organizational meetings?
You’re required to give a minimum of three days notice before holding the meeting. Attendees can, however, waive their required notice in writing. The meeting doesn’t have to be held in Illinois.
Open a Corporate Bank Account
Businesses that mix personal and business finances together risk losing their liability protections, so your corporation will need its own bank account. In addition, a corporate bank account is essential for easily accepting payments, paying bills and holding funds.
How do I open a bank account for my Illinois corporation?
To open a corporate bank account in Illinois, you’ll need to bring the following with you to the bank:
A copy of the Illinois corporation’s Articles of Incorporation
The corporation’s bylaws
The corporation’s EIN
If your bylaws don’t specifically assign the power to open a bank account, you may also want to bring a corporate resolution to open a bank account. The resolution would state that the person going to the bank is authorized by the business to open the account in the name of the corporation. At Northwest, we provide free corporate bank resolutions, along with many other free corporate forms, to help you get started fast.
File Illinois Reports & Taxes
In Illinois, corporations file an annual report each year, along with a state franchise tax. In addition, the state has a corporate net income tax and an unusual business tax called a “personal property replacement tax.”
What is the Illinois Annual Report and Franchise Tax?
The Illinois Annual Report and Franchise Tax is a combined filing you must submit each year. The first half of the form is the Annual Report part, so it’s fairly straightforward. You update information on directors, officers and shares. You must also confirm your registered agent and office (but you can’t actually update this information here—that requires a $25 fee and a Statement of Change form).
The second half of the form helps you calculate your franchise tax, which can either be based on paid-in capital (at a rate between 0.1% and 0.15%) or an “allocation factor,” which takes into account your gross assets and revenue.
How much is the Illinois Annual Report and Franchise Tax?
A minimum of $75. The annual report has a flat fee of $75, but you’ll also need to pay however much franchise tax is owed. There is some good news though—the state is phasing out the franchise tax over the next few years. In the meantime, franchise tax exemptions increase each year until the tax goes away in 2024. In 2021, the first $1K is exempt. In 2022, the first $10K is exempt, and in 2023, the first $100K is exempt.
When is the Illinois Annual Report and Franchise Tax due?
The filing is due before the first day of your anniversary month (the month you first incorporated). For example, if you formed your business on April 17th, you’re required to file by March 31st.each year.
These filings can be easy to forget—which is why we send our clients automatic reminders for your Illinois Annual Report and Franchise Tax filings. Or better yet, let us file for you. With our business renewal service, we send you the completed annual report for you to add your tax information, then submit the report for you for $100 plus the state fee and any tax owed.
What should I know about Illinois corporate taxes?
Besides the annual franchise tax discussed above, Illinois corporations have two more major taxes to contend with: a corporate net income tax and a personal property replacement tax.
The corporate income tax rate is a flat 7%. The personal property replacement tax (which weirdly has nothing to do with property) also taxes net income. The rate is 2.5% for standard C corporations and 1.5% for S corporations. Essentially, this means a typical corporation pays a combined 9.5% rate on their net income.
The Illinois sales tax is 6.25%. City, county and specialty sales taxes can be tacked on as well, making the average total sales tax 7.758%.
Do corporations have to register with the Illinois Department Of Revenue?
Yes, if you conduct business in Illinois, you’re required to register with the Illinois Department of Revenue. You can register via MyTaxIllinois or by filing an Illinois Business Registration Application. You’ll need your EIN before you can register.
Illinois Corporation FAQs
How can I submit the Illinois Articles of Incorporation?
You can file Illinois articles online or by mail. Mailed filings must be submitted in duplicate (typed or printed in black ink) to the following address:
Secretary of State
Department of Business Services
501 S Second St, Rm 350
Springfield, IL 62756
How much does it cost to start an Illinois corporation?
At least $175. The base filing fee is $150, but the state’s initial franchise tax is also due upon filing. The tax is $1.50 per $1K of paid-in capital in the state with a minimum tax of $25. If filing online, there’s also a “payment processor fee” of a few dollars.
Hire us for a one-time fee of $405, including the state filing fees and minimum franchise tax fee. Need it expedited? Your total cost is $510 for 1-day filing. Or, pay just $42 out the door with our VIP monthly payment option.
How long does it take to start an Illinois corporation?
24 hours expedited. Have some time and want to save a hundred bucks in extra fees? Forgo expediting and receive your approval in about 10 days.
If you hire Northwest to start your corporation, we file online and typically have your expedited Illinois corporation formed within 24 hours.
Does an Illinois corporation need a business license?
There’s no general, statewide business license required in Illinois, but some cities and counties have local requirements. For example, while Chicago only licenses specific business activities, Evanston requires all businesses to obtain a license and renew it each year.
For some license applications you may need an EIN or a certified copy of your Articles of Incorporation. At Northwest, we can streamline the process and get these for you—simply add on these items during checkout.
What is a foreign Illinois corporation?
A corporation formed outside of Illinois—but which conducts business in the state—is considered a foreign Illinois corporation. For example, if you incorporated in Indiana but decide to open a storefront in Illinois, you would be a foreign Illinois corporation. This also means you would need to register with the state by filing an Application for Authority with the Illinois Secretary of State. Foreign corporations are required to file the Illinois Annual Report and Franchise Tax each year as well.
Can Northwest help me form a nonprofit corporation?
Absolutely! We’re happy to start a nonprofit corporation for you. Note that incorporating an Illinois nonprofit requires a different form. The filing fee is lower as well. Illinois nonprofits do not file the state’s franchise tax but must file an annual report each year ($10).
How to Order Illinois Incorporation Service
Our Illinois incorporation service is designed to be fast and easy—signing up takes just a couple minutes. Here’s how it works:
We offer flexibility with two different options for payment. You can pay everything up front, which includes a full year of registered agent service. Or, pay just $42 out the door with our VIP monthly payment option. With our VIP option, we also include an EIN. Just choose one of the buttons below, answer a few easy questions about your business and submit your payment.
Next, we’ll prepare and submit your Illinois Articles of Incorporation to the Secretary of State, Department of Business Services. In the meantime, you’ll have immediate access to your online account, where you can find useful state forms, pre-populated with your business information.
Once the Illinois Department of Business Services has approved your filing, we notify you that your Illinois corporation has been legally formed. You can now move on to next steps, like holding your organizational meeting and opening a bank account.