How To Start A Nonprofit In Illinois
To start a nonprofit corporation in Illinois, you must file nonprofit articles of incorporation with the Illinois Secretary of State. You can file your articles online, in person, or by mail. The articles of incorporation cost $50 to file plus a payment processing fee of up to $4. Once filed with the state, your articles of incorporation officially create your Illinois nonprofit corporation, but truly preparing a nonprofit to pursue its mission involves several additional steps.
Starting an Illinois Nonprofit Guide:
- Choose your Illinois nonprofit filing option
- File the IL nonprofit articles of incorporation
- Get a Federal EIN from the IRS
- Adopt your nonprofit’s bylaws
- Apply for federal and/or state tax exemptions
- Register for required state licenses
- Open a bank account for your IL nonprofit
- File the Illinois nonprofit annual report
Illinois Nonprofit Filing Options
Free PDF Download
Download the Illinois nonprofit articles of incorporation. Fill out the form and submit to the state.
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IL Nonprofit Articles of Incorporation Requirements
To incorporate an Illinois nonprofit, you must complete and file nonprofit articles of incorporation with the Illinois Secretary of State. See the document below and click on any number to see what information is required in the corresponding section.
Your nonprofit’s name needs to clearly differ from any existing business entity operating in Illinois, and it can’t contain words indicating established political parties (for example, “democratic,” “democrat,” and “republican”). You can do a name search at the Illinois Secretary of State’s website. An optional 90-day name reservation is available for a $25 fee.
Your registered agent needs to be a natural individual (such as yourself or a willing associate) or a business authorized to provide registered agent service. In either case, the agent needs an office with a street address in Illinois to receive services of process. When you hire Northwest, our name and Illinois street address go here.
Illinois has some pretty specific guidelines for how to describe your nonprofit’s purpose. You must select from one of 33 allowable purposes (“charitable,” “eleemosynary,” “athletic,” etc.), which you can read through on the Illinois Secretary of State’s website, and you’ll also provide a more detailed description of your nonprofit’s purpose to supplement the selected category. Moreover, if you intend to apply for federal tax-exempt status with the IRS, keep in mind that some of Illinois’s allowable purposes won’t qualify as exempt purposes in the eyes of the IRS. Check out our guided to understanding the IRS 501(c)(3) requirements to see the specific tax-exempt language required by the IRS.
Illinois requires your nonprofit to have at least 3 directors. Your directors don’t have to be residents of Illinois or members of your nonprofit unless you craft your bylaws or additional provisions to include requirements of this kind.
You may also include additional, optional provisions that govern your nonprofit, including descriptions of your directors’ and officers’ duties (some of this material, however, may appear in your bylaws instead). More importantly, if you intend to apply for 501(c)(3) tax-exempt status, you should include a statement of purpose and a description of your nonprofit’s procedures for preventing individual enrichment if and when your nonprofit dissolves (often called a “dissolution clause”). If your Articles include additional provisions, you will need to print and mail in a paper form instead of filing online.
Include the name and address of at least one incorporator. An incorporator is simply the person who signs and submits your articles of incorporation, and it doesn’t need to be a director, officer, or member of your nonprofit. When you hire Northwest to form your nonprofit, we will be your incorporator.
How Much Does It Cost to Incorporate an Illinois Nonprofit?
Illinois charges $50 for the Secretary of State’s routine filing time (around 10 days), plus a payment processing fee of up to $4. You can also pay an extra $25 for expedited, 24-hour service.
How Long Does It Take to Start an Illinois Nonprofit?
Standard processing for an Illinois nonprofit is around 10 days. If you file online or in-person and pay a $25 expedite fee, however, you can get your articles of incorporation processed in one business day.
Does an Illinois Nonprofit Need a Registered Agent?
Yes, your nonprofit is required to appoint an Illinois registered agent. You can do the job yourself, appoint a willing associate, or hire an authorized business that provides registered agent service (like Northwest). We recommend hiring a registered agent service.
Why? Because your registered agent has to be available during normal business hours to receive services of process, which isn’t an easy job for an individual human being. If you take on the job yourself, you can’t get bogged down in lengthy business meetings, travel to meet with potential donors, take vacations, or do much of anything, really, that takes you away from your nonprofit’s registered office. The address you list also goes into the public record, so you will most likely deal with a lot of junk mail, spam, and unwanted solicitors.
When you hire Northwest, however, our Illinois address replaces yours, and we will always scan services of process and send them to you on the day we receive them. We help you protect your privacy, keep your organization in good standing with the state, and free you up to manage your nonprofit’s vision on your own terms.
Get a Federal Employer Identification Number (EIN)
You will need a federal employment identification number (FEIN or EIN) if you want to apply for a bank account in your nonprofit’s name and apply for federal and/or state tax exemptions. After the Illinois Secretary of State approves your articles, you can apply for an EIN on the IRS website. You can also add our EIN service for an additional fee when you hire Northwest.
Hold Your Organizational Meeting & Adopt Bylaws
Illinois requires your nonprofit’s board of directors to adopt bylaws at your organizational meeting. You don’t need to submit your bylaws to the state (and the state wouldn’t accept them if you did), but that hardly matters. Even if your nonprofit wasn’t required to write and adopt bylaws, you would want to do so. No ambitious and successful nonprofit can function well without its directors, officers, and members knowing who has power over what, who speaks for the organization, how long an officer’s term lasts, who gets to vote on resolutions, and so on. Bylaws are all about self-control. They are the agreement your nonprofit makes with itself.
It isn’t easy to write bylaws, of course, but Northwest is here to help. When you hire Northwest to form your nonprofit, you will gain access to our template for writing bylaws, as well as numerous free nonprofit forms to help you form and manage your new nonprofit. Why? Because we want to do business with you for years to come, and your nonprofit needs to be successful for that to happen. At Northwest, we understand that, in the end, our clients’ success is our success.
Apply for Federal and/or State Tax Exemptions
Will My Illinois Nonprofit Be Tax Exempt?
Not immediately. First, you need to get the IRS to recognize your nonprofit as a tax-exempt organization, and that takes more than a little time and effort. You’ll submit the detailed Application for Recognition of Exemption to the IRS, pay a hefty filing fee, and wait around 3-6 months while the IRS examines your organization and makes its decision. If your nonprofit intends to seek 501(c)(3) tax-exempt status for public charities and private foundations, be sure your Articles of Incorporation include the special language required by the IRS that dedicates your activities exclusively to the pursuit of one or more tax-exempt purposes.
If your nonprofit obtains federal tax-exempt status, it’s then automatically exempt from the Illinois state income tax. To get an Illinois sales tax exemption, however, you’ll need to file Form STAX-1 (the Application for Sales Tax Exemption) to the Illinois Department of Revenue. Learn more at Northwest’s guide to Illinois state tax exemptions.
Register For Illinois State Licenses
Does an Illinois nonprofit need a business license?
Illinois doesn’t require a statewide business license, but some cities and counties have licensing requirements of their own. It’s best to contact your city and county clerks and research your local requirements before conducting business in Illinois.
Does an Illinois nonprofit need a state tax ID?
Your nonprofit should register for a state taxpayer ID with the Illinois Department of Revenue before hiring any employees or making any purchases or sales (basically, before doing business of any kind). You can register by submitting a Business Registration Application (REG-1) online at the MyTax Illinois website or by sending your printed application to:
Central Registration Division
Illinois Department of Revenue
PO Box 19030
Springfield, IL 62794-9030
Should my Illinois nonprofit register as a charity?
If your nonprofit will collect donations, you will need to register as an Illinois charity with the Illinois Attorney General. There is a $15 registration fee, and an additional $15 fee each year when you submit your Charitable Organization Annual Report (Form AG0990-IL), not to be confused with the annual report you will submit each year to the Illinois Secretary of State! The charitable annual report’s deadline is 6 months after the close of your nonprofit’s fiscal year. If your nonprofit is a religious charity, however, it may be exempt from the annual reporting requirement and fee.
Whatever you do, make sure to register before soliciting donations in Illinois, and always submit your charitable annual report on time. The Illinois Attorney General charges a $200 fee if you solicit contributions prior to registration and a $200 re-registration fee for nonprofits that don’t file annual reports by the deadline.
Open a Bank Account for Your Illinois Nonprofit
To open a bank account for your Illinois nonprofit, you will need to bring the following items with you to the bank:
- A copy of your Illinois nonprofit articles of incorporation
- A copy of your nonprofit’s bylaws
- Your Illinois nonprofit’s EIN
It’s wise to call your bank ahead of time to check its requirements. Some banks may require you to bring a resolution authorizing you to open a bank account in your nonprofit’s name (particularly if your nonprofit has several directors and/or officers).
File the Illinois Nonprofit Annual Report
What is the Illinois nonprofit annual report?
The Illinois annual report updates (or confirms) your nonprofit’s information as it appears on the state’s records, including your nonprofit’s name and registered agent information (among other details). There is a $10 filing fee for nonprofits, and you can file online at the Illinois Secretary of State’s website or by mail. The deadline is always prior to the first day of the anniversary month of your nonprofit’s incorporation with the state.
Hire Northwest, and we’ll remind you when your annual report’s deadline approaches, but you can also sign up for our Illinois Annual Report Service and leave the entire process to us.