Illinois Incorporation

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How to Incorporate in Illinois

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If you’re looking to incorporate in Illinois, you’re in the right place. This guide will help you file formation documents, get tax identification numbers, and set up your company records.


Paperwork Cost Time
  • Form BCA 2.10: Articles of Incorporation - Business Corporations Act
  • Bylaws
  • IRS Form SS-4: Obtain an EIN
  • Form 2553: S-Corp Election, if desired
  • Form REG-1: Illinois Business Registration Application
  • Incorporation: $150 filing fee + franchise tax ($25 minimum) + optional $100 expedite fee. The expedite fee is required if you file online. Franchise tax is calculated as $1.50 per $1,000 on the paid-in capital represented in this state. So if you paid-in less than $16,666, then your franchise tax due is the minimum amount of $25.
  • Incorporation: ~2 weeks by mail or fax. ~1 business days with $100 expedite fee.

How to Incorporate in Illinois

1 Choose a corporate structure

Incorporating means starting a corporation. If you want to form an LLC, please see "How to Form an LLC in Illinois".

Is your corporation for-profit or not-for-profit? If you are starting a nonprofit, please see "How to Start a Non-Profit Organization in Illinois".

Illinois offers several types of for-profit corporations. Most for-profit corporations are formed as Business Corporations and that is the focus of this how-to guide. Special laws govern the formation and regulation of other types of corporations:

  • 805 ILCS §5/ Business Corporation Act of 1983
  • 805 ILCS §5/2A Close Corporations
  • 805 ILCS §10/ Professional Service Corporation Act
  • 805 ILCS §15/ Medical Corporation Act
  • 805 ILCS §30/ Gas Company Property Act
  • 805 ILCS §35/ Illinois Development Credit Corporation Act
  • 805 ILCS §40/ Benefit Corporation Act

C-Corp and S-Corp refer to taxation with the IRS, not to legal structures. Your corporation is taxed as a C-Corp unless you file an election to be taxed as an S-Corp (explained below).

2 Check Name Availability

The legal name of your corporation may not conflict with any other registered name. Check availability of your desired name by conducting a name search.

Name Search:
CyberDrive Illinois Corporation/LLC Search
Name Reservation:
Optional
Suffix:
Shall contain, separate and apart from any other word or abbreviation in such name, the word "corporation", "company", "incorporated", or "limited", or an abbreviation of one of such words 805 ILCS §5/4.05
3 Appoint a Registered Agent

Identify the corporation’s Illinois registered agent. This individual or company receives notice of lawsuit and other legal service for the corporation.

4 File Illinois Articles of Incorporation

File the articles of incorporation to create your corporation.

Agency:Illinois Secretary of State - Business Services Department
Form: ACCESS PREMIUM DATA
Instructions: ACCESS PREMIUM DATA
Filing method: ACCESS PREMIUM DATA
Agency fee:

$150 filing fee + franchise tax ($25 minimum) + optional $100 expedite fee. The expedite fee is required if you file online. Franchise tax is calculated as $1.50 per $1,000 on the paid-in capital represented in this state. So if you paid-in less than $16,666, then your franchise tax due is the minimum amount of $25.

Turnaround: ACCESS PREMIUM DATA
Law:

805 ILCS §180

Notes:
  • When you file by mail you must submit the original articles with signatures in black ink and one copy.
  • When you file online, you may return to the Secretary of State’s Web site after 24 hours and retrieve a copy of the document at no extra charge for a period of 30 days.
5 Establish Bylaws & Corporate Records

Your corporation must keep correct and complete books and records. Corporate records typically include minutes of all meetings of shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation.

Your filed articles of incorporation are the first document for your corporate records. Your corporation will generate many other official records such as bylaws, meeting minutes, and your EIN.

Office supplies intended for a corporation will help you stay organized and save time. Optionally, get a corporate record book, seal, and document templates.

Draft bylaws (potentially using a template) which is the governing document for the corporation. The by-laws may contain any provisions for the regulation and management of the affairs of the corporation not inconsistent with law or the articles of incorporation (805 ILCS §5/2.25). You will review and ratify the bylaws at your first board of directors meeting.

6 Appoint Initial Directors

The initial directors serve on the board until the annual meeting of shareholders (when directors are elected to the board). If the initial directors are not named in the articles of incorporation, they are appointed by the incorporator. The incorporator documents and signs this action for the corporate records.

7 Hold Organizational Meeting

Hold the organizational meeting of the incorporators or initial directors in compliance with 805 ILCS §5/2.20. At least three days written notice must be provided unless those entitles to notice sign a waiver. The meeting may held in or out of Illinois. Keep minutes of this meeting.

The following state laws apply unless overridden by the organizational documents, where permissible.

Directors Officers
  • Number: One or more required.
  • Qualifications: None.
  • Quorum: A majority of directors, or more if stated in the bylaws.
  • As stated in the bylaws. One person may hold multiple offices. One officer is required to be responsible for maintaining corporate records.
8 Issue Stock Certificates

The owners may be issued stock certificates to serve as proof of ownership in the corporation. Remember to hold the first annual meeting of the shareholders (the owners of the corporation) according to bylaws and keep minutes of this meeting.

The following state laws apply unless overridden by the organizational documents, where permissible.

Shareholders Annual Shareholder Meeting
  • Qualifications: N/A
  • Stock Certificate: Not required.
  • Voting Trusts Allowed: Yes.
  • Required: Yes.
  • Action by written consent: Allowed if enough shareholders consent to equal the number required to take action by vote.
9 Get a Federal Employer Identification Number (EIN)

Your corporation must obtain an EIN regardless of whether it will hire employees.

Submit to:
Internal Revenue Service
http://www.irs.gov/
Form:
IRS Form SS-4
Guidance:
IRS Pub 1635: Understanding Your EIN
Filing Method:
Mail, phone, fax, or apply online with the IRS
Fee:
$0
Turnaround:
Immediately online
Notes:
The IRS website is only available during certain hours. Print your EIN before closing your session.
10 Get Illinois State Tax Identification Numbers/Accounts

Illinois offers a consolidated state tax registration application.

Submit to:
Illinois Department of Revenue
http://www.revenue.state.il.us/
Form:
Form REG-1: Illinois Business Registration Application
Filing Method:
Mail or online
Fee:
State fee varies depending on tax accounts needed
11 Consider Electing S-Corp Taxation

By default, your corporation is taxed as a C-Corporation. Some corporations, especially smaller ones, benefit from electing S-Corp tax treatment:

  • C-Corps suffer from double taxation: the corporation pays taxes on profits then members pay taxes on their distributions. If profits exceed $250,000 per owner, you provide employee benefits, or you will re-invest most of your profit in the business, you may benefit from the low tax rates on retained earnings under C-Corp treatment.
  • S-Corp treatment avoids double-taxation. It is generally the best choice for small businesses. To accomplish this, file Form 2553: S-Corp Election with the IRS.
12 Obtain Business Licenses & Permits

To run your business legally, you must obtain applicable licenses and permits. The easiest way to navigate the wide range of federal, state, and local requirements is to search by your business type and locality using the Small Business Administration Business License & Permit look-up tool.

13 Ongoing Filings to Maintain Your Corporation

You must file federal and state tax returns. You must also file:

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