The name you choose for your new Illinois Corporation must be different from all other registered and reserved Illinois business entities. Like other states, Illinois state law mandates the use of some words and phrases, but restricts the use of others when it comes to business names.
For instance, your new corporation’s name must include one of the following words or their abbreviation at its end, or equivalent terms in another language: “Corporation,” “Incorporated,” “Company,” or “Limited.” It also must contain the word “trust”, “pawners,” or “cooperative” if the corporation is conducting these types of business.
The name must be made up of letters or symbols which the secretary of state’s office can reproduce, and it must be the name under which the corporation will conduct business, unless it has selected an assumed name (“doing business as”) in compliance with Illinois law. Assumed corporate names must be periodically renewed with the secretary of state’s office.
Additionally, your new Illinois corporation’s name must not contain terms that state or imply that the corporation is authorized to conduct business in insurance, assurance, indemnity, savings deposits, banking, or as a corporate fiduciary, unless it has been so authorized by the proper state agency.
Available corporate names can be reserved with the state for up to 90 days for $25
State Incorporation Timelines
The 1 timeline of incorporations in Illinois and can be expedited in 1 business day.
State Incorporation Filing Fees
The filing fee is $281, and can be expedited by paying an additional $40.
Articles of Incorporation
Illinois state law requires that a new corporation’s articles of incorporation be filed with the state Secretary of State, before conducting the business. The articles must be signed by at least one incorporator, who can be either a natural person at least 18 years old or a corporation. The incorporator delivers the articles of incorporation to the Secretary of State’s office, and also establishes the number of initial directors in either the articles or at the organizational meeting. The articles must include:
- The incorporators’ names and addresses
- The corporate purpose-but, since Illinois allows a corporation to be formed for any legal business activity, this can be a general business purpose
- The number of shares of each class of stock the corporation is authorized to issue
- The number of shares proposed to be issued, as well as the consideration or payment to be received for such shares
Unlike some other states, Illinois does not require the names of the corporation’s initial directors to be listed in the articles of incorporation.
Unless stated otherwise, the state assumes that 100 percent of the corporation’s paid-in capital (the amounts paid by shareholders for their initial shares) is located within Illinois; this is frequently the situation for most small, newly-formed corporations. This means that your corporation’s state franchise tax will be calculated on the basis of the corporation’s entire paid-in capital. A tax professional can tell you if you should allocate property and business outside Illinois, and thereby reduce your Illinois franchise tax.
Additional provisions may also be included in the articles, such as:
- Additional qualifications for directors
- Specific provisions to regulate the corporation’s internal affairs
- Voting majority requirements
- An estimate of the value of all property to be owned by the corporation in the following year, both in and out of Illinois
There is a minimum $175 fee-a $150 filing fee and a minimum $25 franchise tax. The franchise tax part of the fee is computed at a rate of $1.50 per $1,000 of the corporation’s paid-in capital, with a $25 minimum. “Paid-in capital” is the total amount of payment the corporation expects to receive from the initial shareholders when stock is issued to them, minus any commissions or expenses incurred in connection with the issuance of shares. The corporation can have paid-in capital of up to $16,667 and pay the minimum $25 franchise tax.
Illinois corporations must maintain a registered agent within the state-a person or office designated to receive official state administrative and legal correspondence. The agent must have the same business office address as the registered office and be either an individual residing in the state or a corporation with the authority to conduct business in Illinois.
A copy of the filed articles of incorporation must be recorded with the clerk of the county where the resident agent resides.
Bylaws describe the corporation’s basic operating principles from both the managerial and legal perspectives. Corporations must maintain their bylaws at their main executive office, but are not required to file them with the state.
The incorporators or board of directors should adopt the corporation’s bylaws at its initial meeting-making sure that they do not conflict with the articles of incorporation-and keep them updated. The corporation’s board of directors can adopt, amend, or repeal bylaws, unless the articles of incorporation reserve this right to the shareholders.
Corporate bylaws should include at least the following:
- How, when, and where shareholders and directors meetings are held
- What authority directors have, how many there are, and how long they serve
- How consensus on major decisions is reached with and without meetings
- Duties and responsibilities of officers and how long they serve
- How stock is issued
- Requirements for providing annual financial information to shareholders
Officers of the company must be listed in the bylaws or elected by the board. The secretary has authority to certify the bylaws, resolutions and other corporate documents. An officer may simultaneously hold more than one corporate office unless otherwise prohibited by the corporation’s bylaws.
The corporation must file an annual report with the Illinois Secretary of State within the 60-day period prior to the month of incorporation. This report must include:
- The corporation’s name
- Its principal office address
- The names and addresses of the corporation’s directors and officers
- The address of its registered office
- The name of its registered agent at that (in-state) office
- Information about stock share classes, share volume, and paid-in capital
- Information about the corporation’s property value and/or location
- Information about the corporation’s status as a woman- or minority-owned business
The Illinois corporate income tax rate varies based on the amount of the corporation’s income and other factors. The state requires payment of a franchise tax and license fee as mentioned above for the exercise of franchises in the state; this is usually due at the time the corporation files its share issuance reports.
The state of Illinois recognizes “S corporation” status. A “subchapter S” corporation or “S-corporation” is one that chooses to be treated as a pass-through entity for tax purposes, meaning that the tax-related information for the “S-corp” is filed as part of the owner’s individual income tax.