How to Form an Illinois Nonprofit Corporation

Most nonprofits are 501(c)(3) corporations, meaning they're formed for religious, charitable, scientific, literary, or educational purposes and are eligible for federal and state tax exemptions. To create a 501(c)(3) tax-exempt organization, first you need to form an Illinois nonstock corporation. Then you must apply for tax-exempt status from the IRS and the State of Illinois.

While the requirements for forming nonprofits vary, you can generally follow the steps below to create your Illinois nonprofit. You can also read the comprehensive Guide for Organizing Not-for-Profit Corporations provided by the Illinois Secretary of State (SOS).

1. Choose a Name for Your Illinois Nonprofit Corporation

The first step to starting your charitable organization is choosing a name for your nonprofit. Before settling on a name, make sure you know Illinois's laws around nonprofit names.

Your Nonprofit Name Must Be Distinguishable

Under Illinois law, the name of your nonprofit corporation can't be the same as or too similar to the name of a domestic or foreign corporation or limited liability company that's been reserved or registered with the SOS. In general, you should select a name that's distinct from any business you find operating in the state. (805 Ill. Comp. Stat. § 105/104.05 (2025).)

You can check whether the proposed name for your nonprofit is available using the SOS's business entity search. You can also submit a corporate name availability inquiry form to the SOS to conduct a preliminary check of your proposed name.

Reserve Your Nonprofit's Name

You can reserve an available name for your nonprofit for 90 days. You're not required to reserve a name. This step is optional. (805 Ill. Comp. Stat. § 105/104.10 (2025).)

You can reserve your nonprofit name by filing an Application for Reservation of Name (NFP 104.10) with the SOS. As of 2025, the filing fee to reserve a name for your nonprofit is $25.

Register Your Nonprofit's Assumed Corporate Name (DBA)

When your nonprofit does business, you don't have to use your nonprofit's legal name registered on its formation paperwork. Instead, you can use a different name for your business—sometimes called an "assumed name" or a "DBA," (short for doing business as), "trade name," or "fictitious name."

If your nonprofit uses an assumed corporate name in Illinois, you must file an Application to Adopt an Assumed Name (Form NFP 104.15/20) with the SOS. You can adopt your assumed name online through the SOS's online business services. Alternatively, you can complete and mail a paper copy to the SOS.

In general, your name registration will last from the day you file with the SOS to the first day of the anniversary month of your nonprofit's formation which falls within the next calendar year divisible by five. For example, suppose you form your nonprofit on July 8, 2027. Your registration will last until July 1, 2030. You can renew your registration.

As of 2025, the fee to adopt an assumed corporate name in Illinois varies depending on the year of adoption. The fee can be as little as $30 if you register your assumed name during a calendar year that ends in 4 or 9 or as much as $150 if you register your assumed name during a calendar year that ends in 0 or 5. You can find these fee details in the instructions of the online or paper copy form.

(805 Ill. Comp. Stat. § 105/104.15 (2025).)

2. Appoint the Initial Directors for Your Nonprofit Corporation

Unless provided otherwise in your articles of incorporation, every Illinois nonprofit corporation must have a board of directors. Illinois law requires a minimum of three directors. The IRS also prefers that organizations seeking tax-exempt status have at least three directors. You should try to appoint an odd number of directors to prevent voting ties.

For the most part, your corporation's articles or bylaws can outline specifics for directors, such as:

• the number of directors (it can be a set number or a range)
• the rights, duties, and powers of directors
• the term of directors
• the qualifications for directors
• the election, designation, and appointment of directors, and
• the meetings of the board of directors.

(805 Ill. Comp. Stat. §§ 105/108.05 and following (2025).)

3. Prepare and File Your Nonprofit's Articles of Incorporation

You create your nonprofit entity by filing nonprofit Articles of Incorporation with the DFI. Your articles of incorporation must include the following information:

• the name of your nonprofit
• the purpose for which your nonprofit is organized
• the name and address of your nonprofit's initial registered agent
• the name and address of each incorporator
• the number of directors your nonprofit will initially have, and
• the name and address of each initial director.

Some types of nonprofits, such as clubs and homeowner associations, will have additional requirements.

(805 Ill. Comp. Stat. § 105/102.10 (2025).)

Include IRS-Specific Nonprofit Language in Your Articles

To receive tax-exempt status from the IRS, you'll need to have certain specific language in your articles, including:

• a statement of purpose that meets IRS requirements
• statements that your nonprofit will not engage in activities unrelated to its exempt purposes or in prohibited political or legislative activity, and
• a dissolution clause dedicating the corporation's assets to another 501(c)(3) organization or to the government upon dissolution.

You can include your statement of purpose under Article 4 of your articles of incorporation. You can add the prohibited activities and dissolution clauses in Article 5, which is for "other provisions."

For more guidance, the IRS has published suggested language for corporations to use in their articles of incorporation. You can also find sample language for these clauses approved by the IRS in the Instructions for IRS Form 1023-EZ, (see Part II).

How to File Your Nonprofit's Articles of Incorporation With the SOS

You can use the articles of incorporation form (Form NFP 102.10) the SOS provides for your nonprofit. You can find the articles and other relevant forms on the SOS's not for profit corporations publications/forms page. The articles includes brief instructions. Complete and mail your articles to the SOS following the instructions provided.

You can also file your articles online via the SOS's online business services.

As of 2025, the filing fee for an Illinois nonprofit corporation is $50.

4. Prepare Bylaws for Your Illinois Nonprofit Corporation

Your nonprofit's board of directors must adopt initial bylaws for your nonprofit corporation. (805 Ill. Comp. Stat. § 105/102.25 (2025).)

Your bylaws contain the rules and procedures your corporation will follow for:

• holding meetings
• electing officers and directors
• adopting, amending, and repealing the bylaws, and
• taking care of other corporate formalities.

You can draft the bylaws yourself. You can use free and inexpensive samples online (including our nonprofit bylaws form) to help you. You can also recruit an experienced business lawyer to draft the bylaws for your nonprofit.

You don't need to file your bylaws with the state—this document is your internal operating manual.

For more information on this nonprofit formation document, see our article about articles of incorporation, bylaws, and organizational minutes.

5. Hold a Meeting of Your Board of Directors

After incorporating your nonprofit, you should hold the first meeting of the board of directors. Your first board meeting is usually referred to as an "organizational meeting" because you're organizing the nonprofit. A majority of the incorporators or directors must call the meeting.

The board or incorporators should take such actions as:

• electing the directors (if none have yet been appointed)
• approving the bylaws
• appointing officers
• setting an accounting period and tax year, and
• approving initial corporation transactions, such as opening a corporate bank account.

Instead of holding a meeting, you can take any director action by the written consent of all the directors.

(805 Ill. Comp. Stat. § 105/102.20 (2025).)

After the meeting is completed, create meeting minutes that accurately record the actions taken by the board. You should set up a corporate records binder for your nonprofit to hold important documents such as your articles of incorporation, bylaws, and meeting minutes.

6. Apply for an EIN From the IRS

Your nonprofit corporation must obtain a federal employer identification number (EIN). You'll need an EIN to complete your application for federal tax exemption (discussed below).

You can obtain an EIN by completing an online EIN application on the IRS website. There's no filing fee.

7. Obtain the Necessary Business Licenses

Depending on its business activities and location, your nonprofit could need to obtain local and state business licenses or permits. Like most states, Illinois doesn't require a general business license to operate in the state.

However, some cities require all or some businesses to get a license to operate within city limits. You should check with your city or town clerk or visit your city's website for details about local requirements. In addition, your nonprofit might need to apply for certain tax, professional, occupational, or other regulatory licenses at the local, state, or federal levels.

You can read our article on how to get a small business license in Illinois for more details about licensing and permitting requirements in the state. You can find more information and resources in the registrations, licenses, and permits section of the Illinois state website.

8. Obtain Your Federal and State Tax Exemptions

After legally forming your nonprofit corporation, you can obtain your federal and Illinois state tax exemptions. Here are the steps you must take to obtain your tax-exempt status.

Some nonprofits decide to reach out to a business or tax attorney at this stage. While you can form a nonprofit on your own, you might also find it useful to consult with a legal or tax professional. A business lawyer can help you complete the necessary steps to form and manage your nonprofit.

File Your Form 1023 Federal Tax Exemption Application

To obtain federal tax-exempt status from the IRS, you'll need to complete and file IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. This long and detailed form asks for a lot of information about your organization, including its history, finances, organizational structure, governance policies, operations, activities, and more.

Smaller nonprofits might be eligible to file Form 1023-EZ, Streamlined Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code. This application is a much simpler, shorter form that's filed online. Only smaller nonprofits—those with projected annual gross receipts of less than $50,000 and total assets of less than $250,000—are eligible to use the streamlined 1023-EZ application.

See the IRS website for more information on the Form 1023 and Form 1023-EZ filing requirements.

Illinois State Tax Exemptions

Illinois nonprofits should generally consider three types of state taxes and their level of exemption from each.

Illinois income tax. If your nonprofit is exempt from federal taxes, it's automatically exempt from filing and paying Illinois state income tax. However, your nonprofit will need to file and pay taxes on any unrelated business taxable income.

Sales and use tax. Most 501(c)(3) nonprofits will be exempt from paying Illinois sales tax. You must submit an Application for Sales Tax Exemption (Form STAX-1) to the Illinois Department of Revenue (IDOR) to receive a sales tax exemption number (e-number). You can apply for an e-number online through MyTax Illinois. You'll need to include a copy of your IRS 501(c)(3) determination letter and other information with your application.

Property tax. Your nonprofit might be exempt from paying property tax on property it uses for its 501(c)(3) purpose. You must apply for a property tax exemption with the County Board of Review. The Board will forward your application to the IDOR for a final decision. You'll need to use some version of Form PTAX-300, which is available through your chief county assessment officer.

You can read more about sales and property tax exemptions on the IDOR's tax-exempt organizations webpage. For details about income tax exemptions, visit the IDOR's exempt organization page.

Other State Reporting and Fundraising Registration Requirements

In general, if your nonprofit intends to solicit contributions or hold donations in Illinois, you must register your nonprofit with the Illinois Attorney General's Office (AG). You can register your nonprofit by filing a Registration Statement (Form CO-1) with the AG. Along with your statement, you must include:

• a registration fee of $15 (as of 2025)
• the names, mailing addresses, and phone numbers of all officers and directors of your nonprofit
• your nonprofit's IRS determination letter
• any contracts your nonprofit has with professional fundraisers
• your nonprofit's articles of incorporation
• your nonprofit's bylaws, and
• relevant financial information (either Form CO-2 or Form AG990-IL from the past three years).

If your nonprofit is a religious organization, then you must also include a Religious Organization Exemption Form (Form CO-3) with your registration statement.

Nonprofits must also file an annual report (Form AG990-IL) with the AG. Religious nonprofits that originally submitted Form CO-3 with their registration statement are exempt from the annual report requirement.

For more details and links to the above-referenced forms, see the AG's filing and reporting requirements for charitable organizations.

If your nonprofit plans to solicit or receive donations in other states, then you might have nonprofit filing and reporting obligations in those states as well. For more information about fundraising registration requirements in all 50 states, see Nonprofit Fundraising Registration Digital Guide, by Ronald J. Barrett and Stephen Fishman (Nolo).