To form a corporation in Illinois, you need to take the steps set forth below. You can also use Nolo's Online Corporation service, which will form a corporation for you with everything you need.
Your corporation's name must contain the word "Corporation," "Company," "Incorporated," "Limited," or an abbreviation of one of those words. Your corporation's name must be recognizably different from the names of other business entities already on file with the Illinois Secretary of State. Names may be checked for availability by searching the Business Services name database. You can also email or call to do a preliminary name check. You may reserve a name for up to 90 days by filing an Application for Reservation of Name (BCA-4.10) with the Secretary of State and paying a $25 fee.
Your corporation is legally created by filing Articles of Incorporation (BCA 2.10) with the Illinois Secretary of State. The articles may be filed online or by mail. The articles must include the corporate name; the name and street address of an agent for service of process; its purpose; the number of shares the corporation is authorized to issue and the consideration (money or property) the corporation will receive for the shares; and the names and addresses of the incorporators. The filing fee is $150 plus an initial franchise tax payment assessed at rate of $1.50 per $1,000 of paid-in capital represented in Illinois.
Technically, the minimum initial franchise tax is $25. However, there is a franchise tax exemption amount for each year as follows: $30 for 2020, $1,000 for 2021, $10,000 for 2022, $100,000 for 2023, and no tax due for 2024 and later. If the tax amount minus the exemption amount is 0 or less, no franchise tax is due.
Every Illinois corporation must have an agent for service of process in the state. This is an individual or corporation that agrees to accept legal papers on the corporation's behalf if it is sued. A registered agent may be an individual who resides in Illinois, or a domestic or foreign corporation authorized to do business in Illinois. If a corporation, its articles must authorize it to act as an agent. The registered agent must have a physical street address in Illinois. The agent should agree to accept service of process on your corporation's behalf prior to designation.
Bylaws are an internal corporate document that set out the basic ground rules for operating your corporation. They are not filed with the state. Your corporation is not legally required to have corporate bylaws, but you should adopt them because they (1) establish your corporation's operating rules, and (2) help show banks, creditors, the IRS, and others that your corporation is legitimate. For corporate bylaw forms, see Nolo's website or Incorporate Your Business, by Anthony Mancuso (Nolo). Corporate kits also typically contain sample bylaws.
Keep your bylaws, articles, stock certificates, minutes of shareholder and director meetings, and other important papers in a corporate records book. You can use a three-ring binder or order a corporate records kit through a corporate kit supplier.
The incorporator—the person who signed the articles—appoints the initial corporate directors who serve on the board until the first annual meeting of shareholders (when the board members who will serve for the next term are elected by the shareholders). The incorporator should complete and sign an "Incorporator's Statement" showing the names and addresses of the initial directors. The statement need not be filed with the state--keep it in the corporate records book. For a sample Incorporators Statement, see Incorporate Your Business, by Anthony Mancuso (Nolo).
At the first board meeting, the directors appoint corporate officers, adopt bylaws, select a corporate bank, set the corporation's fiscal year, authorize issuance of shares of stock, and adopt an official stock certificate form and corporate seal. Share issuances by small privately held corporations are usually exempt from federal and state securities laws--see the Nolo Corporations FAQ.
Record the directors' actions in corporate minutes prepared by the incorporator or any of the directors. For corporate meeting minute forms, see Nolo's website or refer to Incorporate Your Business, by Anthony Mancuso (Nolo).
All corporations doing business in Illinois must file an annual report with the Secretary of State and pay a $75 fee. Domestic corporations file Form BCA 14.05D, Domestic Corporation Annual Report. Foreign corporations file Form BCA 14.05 FOR, Foreign Corporation Annual Report.
The report must be filed by the corporation's anniversary date or a late-filing penalty will be imposed. The report can be filed online or by mail. However, if your corporation owns property outside of Illinois or transacts business outside of Illinois, you must file by postal mail.
Your corporation must obtain a federal employer identification number (EIN). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.