Why Incorporate in Illinois?
Just like many states in the country, Illinois offers several tax-based incentives to help businesses create jobs and investments in Illinois.
For example, the Illinois Enterprise Zone Program was designed to stimulate economic growth and neighborhood revitalization in economically depressed areas of the state through state and local tax incentives, regulatory relief and improved governmental services. Businesses located or expanding in an Illinois enterprise zone may be eligible for state and local tax incentives.
For many entrepreneurs looking to start a larger business, creating an Illinois corporation may be the best choice. As a corporation, your business is able to buy and trade stock, and when it comes to excess profits, corporations offer more flexibility than an LLC. A corporation is allowed to pass income and losses to its shareholders, who report taxes on an individual tax return at ordinary levels.
Is an LLC Better Than a Corporation?
It all depends on your goals. Limited liability companies are usually better for smaller businesses. An LLC is easier to set up, and you receive many of the same benefits as a corporation, but with less regulation.
Learn more about forming an Illinois LLC so you can decide which business entity is right for you.
Benefits of Forming an Illinois C Corp
Benefits of Forming an Illinois S Corp
It offers several advantages similar to those provided by a C Corp including, but not limited to:
- Options for creating, transferring and selling stock, though not as many as a C Corp
- The capacity for up to 100 shareholders
- Simpler rules than those applicable to C Corporations
- Easy transfer of ownership simply by selling your stock
- The possibility of saving money by allowing you to pay less self-employment tax
In this guide, you’ll find information on naming your corporation, getting a Registered Agent, the fees you’ll need to pay, business taxes and much more. We also cover what you'll need to register your corporation and how you'll interact with the Illinois Secretary of State.
How to Form an Illinois Corporation Yourself in 6 Steps
Choose a Unique Business Name and Complete a State Business Search
Every Illinois business must have a unique name that isn't already being used by another business in the state. If you’re having a tough time coming up with a name, try using our Business Name Generator to gather ideas. You'll need to follow a few naming rules, which you can read about in detail on the Illinois Corporation Names page.
Once you’ve selected a name, you’ll need to make sure it’s available in Illinois. To learn whether another company in the state is using your desired business name, use our tool to do a Illinois entity search.
You can also search for your desired name on the IL Secretary of State website.
Provide an Official Address for your Corporation
Every Illinois corporation must have a designated primary address. That could be your home address (if you’re running the company from your house), a building where your office is located or any physical address of your preference. The address can be outside the state of Illinois and can be a P.O. Box.
You may also be able to use a virtual mailbox for your business address. Incfile can provide you with a Illinois virtual mailbox where we'll receive your mail, scan it, and upload it for your online review. This can be especially convenient if you run a home-based business and don't want your home address published as part of your business public record.
Assign an Registered Agent
Someone who receives official correspondence and is responsible for filing reports with the Illinois Secretary of State is known as a Registered Agent. Every Illinois corporation is required to have a Registered Agent.
You may fill this position yourself, assign another manager in your business or use a Registered Agent service. If your Registered Agent in Illinois is a natural person, they must have a physical street address in Illinois and must be present during business hours to receive important documents on behalf of your company.
You'll appoint your Registered Agent when you file your Illinois Articles of Incorporation to create your business with the Secretary of State.
All of Incfile’s business formation packages include Registered Agent service. It’s free for the first year and just $119 per year after that. You can also access a digital dashboard to view any document we've received on your behalf.
File Your Articles of Incorporation with the Illinois Secretary of State
Once you've gathered all the information for your corporation, you’ll need to file a form with the Secretary of State to create your Articles of Incorporation. This will officially create your business.
Your Articles of Incorporation can be filed online via the Secretary of State website. You can also mail or file the form in person to the Office of the Secretary of State, or Incfile can file it on your behalf. The Illinois corporation filing fee is $175 (this includes the initial minimum franchise tax fee of $25).
Secretary of State
Department of Business Services
501 S. Second St., Rm. 350
Springfield, IL 62756
Secretary of State
Department of Business Services
69 W. Washington St., Ste. 1240
Chicago, IL 60602
You only need to file your Illinois Articles of Incorporation once, but every year after, you'll also need to report and pay IL franchise tax (if applicable to your business) and file an annual report. The annual report requires you to pay Illinois franchise tax at this time. A calculation process is included in the form to help you determine how much you owe in franchise tax. Incfile can remind you about this every year, or we can do it for you if you have us handle the paperwork.
What are the fees and requirements to incorporate in Illinois?
Within 60 days immediately preceding first day of anniversary month.
Get an Employer Identification Number (EIN) from the Internal Revenue Service
You'll need an EIN to identify your business to the IRS. You use this number when filing and paying taxes, when submitting payroll information and payments for your employees and opening a business bank account. You can obtain one directly from the IRS, or Incfile can get one for you as part of the Illinois corporation formation process.
Bylaws are a set of rules that govern how a corporation will be run. They may detail how many directors the corporation will have, whether the board of directors will have annual meetings and what the voting requirements are, among other things.
Some states require companies to create bylaws. Although you're not legally required to file your bylaws with the state of Illinois, you are required to have them at your principal place of business. Regardless of whether or not your state requires them, it’s always a good idea to write bylaws to protect your business from any future changes and events.
Illinois Corporation Types
Check with the IL Secretary of State to confirm whether your business should and can be a Professional Corporation.