How to Start a Corporation in Illinois
If you are interested in setting up your business as an Illinois corporation, the process is very simple and can be broken down into three major steps:
- Filing the Articles of Incorporation with the Illinois Secretary of State
- Creating the corporation’s corporate bylaws
- Choosing your initial director(s).
We’ll show you how to start a corporation in Illinois yourself.
Or, simply use a professional service:
Northwest ($29 + state fee)
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Follow the steps in our How to Start a Corporation in Illinois guide below to get started:
For a look at corporation formation in every state, check out our other How to Start a Corporation guides.
Not sure if a corporation is right for you? Check out our LLC vs. Corporation guide to help you make your decision.
Step 1: Name Your Illinois Corporation
Choosing a business name is the first step in starting a corporation.
1. Illinois naming guidelines:
- No words are allowed to be used in a corporation’s name that could lead to confusion arising between it and a body of government (e.g., Treasury, FBI).
- Your corporation cannot conduct business under any name other than its own unless you register for an assumed name.
- Your name must:
- contain the word "trust" if it is organized to accept and execute trusts
- contain the word "pawners" if it is organized as a pawners' society
- contain the word "cooperative" if it is organized as a cooperative association for pecuniary profit.
- Acceptable corporate names are required to include one of the following terms: company, limited, corporation, incorporated (or an abbreviation of these).
- No names that are too similar to those of already registered corporations in Illinois will be accepted.
Read the Illinois state statute regarding corporation naming guidelines for more information.
2. Is my corporation name available in Illinois?
Your Illinois corporation name must be unique and distinguishable from other business names in Illinois. Use the Illinois Secretary of State’s Business Search Portal to determine if your desired business name is available.
3. Is the URL available?
Before registering your Illinois corporation, you’ll need to check if a good URL is available for your business name. It’s important to secure your URL right away.
Find a Domain Now
Step 2: Choose an Illinois Registered Agent
You must appoint an Illinois registered agent when registering your corporation with the Secretary of State.
Your registered agent can be an individual, business entity, or professional registered agent service. Any member of the corporation or individual can serve as your Illinois registered agent as long as the person:
- is 18 years or older
- has a physical address in the state where business activity is conducted
- is available (in person) during normal business hours
Recommended: Northwest offers one year of free registered agent services with their corporation formation package ($29 + State Fees).
Step 3: Hold an Organizational Meeting
Before you officially file the Articles of Incorporation in Step 4, you will need to hold an organizational meeting to complete the following tasks:
- Fill out and execute the Articles of Incorporation
- Create and approve bylaws
- Select your initial director(s)
- Determine your share structure
- Execute an Incorporator’s Statement
Create and Approve Corporate Bylaws
Bylaws are the rules that determine how your organization will be governed and run. For detailed instructions on creating your bylaws, read our corporate bylaws guide.
Appoint Initial Directors
You must appoint at least one director who will oversee your Illinois corporation until the first shareholder meeting.
A corporate director is in charge of the adoption, amendment, and repeal of operational bylaws as well as the election, supervision, and removal of officers.
After forming the corporation, the incorporator(s) — or initial director(s), if named on the formation documents — should call an organizational meeting. During this initial meeting, either the incorporator(s) will elect the board of directors or the initial director(s) will appoint the officers.
Choose a Share Structure and Strategy
A share of stock is the unit of ownership of a corporation. Each share of stock represents a percentage of ownership of the company. For example, if a corporation issues one share of stock the shareholder (stock owner) would then own 100% of the corporation.
Shares can be structured into classes. Each class, termed a share class, holds different rights and privileges. You can have multiple classes and each class can hold any number of shares.
Authorized Shares: the number of shares the corporation is allowed to issue.
Issued Shares: the total number of shares actually issued to shareholders.
Share Class: a group of shares that has a unique set of rights and privileges.
In Illinois, the Articles of Incorporation form allows you to indicate if the corporation will issue more than one authorized share class.
Create and Execute an Incorporator’s Statement
The incorporator(s) should sign an Incorporator’s Statement with complete names and addresses of each initial director and store it in the corporate records book.
This document names the initial director(s) that will serve until the board of directors is elected during the first shareholder’s meeting. It should be stored with the rest of your corporate records.
Step 4: File the Illinois Articles of Incorporation
You will need to file the Illinois Articles of Incorporation to set up a corporation in Illinois. You can file it online, by mail, or in person with the Illinois Secretary of State. The filing cost is $150. You must submit the completed form in duplicate if you file a hard copy.
This document will cover the basics of your corporation, including:
- Corporate name and statement of purpose
- Corporate registered agent name and street address
- The number of authorized shares the corporation is allowed to issue
- Director(s) name(s) and address(es)
- Incorporator(s) name(s) and address(es)
- The estimated value of property owned
- The estimated gross amount of business
File the Illinois Articles of Incorporation
Option 1: File Online With Illinois CyberdriveFile Online
- OR -
Option 2: File the Articles of Incorporation by Mail or In PersonDownload Form
Filing Cost: $150
Secretary of State
Department of Business Services
501 S. Second St., Rm. 350
Springfield, IL 627564
Step 5: Get an EIN for Your Illinois Corporation
An Employer Identification Number (EIN) is used by the federal government to identify a business entity. It is essentially a Social Security number for the company. An EIN is needed:
- To open a bank account for the company
- For federal and state tax purposes
- To hire employees
Get an EIN
Option 1: Request an EIN from the IRS
- OR -
Option 2: Apply for an EIN by Mail or Fax
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
Running Your Corporation
It is very important to adhere to the formalities of running a corporation. Read our How to Run a Corporation guide to learn more.
Taxes, Annual Reports, & Licensing
Illinois State Corporation Tax Requirements
Depending on the nature of your business, you may be required to register for one or more forms of state tax:
Illinois Sales Tax
Illinois Employer Taxes
If you hire employees, you will need to register for Illinois employer taxes through the MyTax Illinois website. This includes Employee Withholding Tax, Unemployment Insurance Tax, and Disability Insurance.
Illinois Corporation Licenses and Permits
To operate your corporation in Illinois, you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
Learn more in our Illinois Business License guide.
File the Illinois Corporate Annual Report
You must file an annual report with the Secretary of State each year before the first day of the anniversary month of your corporation’s registration. This can either be done online or by mailing in a hard copy, but if any of the following conditions apply, you must file a hard copy:
- The corporation owns property or does business outside of Illinois
- There have been changes in authorized shares, issued shares and/or paid-in capital
- You need to enter more than six officers or six directors
Corporate Dissolution & Illinois Good Standing
How to Get an Illinois Certificate of Good Standing
A Certificate of Good Standing verifies that your Illinois corporation was legally formed and has been properly maintained.
You can request a Certificate of Good Standing in Illinois online, by phone, or with a written request to the Secretary of State. The fee is $25.
Request a Certificate of Good Standing
Option 1: Request a Certificate Online With Cyberdrive IllinoisRequest Online
- OR -
Option 2: Request a Certificate by Mail or by PhoneRead Instructions
Secretary of State Corporations Division
501 S. Second St., 3rd Fl.
Springfield, IL 62756
Phone: (217) 782-6875
How to Dissolve a Corporation in Illinois
If at any point you would like to permanently stop doing business, or close your business, it is important to officially dissolve your corporation. Failure to do so in a timely fashion can result in tax liabilities, penalties, or even legal trouble.
There are five main steps to close your Illinois corporation:
- Stop doing business
- Hold a board meeting, vote on dissolution, and record the meeting in the corporation minutes
- File the Articles of Dissolution with the Illinois Secretary of State
- Close your federal and state business tax accounts with the IRS and Illinois Department of Revenue
- Close your business bank accounts
File Dissolution Documents
You must dissolve or close your corporation with the Illinois Secretary of State by filing the Articles of Dissolution (Form BCA 12.20). The filing fee is $5.
Is a Corporation Right For You?
An LLC provides limited liability protection without corporate complexity.
Find out if an LLC is the right structure for you.
Steps After Forming a Corporation
After forming a corporation, you’ll want to protect your personal and business assets and build credit.
Taking these steps will set your business up for success:
Illinois Corporation FAQ
In Illinois, filing your Articles of Incorporation with the Secretary of State will cost $150. This price remains the same regardless of whether you file by mail, online, or in person.
Additionally, if you decide to go with a professional registered agent service, this will further increase the total startup cost.
Our Best Registered Agent Services article provides a good starting place to find your perfect fit.
LLCs are able to benefit from “pass-through” taxation, less strict operational regulations, and a cheaper startup cost.
In contrast, corporations are better at attracting investment. This renders LLCs the better choice in most scenarios – except where you plan to work with private investors.
Our Why Investors and Venture Capitalists Like C Corporations article explores exactly why corporations provide a more appealing structure for most investors.
Typically incorporation filings can take up to 10 business days to be processed. However, there is also a 24-hour expedited service for an additional $250.
Note: The type of corporation you select can influence the timeline in which it will be formed. See our What is a Corporation article for more information on this.
Starting a corporation is a straightforward process. Although it can be more difficult, expensive, and time-consuming to do so than starting an LLC.
The only four steps you need to complete in order to start a corporation are:
- Pick a suitable name
- Elect a registered agent
- Hold an organizational meeting
- File your Articles of Organization
See our LLC vs Corporation article for a more in-depth look at a comparison between these two business structures.
Yes, starting an LLC is slightly easier than starting a corporation. It is also far easier to run an LLC compared to a corporation.
This is due to the strict management regulations and federal scrutiny that corporations are subject to, which makes the comparatively lax structure of an LLC seem easier.
We recommend checking our How to Start a Corporation in Illinois article for more information.