Reading to form a corporation in Illinois? Get an easy-to-follow explanation about naming and registering your business, how much it costs, the paperwork you’ll need, and more.
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by Jane Haskins, Esq.
Jane has written hundreds of articles aimed at educating the public about the legal system, especially the legal aspe...
Updated on: January 9, 2024 · 5 min read
When you form a corporation, your personal assets gain protection from your business’s debts and obligations. This limitation of liability can also help protect you personally if someone sues the corporation or one of its employees. Other reasons to form a corporation include fringe benefits such as health insurance programs and beneficial tax structures.
Your corporation exists as soon as your articles of incorporation are filed. To form a corporation, file the original and a copy of the articles of incorporation with the Illinois Secretary of State and pay a filing fee. At a minimum, the articles of incorporation must contain these provisions:
A corporation can have different types of stock, called classes or series. These types of stocks can have different advantages, for example, one can offer voting rights while another may not. In regards to share structure, your articles must contain the following additional information:
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It is wise to check the availability of your proposed corporate name before filing your articles of incorporation. You can do this online at the Secretary of State’s website or by writing or calling the business services department.
You can reserve a name for 90 days by submitting a form or a letter to the Secretary of State.
Your corporation’s name must meet the following requirements:
The incorporators prepare, sign, and file the articles of incorporation. Their names and addresses are listed in the articles. If the incorporator is another corporation, the articles must show the corporation’s exact name and state of incorporation.
When specifying incorporators, you must meet the following requirements:
Corporate directors are responsible for managing the corporation and setting corporate policies and strategies. Directors may delegate their management duties to committees or officers. Directors must always act in the best interests of the corporation and its shareholders.
Directors do not have to be Illinois residents or shareholders of the corporation. The articles of incorporation or bylaws can establish eligibility requirements for directors.
There must be at least one director. Illinois law does not specify a maximum number of directors.
All corporations must designate a registered agent to receive lawsuits and other legal documents in the corporation’s name. Official correspondence is sent to the registered agent at the registered office.
Your registered agent must meet the following requirements:
Usually, a corporation may state its purpose in general terms, which provides corporations with flexibility. Illinois authorizes this general-purpose language: “The transaction of any or all lawful purposes for which businesses may be incorporated under the Illinois Business Corporation Act of 1983.”
A corporation’s bylaws establish important procedures for the way your corporation will operate. Bylaws typically include such things as the number and duties of officers and directors, the way that officers and directors are chosen, and the way that directors’ and shareholders’ meetings are called and conducted.
Although bylaws are not filed with the state, the following requirements must be met:
The Illinois Secretary of State requires a fee when filing articles of incorporation or reserving a corporation name. When the articles are filed, an initial franchise tax is also due. Corporations are also required to pay state and federal income taxes.
Ready to start a corporation in Illinois? LegalZoom can help you form a corporation online and get a registered agent in Illinois.
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