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corp formationUpdated 2026-03-31

How to Incorporate in Illinois

Step 2: Appoint Your Board of Directors

Illinois requires every corporation to have at least one director. You must identify your director(s) before filing your Articles of Incorporation, and you may name them in the articles themselves.

Director Eligibility

Illinois does not require directors to be residents of Illinois or shareholders of the corporation. Directors may be individuals of any age (though practical governance suggests adults) or, in some cases, other business entities. You may appoint yourself as the sole director if you wish.

Director Duties and Liability

Directors have fiduciary duties to the corporation and its shareholders under the Illinois Business Corporation Act (805 ILCS 5/). They are responsible for managing the business and affairs of the corporation. However, the articles of incorporation or bylaws may limit director liability in certain circumstances.

Initial Director Information

Gather the following information for each director you plan to name:

  • Full legal name
  • Business address
  • Residential address (if different)

You do not need director consent to name them in the articles, but it is best practice to confirm their willingness to serve before filing.

Step 3: Choose a Registered Agent and Registered Office

Every Illinois corporation must maintain a registered agent and registered office in Illinois. The registered agent is the person or entity authorized to receive legal documents on behalf of your corporation.

Who Can Serve as Registered Agent

Your registered agent must be either an individual who resides in Illinois or a business entity authorized to transact business in Illinois. Many business owners serve as their own registered agent, or they appoint an employee, manager, or professional registered agent service.

Registered Office Address Requirements

Your registered office must be located in Illinois and must have a street address (or rural route plus box number). You cannot use a P.O. Box alone as your registered office address. The registered office address must match the business office address of the registered agent.

Naming Your Agent in the Articles

You will provide the registered agent's name and registered office address in your Articles of Incorporation. Illinois law does not require the agent's prior written consent to be filed with the articles, but you should confirm the agent's agreement to serve before naming them.

Changing Your Registered Agent Later

If you need to change your registered agent or registered office after incorporation, you file a Statement of Change of Registered Agent and/or Registered Office with the Secretary of State. The fee for this change is $25.

Step 4: Prepare and File Your Articles of Incorporation

The Articles of Incorporation is the primary formation document for Illinois corporations. You file it with the Illinois Secretary of State to officially create your corporation.

Required Information in the Articles

Your Articles of Incorporation must include:

  • The name of the corporation (with a corporate designator)
  • The principal place of business address
  • The registered agent's name and registered office address
  • The number of authorized shares of stock (if any)
  • The names and addresses of the initial board of directors
  • The name and address of the incorporator (the person filing the articles)
  • Any other provisions permitted under the Illinois Business Corporation Act (805 ILCS 5/2.10)

You may also include optional provisions, such as a delayed effective date (up to 60 days after filing), limitations on director liability, or provisions regarding shareholder voting rights.

Filing Method and Fee

You may file your Articles of Incorporation online through the Illinois Secretary of State's online filing system at https://apps.ilsos.gov/llcarticles/index.jsp or by mail. The filing fee is $150. Online filing is faster and recommended.

If you file online, you will receive confirmation immediately. If you file by mail, send your articles to:

Illinois Secretary of State
Department of Business Services, Limited Liability Division
501 S. Second St., Rm. 350
Springfield, IL 62756

Or:

69 W. Washington St., Ste. 1240
Chicago, IL 60602

Effective Date

Your corporation comes into existence when the Secretary of State files your Articles of Incorporation. You may request a delayed effective date (up to 60 days after filing) in your articles if you are not ready to begin operations immediately.

Obtain Your Certificate of Incorporation

After filing, the Secretary of State will issue a Certificate of Incorporation confirming that your corporation is legally formed. You can request an official copy for an additional fee if needed for bank accounts or other purposes.

Step 5: Adopt Bylaws and Hold an Organizational Meeting

After your Articles of Incorporation are filed, you should adopt bylaws and hold an organizational meeting to formalize your corporation's internal governance.

What Are Bylaws?

Bylaws are the internal rules governing how your corporation operates. They cover matters such as the number and duties of directors, the timing and conduct of shareholder and director meetings, the issuance and transfer of stock, and the roles of officers. Bylaws are not filed with the Secretary of State—they are kept by the corporation.

Adopting Bylaws

Your initial board of directors (or the incorporator, if acting before the board is formally constituted) adopts bylaws. Bylaws may be adopted at an organizational meeting or by written consent. Many small corporations use template bylaws and customize them as needed.

Organizational Meeting

At your organizational meeting, you should:

  • Adopt bylaws
  • Elect officers (president, secretary, treasurer, and any others your bylaws require)
  • Authorize the issuance of stock
  • Approve a corporate seal (optional)
  • Authorize opening a bank account
  • Discuss any other matters necessary to begin operations

You may hold this meeting in person or by written consent (a common practice for small corporations).

Minutes and Records

Keep written minutes of your organizational meeting and maintain them in your corporate records book. Illinois law requires corporations to maintain records of shareholder and director meetings.

Step 6: Issue Stock and Obtain an EIN

After incorporation, you must issue stock to your shareholders and obtain a federal Employer Identification Number (EIN) for tax purposes.

Stock Issuance

Your Articles of Incorporation specify the number of authorized shares your corporation may issue. At your organizational meeting, your board of directors authorizes the issuance of a specific number of shares to shareholders in exchange for payment (cash, property, or services).

Create stock certificates for each shareholder showing the number of shares owned. Keep a stock ledger recording all issuances and transfers. Illinois does not require stock certificates to be filed with the Secretary of State, but you must maintain them in your corporate records.

Obtain Your EIN

You must obtain a federal Employer Identification Number (EIN) from the Internal Revenue Service. You can apply online at https://www.irs.gov/ein or by mail using Form SS-4. The EIN is free and is used for federal tax returns, payroll, and bank accounts.

You will need your EIN to:

  • Open a corporate bank account
  • Hire employees and withhold payroll taxes
  • File federal income tax returns
  • Apply for state tax registration

Federal Tax Classification

When you obtain your EIN, the IRS will ask how you want your corporation to be taxed. By default, a corporation is taxed as a C corporation. If you prefer S corporation taxation (which may reduce your overall tax burden), you must file Form 2553 with the IRS within a specified timeframe. Consult a tax professional about whether S corporation status is right for your situation.

Step 7: Register for Illinois State Taxes and Licenses

Illinois requires corporations to register for state taxes and obtain any necessary business licenses before beginning operations.

Illinois Business Tax Registration

If your corporation will make taxable sales or hire employees, you must register with the Illinois Department of Revenue. Registration is free and can be completed online through MyTax Illinois at https://tax.illinois.gov/ or by filing Form REG-1.

You will receive a Business Tax Registration Number (BTRN) that you must use on all Illinois tax filings. Register before you make your first taxable sale or hire your first employee.

Sales Tax Certificate of Registration

If your corporation will sell taxable goods or services, you must obtain a Sales Tax Certificate of Registration from the Illinois Department of Revenue. This is part of the business tax registration process and is free. The state sales tax rate is 6.25%, plus any applicable local add-ons (which vary by county and municipality).

Corporate Income Tax

Illinois corporations are subject to corporate income tax at a rate of 7% on Illinois-taxable income, plus a 2.5% replacement tax, for a combined state-level rate of 9.5%. You must file an annual Illinois corporate income tax return with the Department of Revenue, even if you have no Illinois-source income.

Local Business Licenses and Permits

Depending on your location and industry, you may need to obtain local business licenses or permits from your city or county. Contact your local city or county clerk's office to determine what licenses or permits apply to your business. Common local requirements include:

  • Local business license or zoning approval
  • Health permits (for food service or similar businesses)
  • Liquor licenses (if applicable)
  • Professional or occupational licenses

Professional Licenses

If your corporation will provide professional services requiring Illinois licensure (such as law, medicine, accounting, or engineering), you must obtain the appropriate professional license through the Illinois Department of Financial and Professional Regulation (IDFPR). Some professions require the corporation itself to be licensed; others require individual practitioners to be licensed.

Step 8: File Your First Annual Report

Illinois requires all corporations to file an annual report with the Secretary of State each year. Your first annual report is due before the first day of your corporation's anniversary month in the year following incorporation.

Annual Report Requirements

Your annual report must include:

  • Your corporation's name and registered office address
  • The names and addresses of your directors and officers
  • Your principal place of business address
  • Confirmation that your registered agent and registered office are current

You can file your annual report online at https://www.ilsos.gov/departments/business-services/annual-reports/llc-instructions.html or by mail.

Annual Report Fee

The annual report fee is $75. This fee is due each year, even if your corporation has no business activity.

Anniversary Month

Your anniversary month is the month in which you filed your Articles of Incorporation. Your annual report is due before the first day of that month each year. For example, if you incorporated in March 2026, your first annual report is due before March 1, 2027.

Late Penalties

If you fail to file your annual report by the due date, you may face late penalties. Illinois imposes penalties for failure to file, so mark your calendar and file on time.

Step 9: Understand Your Ongoing Tax Obligations

As an Illinois corporation, you have ongoing state and federal tax obligations that you must meet to maintain your corporate status and avoid penalties.

Federal Income Tax

Your corporation must file a federal income tax return (Form 1120 for C corporations or Form 1120-S for S corporations) with the IRS by April 15 of the year following the tax year. If you elect S corporation status, you must file Form 2553 with the IRS to make that election.

Illinois Corporate Income Tax

Your corporation must file an annual Illinois corporate income tax return with the Department of Revenue. The return is due by the same deadline as your federal return (April 15). Illinois corporations pay 7% corporate income tax plus 2.5% replacement tax on Illinois-taxable income.

Payroll Taxes

If you have employees, you must withhold federal and state income taxes, Social Security taxes, and Medicare taxes from their wages. You must file payroll tax returns with the IRS and the Illinois Department of Revenue on a regular schedule (typically quarterly).

Sales Tax

If your corporation makes taxable sales, you must collect sales tax from customers and remit it to the Illinois Department of Revenue. The state rate is 6.25%, plus local add-ons. You must file sales tax returns on a regular schedule (typically monthly or quarterly, depending on your sales volume).

Franchise Tax

Illinois no longer requires payment of Secretary of State franchise tax that would otherwise have been due on or after January 1, 2025. However, your corporation still must file annual reports and remains subject to Illinois income and replacement taxes through the Department of Revenue.

Comparison: Corporation vs. LLC in Illinois

While this guide focuses on incorporation, you should understand how Illinois corporations differ from Limited Liability Companies (LLCs) to ensure you choose the right entity type.

Feature Corporation LLC
Formation Document Articles of Incorporation Articles of Organization
Formation Fee $150 $150
Annual Report Fee $75 $75
Minimum Owners 1 shareholder 1 member
Management Board of directors required Manager or member-managed
State Income Tax 7% corporate tax + 2.5% replacement tax Pass-through (1.5% replacement tax if taxed as partnership/S corp)
Liability Protection Yes Yes
Formality Required Higher (bylaws, board meetings, stock) Lower (operating agreement optional)
Ownership Transfer Stock certificates Membership interests

When to Choose a Corporation: You plan to reinvest profits in the business, seek outside investment, or want to go public in the future. Corporations are also appropriate if you want a familiar governance structure with a board of directors.

When to Choose an LLC: You want simpler management and lower formality, you plan to distribute profits to owners annually, or you want pass-through taxation. LLCs are often preferred by small businesses and professional service providers.

Conclusion

Incorporating in Illinois involves nine key steps: verifying your corporate name, appointing directors, selecting a registered agent, filing your Articles of Incorporation ($150 fee), adopting bylaws, issuing stock and obtaining an EIN, registering for state taxes and licenses, filing your first annual report ($75 fee), and understanding your ongoing tax obligations.

Illinois corporations are subject to 7% corporate income tax plus 2.5% replacement tax, and must file annual reports each year. The Secretary of State's website at https://www.ilsos.gov/ provides forms, instructions, and online filing tools. For questions, contact the Department of Business Services at (217) 524-8008 or visit one of their offices in Springfield or Chicago.

After incorporation, maintain your corporate status by filing annual reports on time, keeping accurate records, paying your taxes, and following the formalities required by your bylaws and Illinois law. Consider consulting a business attorney or accountant to ensure you meet all legal and tax requirements.

Legal References and Resources

Illinois Secretary of State

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