How to Start an Illinois Corporation — Step by Step

Illinois will reject Articles of Incorporation if the proposed name is not distinguishable from a name already on file. That includes not just other corporations but LLCs, limited partnerships, and reserved names in the Secretary of State's database. Before you commit to signage, a domain, or a logo, run the name.

Search the Illinois business entity search for your exact name and close variations. Names that differ only by punctuation, spacing, an entity indicator, or a filler word like "the" may be treated as the same, so look at the meaning of the name, not just the letters.

Naming rules for Illinois corporations

• The name must contain a corporate indicator — "Corporation," "Incorporated," "Company," "Limited," or an abbreviation such as "Corp.," "Inc.," "Co.," or "Ltd."
• It must be distinguishable from every active and reserved name on file
• It cannot imply a purpose the corporation is not authorized to pursue, such as banking or insurance, without the relevant regulator's approval
• It cannot suggest a governmental affiliation

Reserving a name

If you are not ready to file but want to hold the name, Illinois lets you reserve an available corporate name for a set period for a state fee. A reservation does not create the corporation — it simply blocks others from taking the name while you prepare the rest of your filing.

Before you can file, you must have a registered agent lined up, because the agent's name and Illinois street address go directly on the Articles of Incorporation. The registered agent is the corporation's official point of contact for lawsuits (service of process) and formal state correspondence.

Who can serve

• Yourself — if you have a physical Illinois street address (not a P.O. box) and are available during business hours. Your address becomes part of the public record.
• Another individual — any Illinois resident with an in-state street address, such as a co-founder or attorney
• A commercial registered agent service — a company authorized to act as agent in Illinois, which keeps its address in the public record instead of yours and ensures someone is always present to receive documents

Why the choice matters

The registered office address is public and searchable. If you use your home, that address is exposed to anyone who looks up the corporation, and to process servers. A commercial agent keeps your address private and guarantees availability during business hours, which matters because a missed service of process can lead to a default judgment against the company.

The Articles of Incorporation are what actually create your corporation in Illinois. File online through the corporate filing portal or mail the paper Form BCA 2.10 to the Department of Business Services. The state charges a filing fee plus an initial franchise tax based on the paid-in capital represented by the shares you issue at formation — the receipt card on this page shows the current charges.

What the Articles require

• Corporate name with a valid corporate indicator
• Registered agent and registered office — name and Illinois street address
• Purpose — Illinois accepts a general clause covering any lawful business
• Authorized shares — the total number of shares the corporation may issue and the number issued at formation; this directly affects the initial franchise tax
• Incorporator — name and address of the person filing
• Initial directors — Illinois collects the names and addresses of the first directors

Processing time

Routine online filings are usually processed within about ten business days; mailed filings run roughly five to ten business days after arrival. Expedited service is available for an added state fee and can bring processing down to about one to two business days. The portal adds a small surcharge for credit card payments.

Bylaws are your corporation's internal operating manual. Illinois does not require you to file them with the state, and they never appear in the public record, but the corporation needs them in place before it starts doing real business. Bylaws answer the questions the Articles do not.

What complete bylaws cover

• Board of directors — how many directors, how they are elected, terms, and how vacancies are filled
• Meetings — when and how the annual shareholder meeting and board meetings are called, notice requirements, and quorum
• Officers — the offices (typically president, secretary, treasurer), how they are appointed, and their authority
• Shares — how stock is issued and transferred, and any restrictions on transfer
• Voting — how shareholder and director votes are counted
• Recordkeeping — who keeps the minutes and corporate records, and how amendments to the bylaws are made

For a single-owner corporation, the bylaws confirm that you have a real governance structure — which courts examine when deciding whether to respect the liability shield. For corporations with multiple owners, bylaws (often alongside a separate shareholder agreement) prevent disputes by settling the rules before conflict arises.

After the state approves the Articles, the corporation holds its organizational meeting. This is the founding session where the corporation formally comes to life internally, and it is documented with written minutes that go into the corporate record book.

What happens at the organizational meeting

• Adopt the bylaws approved in the previous step
• Elect or confirm directors and appoint officers (president, secretary, treasurer)
• Authorize and issue shares of stock to the founders in exchange for their contributions of cash, property, or services — this is the moment ownership is actually distributed
• Approve opening a corporate bank account and authorize signatories
• Adopt an accounting year and any initial resolutions the company needs

Issuing stock is the step that turns "authorized shares" on the Articles into actual ownership. Record each shareholder's name, the number of shares, and what they paid, and issue stock certificates or a documented ledger entry. This paper trail is what proves who owns the company and underpins everything from taxes to a future sale.

Every corporation needs a federal Employer Identification Number, a nine-digit tax ID issued free by the IRS. A corporation cannot use an owner's Social Security number the way a single-member LLC sometimes can — it always needs its own EIN to file returns, open a bank account, and hire.

How to apply

Use the IRS EIN Assistant online at IRS.gov to submit your request. Expect the form to run about ten minutes, with the number granted on the spot — print the confirmation and it's usable that same day. You need a responsible party with a US Social Security number or ITIN to complete the online application; those without one apply by fax or mail on Form SS-4.

Choosing your tax treatment

By default the IRS taxes your corporation as a C corporation, which pays tax at the entity level. If you qualify and it fits your situation, you can elect S corporation status by filing Form 2553, which shifts to pass-through taxation and can reduce self-employment tax on owner-employees. This is a decision to make with a CPA, because it affects payroll, distributions, and how profits are taxed.

With the filed Articles, your EIN, and your bylaws, open a dedicated corporate bank account. Keeping corporate and personal money completely separate is not optional — commingling is one of the fastest ways to lose the liability protection you incorporated to get.

Annual report and franchise tax

Illinois corporations file an annual report and pay a franchise tax each year, due by the first day of the corporation's anniversary month. File through the Secretary of State's portal. The report updates the state's record of your registered agent, officers, directors, and issued shares. Missing the deadline accrues penalties and interest and eventually leads to administrative dissolution.

Keep the registered agent and records current

If your agent changes, file the change promptly. Hold your annual shareholder and director meetings, keep minutes, and maintain the stock ledger. These formalities are the ongoing price of the corporate liability shield.

Taxes and licenses

File the corporation's federal return (Form 1120, or 1120-S if you elected S status) and the Illinois corporate income tax return. If you sell taxable goods, register with the Illinois Department of Revenue for sales tax. Many industries and localities require additional licenses that are separate from your incorporation.