Illinois

Illinois Business License, LLC Formation, and Incorporation

Illinois is home to the nation's largest inland transportation hub and port, and home to more than 30 Fortune 500 companies, including Boeing, Walgreens and McDonald's. Hundreds of others maintain headquarters in the State. There are also more than 500,000 small businesses who choose to incorporate in Illinois. Illinois' economy is the fifth largest in the nation and 19th largest in the world, and its high-tech and start-up economy has been ranked among the top ten nationwide.

How to Incorporate in Illinois

If you decide to incorporate in Illinois, The Company Corporation will take care of all the details. We'll research the availability of your company name and help you prepare and file your Articles of Incorporation with the Illinois Secretary of State and pay your initial franchise tax. We can also take care of many of your company's follow-up needs, including annual report preparation and filing.

Below is an overview of how to incorporate a business in Illinois:

Select a Business Name

The first step to incorporate in Illinois is to select an original name not already in use by another business in the state. Illinois requires corporations to have names that can't be confused with the names of any corporation or LLC in Illinois, assumed corporate or limited liability company, not-for-profit, or reserved or registered names.

Permitted designations: Illinois corporate names may be followed by several approved designations, including:

  • Co.
  • Company
  • Corp.
  • Corporation
  • Inc.
  • Incorporated
  • Limited
  • Ltd.

Restricted designations: The use of certain words and phrases in corporate names is considered "restricted" in Illinois, meaning they require special approval by the state. These include:

  • Engineer
  • Engineering
  • Insurance
  • Union
  • Bank
  • Banker
  • Banking

When the business name is different from the owner's full legal name, Illinois' "Assumed Name Act" requires you to register the business name with your county clerk's office, regardless of your entity type.

File Articles of Incorporation

Once we have verified your company name, The Company Corporation will file your Articles of Incorporation with the Illinois Secretary of State. The Filing includes the following information:

  • Corporation information: The name and purpose of the corporation.
  • Directors: Although Illinois business registration requires that a corporation have at least one director, director names and addresses are not required on the Articles of Incorporation. There is an option to provide the number of directors constituting the initial board of directors and the names and addresses of persons serving as directors until the initial shareholders meeting, but this information is not required.
  • Incorporators: The names, addresses and signatures of all incorporators. (If a corporation acts as an incorporator of an Illinois business registration, the name and state of incorporation are listed, and an officer of the corporation signs on behalf of the company.)
  • Stock: The share class, the number of shares authorized, the number of shares proposed to be issued and consideration to be received thereof, with the total value. You will also be required to state the preferences, qualifications, limitations, restrictions and special or relative rights in respect of the shares of each class. Note that an increase in the number of shares can affect initial filing fees, due to the franchise tax.
  • Registered Agent: The name and street address of a registered agent in Illinois. The registered agent is the person to whom the state will send all official correspondence.
  • Other provisions: Authorization of preemptive rights, denial of cumulative voting, regulation of internal affairs, voting majority requirements, director qualifications etc. can be attached on a separate sheet.

If you intend to hire employees or open a bank account, you will need a federal Employer Identification Number (EIN). The Company Corporation can help expedite this step as well.

Pay Franchise Tax

To incorporate in Illinois, the state charges a franchise tax at the time of incorporation. The initial franchise tax is assessed at the rate of 15/100 of 1 percent ($1.50 per $1,000) on the paid-in capital represented in Illinois. The minimum initial franchise tax is $25.

Register with the Illinois Department of Revenue

You are required to register your business with the Illinois Department of Revenue by completing the REG-1 State of Illinois Business Registration Application before you make any purchases, sales, or hire employees. Once you have filed your registration, the Department of Revenue will issue you a Certificate of Registration, which must be displayed in a prominent location at your business.

The REG-1 form asks for comprehensive information about your company and its activities, including schedules that correspond to specific business activities, such as liquor information or cigarette and tobacco products information.

Costs and Fees to Incorporate in Illinois

The state filing fee to incorporate in Illinois is $125.00, plus the initial franchise tax of at least $25.00. It typically takes 7-10 business days for Illinois business registration. Expedited filings, which require an additional fee, typically take 24 hours.

The Company Corporation will handle all filing requirements, calculate your franchise tax, and provide you with the total cost to get your business up and running in Illinois.

Annual Reports

Your corporation must file an annual report with the Illinois Secretary of State by the first day of the month that marks the anniversary of incorporation. The filing fee is $75.

Only company officers are authorized to sign annual reports. Emailed or faxed signatures are accepted.

If you need a filing extension, you may apply for an extended filing month. This then becomes your anniversary for annual filing, replacing the date of your initial Illinois business registration.

If you make any changes to issued shares and paid-in capital, you will also need to file a Cumulative Report, and may have to pay additional franchise tax and fees.

FAQs

Do I need to reserve a name?

Illinois does not require name reservation; however, it is a good way to ensure that your company name is available, and will remain available while you file to incorporate in Illinois.

If I incorporate in Illinois, do I have to locate my principal office in the state?

No. Illinois permits a corporation's principal office to be located outside of the state.

Do I need to submit bylaws?

No, you won't need to submit bylaws. Nevertheless, when considering how to incorporate a business in Illinois, drafting your corporation's bylaws are a critical step in forming your company, as they are blueprint that you will use to govern operations.

Does Illinois have publication requirements or other follow-up filings?

No. You are not required to publicize your Illinois business registration, and there are no follow-up filing requirements.

Ready to Incorporate in Illinois? Get Started

How to Start an LLC in Illinois

If you decide upon forming an LLC in Illinois, The Company Corporation will take care of all the details. We'll research the availability of your company name and help you prepare and file your Articles of Organization with the Illinois Secretary of State. We can also take care of many of your company's follow-up needs, including annual report preparation and filing.

Below is an overview of the process of forming an LLC in Illinois:

Select a name for your LLC

Illinois LLC names may be followed by several approved designations, including: L.L.C., LLC or Limited Liability Company.

The state requires that, when forming an LLC in Illinois, an entity must choose a name that can't be confused with any other corporate or limited liability company, assumed corporate or limited liability company, not-for-profit, or reserved or registered names on file with the Secretary of State.

The use of certain words within a business name is "restricted" when setting up an LLC in Illinois, meaning special approval by the state is required. These include:

  • Insurance
  • Olympic
  • Olympiad
  • Paralympic
  • Paralympiad
  • Citius Altius Fortius
  • CHICOG
  • Chicago 2016

The state of Illinois prohibits the use of certain words in the names of LLCs, including:

  • Union
  • Corporation
  • Corp
  • Incorporated
  • Inc.
  • LTD.
  • Co.
  • Limited Partnership
  • LP

The Company Corporation will do the necessary research to make sure your company's name meets the state standards.

File Articles of Organization

Once we have verified your company name, The Company Corporation will file your Articles of Organization. The Filing includes the following information:

  • Illinois LLC Information: The Articles must include the LLC's name and address (a post office box or care-of address is not acceptable), purpose, and dissolution date, if there is one.
  • Members/Managers: You will need to indicate whether your LLC will be managed by members or managers. Your LLC must have one or more members/managers, and their names and addresses must be listed on the Articles of Organization.
  • Organizer: You will need to list the name and address of at least one organizer, and include a signature.
  • Registered agent: An LLC in Illinois must list the name and address of a registered agent with a physical address (no post office boxes) within the state. The registered agent must be available during normal business hours to accept important legal and tax documents for the business.
  • Effective date: The date on which the Articles of Organization become effective. This can be either the filing date, or a later date specified on the Articles. The later date cannot be more than 60 days after the filing date.
  • Other provisions: You have the option of including additional provisions for regulating the internal affairs of the LLC.

If your Illinois LLC has more than one member, you will need a federal Employer Identification Number (EIN), even if it has no employees. The Company Corporation can help expedite this step as well.

Register with the Illinois Department of Revenue

You are required to register your business with the Illinois Department of Revenue by completing the REG-1 Illinois Business Registration Application before you make any purchases, sales, or hire employees. Once you have filed your registration, the Department of Revenue will issue you a Certificate of Registration, which must be displayed in a prominent location at your business.

The REG-1 form asks for comprehensive information about your company and its activities, including schedules that correspond to specific business activities, such as liquor information or cigarette and tobacco products information.

Costs and Fees to form an LLC in Illinois

The state filing fee for starting an LLC in Illinois is $500.00. It typically takes about two weeks to form an LLC in Illinois. Expedited filings, which require an additional fee, typically take 24 hours, although it might take a few days.

The Company Corporation will handle all filing requirements, calculate your franchise tax, and provide you with the total cost to get your business up and running in Illinois.

Annual Reports

Your Illinois LLC must file an annual report with the Illinois Secretary of State the day before the first day of the month that marks the anniversary of your initial filing. For example, if your filing date was April 10th, your annual report is due by March 31st. The Illinois annual report filing fee is $250.

Only a members or managers are authorized to sign annual reports. Emailed or faxed signatures are accepted.

If you need a filing extension, you may apply for an extended filing month. This becomes your anniversary for annual filing.

FAQs

Do I need to reserve a name?

When considering how to incorporate in Illinois, it is important to note that although Illinois does not require name reservation, doing so is a good way to ensure that your company name is and will remain available while you form your State of Illinois LLC.

If I incorporate in Illinois, do I have to locate my principal office in the state?

No. Illinois permits a corporation's principal office to be located outside of the state.

Do I need to submit an operating agreement?

No, you won't need to submit an operating agreement to form your State of Illinois LLC. Nevertheless, drafting your operating agreement is a critical step in forming your company, as it is blueprint that you will use to govern operations.

Does Illinois have publication requirements or other follow-up filings?

No. Illinois does not require you to publicize your company's formation, and does not have follow-up filing requirements.

Ready to Incorporate in Illinois? Get Started

Before your business can legally begin to operate, you must satisfy its license, permit, and tax registration requirements. Almost all state, county, and local governments require businesses to obtain one or more licenses and permits. The requirements vary by your industry and location.

State of Illinois Business Licenses and Permits

In the State of Illinois, business license application and registration is handled by county and local governments. The type of license required depends on your place and type of business. Examples of requested Illinois business registrations and licenses include:

  • Car Dealer & Remitter Licensing
  • Liquor Licenses
  • Securities & Loan Business Broker, Dealer, or Advisor Licensing
  • Grain Warehouses, Dealers, Buyers, & Agricultural Cooperatives Licensing

Occupational Licenses and Permits

The Illinois Department of Financial and Professional Regulation (IDFPR) is the main licensing agency for the State of Illinois for most professions and for financial institutions. In addition to standard Illinois business licenses, individuals must obtain any occupational licenses and permits prior to conducting business. The IDFPR maintains an extensive list of professions that require licenses with the requirements for each profession. For example, an athletic trainer must be able to provide proof of graduation from an approved athletic training program, proof of current certification in CPR, and pass a state exam in order to become a licensed trainer.

Environmental Licenses and Permits

You may need construction or safety permits, or environmental licenses for some business activities. The Illinois Department of Environmental Protection issues permits for business activities that may impact the state's air, water or land. Numerous industries, including automotive repair, dry cleaning, manufacturing, printing and others are tightly regulated by complicated environmental regulations.

Advertising Restrictions

Many communities in Illinois restrict advertising, regulate pricing or require zoning permits. When planning your Illinois business registration, contact your city or county clerk for information on local restrictions.

Employee Requirements

If you have at least one employee, you are required to address the issue of employer insurance. Employees also trigger numerous tax requirements.

  • Unemployment Insurance: You are required to make unemployment insurance contributions to the Illinois Department of Employment Security (IDES) if you have: 1) employed one or more workers in each of 20 or more calendar weeks; or 2) paid at least $1,500 in total wages during the calendar quarter.
  • Workers' Compensation Insurance: Under the Workers' Compensation and Workers' Occupational Diseases Acts, an employer is required to provide insurance for accidental deaths, injuries and occupational diseases of employees arising in the course of employment. Temporary workers who normally do not receive company benefits are still provided workers' compensation. Insurance generally is purchased through private companies. Companies can apply to the Workers' Compensation Commission to become self-insured.

Local Tax Registration and Requirements

Some municipalities and counties in Illinois levy their own taxes in addition to the state and federal taxes that most businesses are responsible for. You should contact your local revenue department to determine if additional taxes apply to your business.

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