How To Form A Company In Illinois

With our 5-step process, forming a company in Illinois is simple. A company may be formed by submitting formation paperwork with your state and forming a board of directors.

We’ll teach you how to form your own company in Illinois.

In Illinois, it is simple to form a corporation.

To get started, follow the steps in our How to Start a Corporation in Illinois tutorial below:

Step 1: Give Your Illinois Corporation a Name

Step 2: Select a Registered Agent.

Hold an Organizational Meeting in Step 3

Step 4: Submit your Articles of Incorporation.

Step 5: Obtain an EIN

Step 1: Give Your Illinois Corporation a Name

The first step in forming a company is to choose a business name. You must choose a distinct name that conforms with Illinois company naming regulations.

1. Illinois naming conventions:

The terms “corporation,” “business,” “incorporated,” “limited,” or an abbreviation of one of those phrases must appear in your name.

Your name must be distinct from any other businesses in your state. This contains reserved names in Illinois.

Without the permission of the state Commissioner of Banks and Real Estate, your name cannot contain any phrases that imply the company is in the banking, insurance, or corporate fiduciary industry.

If appropriate, the name must include:

include the term “trust” if it is set up to accept and carry out trusts

If it is a pawners’ organisation, it must include the term “pawners.”

If it is established as a cooperative organisation for monetary profit, it must include the term “cooperative.”

Your company’s name cannot include terms that may be confused with a government organisation (FBI, Treasury, State Department, etc.).

Unless you register under an assumed name, your name must be the name under which your firm does business.

For further information, see the Illinois state legislation on corporate name rules.

2. Is my business name accessible in Illinois?

Your Illinois company name must be distinct and distinct from existing Illinois business names. To see whether your selected company name is available, use the Illinois Secretary of State’s Business Search Portal.

Visit our How to Name a Business guide and pick Illinois from the drop-down box for additional information on Illinois corporation name searches.

3. Is the URL accessible?

Before incorporating in Illinois, check to determine whether an appropriate URL for your selected company name is available. Even if you don’t intend to create a company website right immediately, we recommend purchasing a web domain right away to avoid other companies from obtaining it.

Step 2: Select a Registered Agent in Illinois.

When you file your company with the Secretary of State, you must choose an Illinois registered agent.

What exactly is a Registered Agent? A registered agent is a person or organisation chosen by an LLC or corporation to accept service of process, government communications, and compliance paperwork on behalf of a company.

Who Is Eligible to Be a Registered Agent? An person, a corporate organisation, or a professional registered agent service may serve as your registered agent. Any organisation or individual may act as your Illinois registered agent as long as the person:

is at least 18 years old

has a physical address in the state where business is done

is accessible during regular business hours (in person).

Step 3 Hold an Organizational Meeting

Before filing the Articles of Incorporation formally in Step 4, you must conduct an organisational meeting to perform the following tasks:

Complete and sign the Articles of Incorporation.

Establish and approve bylaws

Choose your first director (s)

Determine your ownership structure.

Fill out an Incorporator’s Statement.

Establish and Approve Corporate Bylaws

Bylaws are the rules that regulate and control how your organisation is governed and operated. Consider the bylaws to be your corporation’s constitution. It clarifies the norms and priorities for all parties involved.

The bylaws of a company will augment any regulations established by the federal government or the state.

Include the following in your bylaws:

The governance of the company, including the roles of directors and officials

Meeting processes, voting procedures, and the election of executives or directors

How will records be preserved and managed?

How will disagreements be resolved?

How will bylaws be added/modified in the future?

The annual shareholder meeting date

Contract Negotiation Techniques

Fiduciary responsibilities to the company (i.e. acting in the best interests of the corporation)

What is a quorum for voting purposes?

What exactly is a quorum? A quorum is the minimal number of members who must be present at a meeting in order for the meeting’s actions, including any votes, to be legitimate.

Appoint the First Directors

At least one director must be appointed to monitor your Illinois company until the first shareholder meeting.

A corporate director is in charge of operational bylaw adoption, modification, and repeal, as well as the election, monitoring, and removal of officers.

Following the incorporation of the company, the incorporator(s) — or initial director(s), if listed on the formation papers — shall convene an organisational meeting. During this inaugural meeting, either the incorporator(s) or the initial director(s) will elect the board of directors.

Selecting a Share Structure and Strategy

A share of stock is a corporation’s unit of ownership. Each share of stock reflects a proportion of the company’s ownership. If a business issues one share of stock, the shareholder (stock owner) owns 100% of the corporation.

Shares may be divided into classes. Each class, known as a share class, has unique rights and advantages. There may be several classes, and each class can have an unlimited number of shares.

The Articles of Incorporation form in Illinois enables you to specify whether the company will issue more than one approved share class.

NOTE: We suggest that you begin with a large number of authorised shares. Many lawyers advocate for a million dollars. Starting with a large number allows you to issue shares as required without incurring legal expenses to enhance your original permitted share size.

Make and implement an Incorporator’s Statement

The incorporator(s) shall sign and preserve an Incorporator’s Statement with the full names and addresses of all initial directors in the corporate records book.

This document identifies the first director(s) who will serve until the board of directors is chosen at the first shareholder meeting. It should be kept with the rest of your company’s records.

Step 4: Submit the Articles of Incorporation to the State of Illinois.

To form a company in Illinois, you must submit the Illinois Articles of Incorporation. The Articles of Incorporation are the legal documents that establish your Illinois company. You may submit it with the Illinois Secretary of State online, via mail, or in person. The fee for filing is $150. If you file a physical copy, you must submit the completed form in duplicate.

This paper will address the fundamentals of your company, such as:

Statement of mission and corporate name

Name and street address of the corporate registered agent

The number of authorised shares that a company may issue.

Name(s) and address of the director(s) (es)

Name(s) and address of incorporator(s) (es)

The projected worth of one’s property

The estimated total value of business

 Step 5 Get an EIN for Your Illinois Corporation

What exactly is an EIN? The federal government uses an Employer Identification Number (EIN) or Federal Tax Identification Number (FTIN) to identify a company organisation. It is effectively the company’s social security number.

Why do I need an EIN? An EIN is necessary for the following activities:

To establish a commercial bank account for the firm

In terms of federal and state taxation

To recruit workers for the firm

How can I get an EIN? After founding the firm, the business owner obtains an EIN from the IRS (free of charge). This may be done online or in the mail.