How to Form a Corporation in Illinois: What the Articles of Incorporation Actually Ask

Filing articles of incorporation in Illinois takes about twenty minutes and costs $150 plus a tax most people have never heard of.

The form asks eight things. Seven are facts you already know. One of them, buried in the middle, is a tax decision dressed up as a paperwork question, and getting it wrong is the most expensive mistake available to a new Illinois corporation.

This is that form, field by field, plus what happens in the years after you file it.

One note before we start. Lobi Space is not a law firm and this is not legal or tax advice. We are a Chicago workspace that has operated in Pilsen since 2015, we act as registered agent for Illinois companies, and our front desk signs for service of process. What follows is operator-level explanation of a public filing. Anything involving share structure, valuation, or your own tax position belongs with an attorney or a CPA.

Should it be a corporation at all

Most small Illinois businesses should form an LLC, and we say that as a company that will happily file either one for you.

An LLC gives you the same liability protection with less machinery: no shares, no board, no bylaws, no annual meeting, and no franchise tax. If you are a consultant, a contractor, a shop, a studio, or two people splitting profits, start with how to set up an LLC in Illinois and stop reading here.

A corporation earns its extra paperwork in four situations:

• You plan to raise money from investors. Venture funds buy stock. They do not buy LLC membership interests, and asking them to is a conversation that ends early.
• You want to issue equity to employees. Option pools are a corporate structure. LLCs can approximate it, awkwardly.
• Your profession requires it. Some licensed practices organize as professional corporations. If you are a physician, attorney, CPA, architect, or similar, ask your licensing board before choosing a form.
• You want the S corporation tax treatment on a corporate chassis. An LLC can elect S corp treatment too, so this reason is weaker than the internet suggests, but it exists.

If none of those describe you, the LLC is the cheaper, quieter choice. If one of them does, keep going.

The eight things the articles must contain

Illinois articles of incorporation are filed on Form BCA 2.10 with the Secretary of State. The statute that governs what goes in them is 805 ILCS 5/2.10, and the Secretary of State publishes the form itself, with instructions, under Business Services at ilsos.gov. Download it before filling it in: the state's forms are fillable PDFs, and completing one inside a browser preview pane can print blank.

Required, per the statute:

1. The corporate name. Rules below, and they are stricter than people expect.

2. The purpose. You may use the catch-all: the transaction of any or all lawful businesses for which corporations may be incorporated in Illinois. Use it. A narrow purpose clause is a future amendment waiting to happen.

3. The initial registered office address and initial registered agent name. A real Illinois street address. More below.

4. The name and address of each incorporator. The incorporator is whoever signs the articles into existence. It can be you.

5. The number of shares of each class the corporation is authorized to issue.

6. The number and class of shares the corporation proposes to issue, and the consideration to be received for them.

7. Class details, if you are creating more than one class of stock: designations, preferences, qualifications, limitations, restrictions, and relative rights.

8. Series information, if any class is divided into series, or if the board is being given authority to establish them.

Items five and six are the ones to slow down on, and the difference between them is the whole ballgame.

Optional, and worth knowing because most guides imply otherwise: the names and addresses of your initial directors. Illinois says the articles *may* contain them. You are not required to name a board in the filing. Duration is also optional, and if you say nothing, your corporation is perpetual.

The shares question is a tax question

Here is the part almost nobody explains.

Authorized shares are the ceiling: the maximum number your corporation is allowed to issue, ever, without amending the articles. Authorizing a large number costs you nothing at the state level, and it buys you room to issue stock later without a filing.

Shares proposed to be issued, and the consideration to be received, is different. That is the stock you are actually handing out now and the money or property coming in for it. That consideration figure becomes your paid-in capital.

And paid-in capital is the base Illinois computes franchise tax on.

The rate lives at 805 ILCS 5/15.45: one tenth of one percent, which is 0.001, a dollar per thousand, on paid-in capital allocated to Illinois. There is a $25 statutory minimum and a $2,000,000 ceiling. Since January 1, 2025, 805 ILCS 5/15.35 exempts the first $10,000 of franchise tax liability, which for most small corporations wipes out the computed tax entirely.

So the practical rule: authorize generously, issue conservatively. Authorizing ten million shares and issuing a thousand of them for $1,000 total is a perfectly ordinary Illinois filing. Authorizing ten million and issuing ten million at a dollar each puts $10,000,000 of paid-in capital on your record, and you have created a recurring tax obligation on day one for no reason.

This is also the mistake that is genuinely painful to undo. Paid-in capital is reported to the state every year on your annual report, and it does not go down because you wish it were lower.

How the $25 minimum and the $10,000 exemption interact on a first filing is exactly the kind of question the statute does not answer cleanly, and neither does the Secretary of State's fee schedule, which prints no rate at all. Get your actual number from the Department of Business Services at 217-782-6961 or from your CPA rather than from any article, this one included.

What it costs, and where the numbers come from

Two things about that table worth saying plainly. Expedited service is an add-on, not an alternative price, and both of the Secretary of State's fee schedules state that expedited requests on paper filings must be made in person at the Springfield or Chicago office. For a Chicago business that counter is at 160 N. LaSalle Street, open Monday to Friday, 8 a.m. to 4:30 p.m., which is a train ride rather than a drive to Springfield. And cash is not accepted: checks payable to the Illinois Secretary of State.

Directors, officers, and bylaws: what the state sees and what it does not

Illinois requires exactly one director. The statute is unambiguous at 805 ILCS 5/8.10: the board of directors shall consist of one or more members. There is no residency requirement in that section and no requirement that a director own stock. One person can incorporate, serve as sole director, and hold every officer title.

The number of directors can be fixed in your articles or your bylaws, and bylaws are the easier place, because changing them does not require a state filing. Illinois also allows a variable range, with a maximum spread of five between the minimum and the maximum.

Bylaws are not filed with the Secretary of State. Neither are your stock certificates, your shareholder list, your meeting minutes, or your resolutions. That surprises people who expect the state to hold their corporate records. It does not. Illinois holds your articles, your annual reports, and your registered agent, and nothing else.

Which means the documents nobody checks are the documents that decide whether your corporation holds up under scrutiny later. A bank opening your account will ask for bylaws and a resolution authorizing the account. A buyer doing diligence will ask for minutes. An opposing attorney will ask for all of it. Corporations that skip the internal paperwork are fine right up to the first moment somebody reads it closely.

At minimum, before you spend money through the company: adopt bylaws, hold an organizational meeting of the board (even a board of one), issue the stock you said you would issue in the articles, and appoint your officers. Then keep the record.

The registered agent, and why the address matters

Every Illinois corporation must maintain a registered agent with a registered office in Illinois. The requirements are narrower than people assume:

• A real street address in Illinois. A P.O. Box on its own is not acceptable.
• Available during business hours, because this is where a process server comes.
• A corporation cannot act as its own registered agent. The forms say it flatly.
• If a business entity serves as your agent, it has to be registered with the Secretary of State.

One small trap from the form itself: the registered office address field is limited to 30 characters including spaces. Count yours. A long suite line on a long street name gets abbreviated whether you planned it or not.

You can name yourself, and that is legal and free if you are reliably at that address from nine to five. Two costs come with it. The address goes on the public record permanently, and it is where a lawsuit gets hand-delivered, possibly in front of a client.

What actually happens when the state or a court needs to reach your corporation is worth being concrete about. The notice of delinquency that starts a dissolution clock goes to your registered office by regular mail, not certified, with no proof of receipt. Service of process arrives with a human being who needs a human being to hand it to.

"In many cases these documents are hard time-sensitive," says Oliver, Director of New Business at Lobi Space. "Unless you respond, you may be liable for legal consequences."

That is the job our front desk does. Staff sign for it, log it, scan it, and the member hears from us the same day rather than whenever they next stop by. Certified letters for member attorneys handling client matters, government correspondence, lawsuits, special process service: ordinary Tuesday work here since 2015.

Our Illinois registered agent service is $95 a year on its own, or $78 a year alongside any virtual office or mailbox plan, and it includes same-day scans of anything served plus free annual report reminders. If you would rather be your own agent, we wrote up the honest tradeoffs.

One more point specific to corporations: your registered office and your business address do not have to be, and arguably should not be, the same thing. The registered office is where legal papers land. Your business address is what goes on the bank application, the license, the Google listing, and the invoices. Keeping them separate is ordinary practice, and it is why many of our members use us for both roles deliberately rather than by accident.

After you file: the two clocks that matter

A corporation that exists is not a corporation in good standing. Two obligations run forever, and one of them dissolves you if you ignore it.

The annual report. Form BCA 14.05 D if you are an Illinois corporation, BCA 14.05 FOR if you formed elsewhere and registered here. $75, plus franchise tax. It is due before the first day of your anniversary month, meaning the month the state approved your corporation, and the filing window opens 60 days earlier under 805 ILCS 5/14.10. Incorporated in June? Due May 31, every year. Incorporated in January? Due December 31 of the previous calendar year, which is where people get caught. The full mechanics, including the franchise tax arithmetic, are in our Illinois annual report guide.

One corporate-only option almost nobody knows about: Form BCA 14.01, Statement of Election to Establish an Extended Filing Month, $25. A corporation can move its filing month. If your anniversary lands in your busiest week, or two weeks after your fiscal year closes when your paid-in capital figures are still moving, twenty-five dollars buys you a calendar you can work with. The election affects how your franchise tax period is measured, so raise it with your CPA rather than filing on a hunch.

The franchise tax. Reported with the annual report, computed on paid-in capital allocated to Illinois. Note the reporting date, because it is unusual: under 805 ILCS 5/14.05 you report shares and paid-in capital as of the last day of the third month preceding your anniversary month. A September anniversary means June 30 figures.

Miss the report and the consequences are specific. Illinois declares you not in good standing, which means the Secretary of State stops filing anything else for you: no amendment, no name change, no registered agent change, and no certificate of good standing, which is exactly what your lender is about to request. The corporate late charge runs on delinquent franchise tax at 10% plus 2% interest per month under 805 ILCS 5/16.05, so there is no flat dollar penalty to quote, and for a corporation owing no franchise tax the penalty math can come out at zero.

Which is the trap. Being late is nearly free right up until it is not: after the notice of delinquency, a corporation gets 90 days to cure under 805 ILCS 5/12.40, and then the state dissolves it. A dissolved corporation, in the statute's own words, shall not thereafter carry on any business except to wind up.

Reinstatement costs $200 plus every back report and penalty, and it is retroactive, which is why reinstating almost always beats forming a fresh entity. But your corporate name is only protected for three years after dissolution under 805 ILCS 5/12.43.

The Chicago part

Forming the corporation and licensing the business are two different governments, and finishing the first does not start the second.

The corporation is state paperwork with the Secretary of State. A business license is city-level, and most businesses operating in Chicago need one from the Department of Business Affairs and Consumer Protection. The category and cost depend on what you actually do: ordinary office-type work generally falls under the Limited Business License, while inspected activity such as food is a different process entirely.

Whether a virtual office address can carry a Chicago license, and which business types qualify, is its own subject, and we wrote the guide.

The EIN and the S corp election

Your corporation needs an EIN before it can open a bank account, hire anyone, or file a return. Apply directly with the IRS: it is free, online, weekday hours only, and issues the number immediately. The confirmation letter it produces, called a CP 575, is issued exactly once, and it is what your bank will ask to see, so save the PDF the moment it appears. If you lose it, the replacement is a 147C letter requested by phone, because the IRS never reprints the original.

If you want S corporation tax treatment, the election is IRS Form 2553, and the deadline is the part that catches people: within two months and fifteen days of the beginning of the tax year you want it to apply to. That is why the S corp conversation happens early in the year rather than at tax time. Whether it saves you money depends on your profit and your reasonable salary, which is a CPA question, not a filing question.

Then the bank. Illinois corporations get declined at account opening for predictable reasons, and we listed all of them in what you need to open a business bank account in Illinois. The short version: bring the stamped articles, the bylaws, a resolution authorizing the account, the EIN letter, ID for everyone signing, and an address that is not a P.O. Box.

You can do this yourself, and you should still make one call

Let us be straight about something, because most pages on this topic are a lead form with paragraphs around it.

You can do all of this yourself. Research it, go to ilsos.gov, and file. Twenty minutes, $150, and a form that was written for owners rather than intermediaries. Nobody has to do it for you.

Even so, at least the first time, it is worth an hour with an attorney or a CPA. Not because incorporating is hard. It is not. The difficulty arrives later, in disputes, amendments, and corporate documentation, when the share structure you picked in ten minutes has to hold up under somebody else's lawyer reading it closely. Professional help does not cost much. A share structure that has to be unwound two years later does.

Here is the specific thing to get right, and it is the reason this section exists. Whatever you set up initially has to match what the Internal Revenue Service has, and both have to match your own internal records. The corporate name, the responsible party on the EIN, the officers, the shares actually issued. State filing, IRS record, and bylaws and minutes: three sets of records that start out agreeing and then drift, because an officer leaves and only the minutes get updated, or the company starts using a shortened name that was never filed as an assumed name. Nothing announces the drift. It surfaces when a bank, a buyer, an auditor, or opposing counsel lines the three up side by side.

That is Oliver's view as Director of New Business here, and it is ours: file it yourself if you want to, and have somebody who has seen it before read the documents once.

If you would rather hand the filing off, our Illinois formation service prepares and files the same documents at your direction, with the registered agent and the business address handled at the same building by people you can call. We are not a law firm and we do not give legal advice, so for the bylaws and anything that reads like a judgment call, bring a lawyer.

One thing to do today

Before you pick a name, run it through the state's business entity search by keyword rather than exact match, and read what comes back. Illinois only treats names as different when they are distinguishable by sight, so a comma, a plural, or swapping Inc for Corp will not save you, and a dissolved corporation's name stays locked up for three years.

Ninety seconds now, or a rejected filing and a second $150 later.