How to Start a C Corp in Illinois

(November 2024)

In This Article

Introduction

Thinking about launching a business that’s built for growth, credibility, and long-term success? Starting a C Corporation in Illinois gives you the power to structure your business in a way that attracts investors, protects your personal assets, and positions you to scale. This isn’t just another small venture—this is your chance to create something that could grow into an empire, with the flexibility to go public or expand globally if you choose.

The first step is naming your corporation—something unique and memorable that aligns with your vision. Once that’s done, file the Articles of Incorporation with the Illinois Secretary of State, officially establishing your business. This step sets the foundation for your company’s legal structure, giving it the credibility it needs.

Apply for an Employer Identification Number (EIN) from the IRS to handle taxes and payroll. From there, it’s time to create bylaws, which can outline how your corporation operates and keep everything running smoothly. Don’t forget to hold your first board meeting to elect officers and approve key decisions.

Starting a C Corp. in Illinois puts you in the driver’s seat of a business built for big things. Are you ready to take control and make your mark?

1. Acquire a Corporate Name

To start a C. Corp in Illinois, pick a name for your corporation. This name is important because it’s how people recognize your business. Here are some things to keep in mind:

  • Uniqueness: Your corporate name must be unique and not already in use by another business in Illinois. You can check the availability of your desired name by searching the Illinois Secretary of State’s business name database.
  • Legal Requirements: The name must include one of the following words or abbreviations: “Corporation,” “Company,” “Incorporated,” or “Limited” (or its abbreviations: Corp., Co., Inc., Ltd.).
  • Reservation: If you find a name you like and it’s available, you can reserve it for 90 days by filing an Application for Reservation of Name and paying a small fee.

2. Hire a Registered Agent

Next, you need to appoint a registered agent who can receive legal documents on behalf of your corporation. 

The agent can be an individual who lives in Illinois or a business authorized to do business in Illinois.

Also, the registered agent must have a physical street address in Illinois (not a P.O. Box) and be available during normal business hours to receive documents.

You can be your own registered agent but choose a professional service to ensure reliability.

3. File Articles of Incorporation

Now, it’s time to make your corporation official by filing the Articles of Incorporation with the Illinois Secretary of State. This document includes important details about your corporation. 

To file this Article of Incorporation, provide the corporate name, the purpose of the corporation, the number of shares the corporation is authorized to issue, the name and address of the registered agent, and the names and addresses of the incorporators.

Get ready to pay a filing fee of $105 and an additional $25 franchise tax when you submit your Articles of Incorporation.

4. Create Corporate Bylaws

Now that your C Corp exists legally, you need to set up some corporate rules and procedures. These are called Bylaws, and they outline how your company runs. The bylaws aren’t filed with the state, but you need them to stay organized and show banks or investors that you’re running a legit operation.

  • Structure and Management: Bylaws should outline the structure of the corporation, including the roles and responsibilities of directors and officers.
  • Meetings: It must specify how and when meetings are held, including annual meetings and special meetings.
  • Voting Procedures: Bylaws should detail the voting procedures for making decisions, including how many votes are needed to pass a resolution.
  • Amendments: Include a process for amending the bylaws as needed.

5. Hold an Organizational Meeting

Once your bylaws are in place, you need to hold an organizational meeting. This is the first official meeting of the corporation, where important initial decisions are made. Here’s what happens:

  • Adopt Bylaws: The board of directors formally adopts the bylaws.
  • Appoint Officers: Appoint the initial officers of the corporation, such as the president, secretary, and treasurer.
  • Issue Stock: Issue stock certificates to the initial shareholders.
  • Record Minutes: Keep detailed minutes of the meeting, documenting all decisions made.

6. Issue Stock

Issuing stock is a crucial step for a C Corp. This is how ownership in the corporation is divided among shareholders. Here’s what you need to do:

  • Stock Certificates: Prepare and issue stock certificates to the initial shareholders. Each certificate should include the shareholder’s name, the number of shares, and the date of issuance.
  • Stock Ledger: Maintain a stock ledger to keep track of all issued shares and transfers of ownership.
  • Compliance: Ensure compliance with state and federal securities laws when issuing stock.

7. Obtain an EIN and Comply with Tax Requirements

Ensure you obtain an Employer Identification Number (EIN) from the IRS and comply with various tax requirements. 

  • EIN: Apply for an EIN online through the IRS website. This number is used for tax purposes and is required to open a business bank account.
  • State Taxes: Register for Illinois state taxes, including sales tax, if applicable. You can do this through the Illinois Department of Revenue.
  • Annual Reports: File an annual report with the Illinois Secretary of State to keep your corporation in good standing. There is a filing fee for this report.
  • Corporate Taxes: Pay federal and state corporate income taxes. Consult with a tax professional to ensure compliance with all tax obligations.

8. Open a Business Bank Account and Handle Required Permits

You don’t want to mix your personal money with your business money, so opening a separate bank account is essential. Take the Certificate of Incorporation, your EIN, Bylaws (the bank may ask to see them), and resolution from your organizational meeting authorizing the bank account. 

Once your bank account is open, you can accept payments, write checks, and keep your finances organized.

Also, depending on what kind of business you’re running, you may need local, state, or federal licenses or permits. For example:

  • Sales tax permit if you sell physical products.
  • Health permits if you’re in the food industry.
  • Professional licenses for certain industries, like accounting or real estate.

Check with your city or county to make sure you have all the permits you need before starting operations.

Recap

Starting a C Corporation in Illinois is a straightforward process, but it involves several key steps. First, choose a unique corporate name that complies with Illinois naming requirements. Next, appoint a registered agent who can handle legal documents on behalf of your corporation. Then, file the Articles of Incorporation with the Illinois Secretary of State.

After that, prepare corporate bylaws to outline how your corporation is going to operate. Once that is ready, appoint initial directors and hold your first board meeting to adopt the bylaws and issue stock. Don’t forget to obtain an EIN (Employer Identification Number) from the IRS for tax purposes. Finally, make sure to file an annual report with the state to keep your corporation in good standing.

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