Illinois Incorporation Requirements

Incorporating on your own - what to think about before filing your Articles of Incorporation

Incorporating a business may seem daunting to those not familiar with the Secretary of State requirements, however, it is not impossible to prepare the filings yourself if you have a general idea of what is expected and what should be thought out prior to your formation. Today I am focusing on Corporations, there is just too much information to combine the procedures for Illinois Incorporations and Illinois Limited Liability Company formations into one neat tidy package. I have provided links to theIllinois forms for Articles of Incorporation and Application for Authority to do business in Illinois .

Sometimes just knowing what is expected from the State of Illinois will help you to think about what you should be considering when it comes to starting a business, such as your company name, what is your company's true purpose, who accepts your service of process and correspondence from the State of Illinois, who is your incorporator, how will you deal with stock, how many shares and class of stock do you want to issue and what is its initial value... Just by defining the above mentioned items, you have defined the basics of your company's structure and a general operating premise.

The following are things that belong in the Illinois Articles of Incorporation and are required to be included in your corporate filing:

1. Company Name. A corporation must have one of the following endings: Corporation, Incorporated, Company or Limited and may be an abbreviation of any of those endings.

2. Purpose. Each company must specify a purpose for organization. The State of Illinois will accept a standard purpose clause which is: "The transaction of any or all lawful businesses for which corporations may be incorporated under the Illinois Business Corporation Act of 1983, as amended".

3. Registered Agent. The address of the initial registered office and its initial registered agent. (This is where we hope you will use our services, we are the most reasonable on the web!

4. Incorporator. The name and address of your incorporator (Incorporator refers to the person filling out and filing the Articles of Incorporation forms for you).

5. Authorized Shares of Stock. The number and class or series of shares you intend to authorize and the consideration to be received for each class and share of stock. (Keep in mind that you will be paying franchise tax on the paid-in- capital from the initial issuance of stock. If you authorize 100 shares of stock at $1.00 per share, your franchise tax base will be $100.00. If you increase the value of the shares to $50.00 per share, your franchise tax base would then be $5000.00).

6. Issued Shares of Stock. The number and class of shares you intend to issue and the consideration to be received for each class and share of stock.

7. Designation of Class of Stock. You only need to consider this if your shares are divided into classes, the designation of each class and a statement of designations, preferences, qualifications, limitations, restrictions or special or relative rights associated with that particular class of stock. (This type of designation is more complex and you may want to discuss with an attorney the implications of issuing various classes of stock.) If you are not issuing stock with specific classes, you will not need to address this issue in your Articles of Incorporation.

8. Series of Stock. You will only need to consider this if you are issuing preferred or special class in a series, then the designation of each series and a statement of the variations in the relative rights and preferences of the different series, if the same are fixed in the articles of incorporation, or a statement of the authority vested in the board of directors to establish a series and determine the variations in the relative rights and preferences of the different series. This too should be discussed with an attorney to understand the implications of issuing various class and series of stock.

Items that can be included in the Articles of Incorporation, but are not required by statute:

1. Directors. You may include the names and addresses of the individuals who are to serve as the initial directors.

2. Provisions not inconsistent with law with respect to: (for items listed below, I would suggest you discuss their inclusion in the Articles of Incorporation with an attorney)

Managing the business and regulating the affairs of the corporation;
Defining limiting and regulating the rights, powers and duties of the corporation, its officers, directors and shareholders;
Authorizing and limiting the preemptive right of a shareholder to acquire shares whether then or thereafter authorized;
An estimate, expressed in dollars, of the value of all the property to be owned by the corporation for the following year (wherever located)
An estimate, expressed in dollars, of the value of the property to be located within Illinois during the same year;
An estimate, expressed in dollars, of the gross amount of business which will be transacted by it during the first year;
An estimate, expressed in dollars, of the gross amount thereof which will be transacted by the corporation in Illinois for the first year.

3. Corporate Action. superseding any provision of the Illinois Business Corporation Act that requires for approval of corporate action a two-thirds vote of the shareholders by specifying any smaller or larger vote requirement not less than a majority of the outstanding shares entitled to vote on the matter and not less than a majority of the outstanding shares of each class of shares entitled to vote as a class on the matter.

4. Limiting Director Liability. A provision eliminating or limiting the personal liability of a director to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, provided the provision does not eliminate or limit the liability of a director for breach of duty of loyalty to the corporation or its shareholders, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or for any transaction from which the director derived an improper personal benefit.

5. Other Provisions. Any provision under the Illinois Business Corporation Act is required or permitted to be set forth in the Articles of Incorporation or the corporation's by-laws. The Articles of Incorporation need not set forth any of the corporate Powers enumerated in the Illinois Business Corporation Act.

6. Duration of Corporation. The duration of the corporation is perpetual unless otherwise specified in the Articles of Incorporation.

Illinois Registered Agent, Inc.

When you must use an assumed name in Illinois

Using an Assumed Name in Illinois

In Illinois, the company name you choose for your entity must be unique and distinguishable from any other corporation (profit or not-for-profit), and any limited liability company already on record in the State of Illinois. This distinguish-ability also extends to assumed names and entities that have reserved a company name with the state. The company name, regardless of whether your company is a foreign or a domestic company, or is formed under other the provisions of any other Acts of this State, are all subject to this simple requirement. And, only the Secretary of State can determine if your company name is “distinguishable” from any other company name. That is why it is so important to check with the state before you file anything.

The items that the state does not consider as “distinguishable” are listed below:

·      The words corporation, company, incorporated, limited, limited liability, or any and all abbreviations of those words;

·      Articles, conjunctions, contractions, abbreviations, different tenses or number of the same words;

In the event that your entity name is not available for use in Illinois, and depending on what it is that you are trying to file with the Secretary of State (i.e. Articles of Incorporation/Organization, an Applications for Authority or a reinstatement for an administratively dissolved entity), a name availability check with the Secretary of State may save you weeks of delay in the processing of your filing. 

Companies who have had their filings rejected for lack of name availability would be required to either (1) change their company name or (2) adopt an assumed name prior to obtaining a presence in Illinois or of the acceptance of your filing by the Secretary of State. Assumed name filings are typically submitted in tandem, and filed simultaneously with your initially intended filing, and as you may have guessed, there is additional filing fee for this additional piece of paper!

An assumed corporate name is any corporate name used other than the true corporate name that is on record with your organizational state. The following instances are the only exceptions to the requirement to, and shall not constitute the use of an assumed corporate name:

· The identification by a corporation of its business with a trademark or service mark of which it is the owner or licensed user; and

· The use of a name of a division, not separately incorporated and not containing the word corporation, incorporated or limited or an abbreviation f one those words, provided that the company also clearly discloses its legal name.

Before a company transacts business in Illinois under an assumed name, a company must file in duplicate, for each assumed name chosen, an application to adopt an assumed name that contains the following information:

1. The true corporate name. If you are qualifying to transact business in the State of Illinois, this would be the company name that you originally filed your formation documents in your state of incorporation.

2. The state of country under the laws of which your company is organized (i.e. if you are a domestic entity your state of organization would be Illinois, if you are a foreign entity your state of organization would be the state in which your company initially filed its organizational documents.

3. A statement that this entity intends to transact business under an assumed name.

4. The assumed name that the entity is intending to use in Illinois.

Assumed names are effective upon the acceptance of the filing with the Secretary of State, and like all things Illinois, the filing fee will vary depending on what year you file your application to adopt an assumed name. Assumed names are renewable on years divisible by 5, and your filing fee follows that same rule. For Instance, if you file for an assumed name in 2017, your assumed name renewal year would be 2020 and your filing fee would follow the schedule listed on the Application to Adopt an Assumed Name.

Illinois only accepts renewals of an assumed name 60 days prior to the assumed name anniversary date and can be elected to be renewed on the company's annual report form, and by paying the renewal fees in tandem with the annual report fee and franchise taxes.

Additional stipulations:

An entity's name cannot contain any words or phrase that indicates or implies that the corporation is authorized to conduct business of the following professions:

• · Insurance, Assurance, Indemnity or the acceptance of savings deposits
• · Conducting the business of banking (unless otherwise permitted by the Commissioner of Banks and Real Estate ( pursuant to Section 46 of the Illinois Banking Act [205 ILCS 5/46])
• · Be in the business of a corporate fiduciary unless otherwise permitted by the Commissioner of Banks and Real Estate (under Section 1-9 of the Corporate Fiduciary Act [205 ILCS 620/1-9]).

To check your company’s name availability, contact the Illinois Secretary of State Name Availability Section listed below for the appropriate entity type:

Corporations: 217-782-6961

Limited Liability Companies: 217-524-8008

For additional references for business entities in Illinois, additional filing tips and resources, visit our site: https://www.illinoisregisteredagent.com.

Illinois Registered Agent, Inc. provides a low cost and dependable approach to registered agent representation in Illinois.

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