When deciding to form a business in Chicago, Joliet, Springfield or elsewhere in Illinois, you should review and evaluate the most recent state laws and regulations that apply to your specific company and, most importantly, seek the advice of a qualified professional who has experience with Illinois corporations that are similar to yours. You may want to consider information that could help you determine whether forming a corporation or limited liability company (LLC) in Illinois is right for you.
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Business owners who incorporate in Illinois experience the peace of mind derived from the limited liability protection a corporation provides. Illinois corporations can protect your personal assets, since they cannot be used to satisfy debts and liabilities of the corporation. An Illinois corporation's limited liability protection also shields its shareholders from any claims arising from lawsuits.
An Illinois corporation's board of directors and officers enjoy the same limited liability protection as do the corporation's shareholders.
Unless you elect to have a special “pass through” tax status with the Internal Revenue Service (IRS) by filing an IRS Form 2553, your Illinois corporation will enable you to shelter and retain more income since a corporation files tax returns and pays its income taxes (at generally lower tax rates than do individuals) while the individual shareholders report and pay personal income taxes only on monies paid them by the corporation. Although shareholders are required to pay taxes on income from dividends paid by the corporation even though income taxes were previously paid by the corporation (called “double taxation”), an Illinois C corporation can facilitate the accumulation of earnings.
Forming a corporation in Illinois should make it easier to get additional capital than it would be with some of the other types of businesses. You can issue and sell stock or a variety of other financial instruments as evidence of interest in the corporation and ownership in Illinois corporations can be easily transferred through the issuance or transfer of stock.
Employees would normally prefer to work for a corporation rather than a proprietorship or partnership and an Illinois corporation has the advantage of being able to attract, motivate and retain quality employees by offering stock option and bonus plans.
Illinois corporation owners working in the business are employees and are therefore eligible for certain fringe benefits such as group insurance plans, retirement and profit sharing plans, and tax-favored stock option and bonus plans. In addition, the corporation allows owners to reduce self-employment taxes.
An Illinois corporation is a separate legal entity and, in a sense, immortal and perpetual since it does not end with the death of a shareholder owner as do some of the other business types.
If you're a small business owner who has chosen to incorporate in Illinois, you may struggle in deciding which type of incorporation is best. At MaxFilings, we hope to clearly distinguish the advantages and disadvantages of starting an LLC vs. a corporation, whether to classify your business as an S Corp or C Corp, and give you a better idea of which option will provide the best results for your continued financial and operational success.
|Limits personal liability|
|Ownership structure||Unlimited owners||Unlimited shareholders||No more than 100 shareholders (US citizens or resident aliens only)|
|All business income/loss passed through to owners each year|
|Owners pay personal income tax on profits|
|Business must pay corporate income tax|
|Recognized outside of the US|
|Flexible management structure|
|Annual Meeting Requirement|
An Illinois corporation name shall contain the word "corporation", "company", "incorporated", or "limited", or an abbreviation thereof and the name must be distinguishable from any other business entities' names registered or reserved by the state, subject however to any exceptions provided for under Illinois law.
The board of directors of an Illinois corporation shall consist of one or more members. Directors do not have to be shareholders and they do not have to reside in Illinois unless required by the corporation's articles of incorporation or bylaws which may also prescribe other qualifications for directors.
An Illinois corporation shall have such officers, elected by the board of directors, as shall be provided in the bylaws. One officer (generally the Secretary) shall have the authority to certify the corporation's bylaws, shareholders' and board of directors' resolutions, and other corporate documents. Two or more of the offices may be held by the same person if provided for in the corporation's bylaws.
An annual shareholders' meeting shall be held as provided in the corporation's bylaws or in a board of directors' resolution in accordance with the bylaws. Shareholders' meetings may be held within or without Illinois, as may be provided in the bylaws or in a board of directors' resolution in accordance with the bylaws but without such a provision, shareholders' meeting shall be held at the corporation's registered office in Illinois.
Regular or special board of directors' meetings may be held within or without Illinois upon such notice as provided for in the corporation's bylaws.
*For complete and current information concerning Illinois corporations, visit the state's official website. The information listed above is not an attempt to present all you need to know when forming a corporation in Illinois but rather to call your attention to some basic information and requirements you may want to know as you submit information to form your corporation or LLC.
MaxFilings is committed to helping business owners just like you. Here are a few reasons why MaxFilings stands out as the resource of choice when forming an Illinois corporation:
Competitive, Transparent Pricing. There's never any obligation to order and there's no charge for saving your information – you only pay your incorporation fees when you're ready to order. View our competitive pricing - it includes all state fees and other charges, so you'll have no surprises later.
Convenience & Ease of Use. MaxFilings helps you get organized in an orderly way and you set the pace – you can save all your incorporation information in one handy spot online and make changes anytime until you're ready to incorporate…or you can order your incorporation online right now!
Secure & Confidential. As a MaxFilings user, you can rest easy knowing that all your information is completely safe. We use industry-recognized security safeguards for storing and processing your orders, ensuring stringent data security for as long as you want to keep it with us.
Partner Perks. As you incorporate, you need to think about growing and promoting your new corporation. MaxFilings' online promotions partner SEO Advantage offers you expert services in PR, web development, search engine marketing, website optimization and graphic design.
Best of all, your satisfaction is 100% guaranteed!
If you're ready to form an Illinois corporation, you can start entering your information now. You're under no obligation, and there is no charge until you actually place your order.
Wondering what happens after you submit your incorporation order to us? Have questions about using MaxFilings to incorporate your business or form an LLC? Here you'll see basic questions about our system that can help make your experience smooth and hassle-free. FAQ About MaxFilings