--- title: "How to Form a Corporation in Illinois: Steps, Fees & Filing 2026 | LLC Attorney" description: "Incorporating in Illinois means a $150 Articles of Incorporation fee plus a $25 minimum franchise tax, one director, and a $75 annual report. Full state guide." canonical: https://llcattorney.com/states/il/corporation-formation-illinois image: https://llcattorney.com/images/share-cover.png source_path: /states/il/corporation-formation-illinois --- Key Takeaways - $150 Articles of Incorporation filing fee (Form BCA 2.10) paid to the Illinois Secretary of State, Department of Business Services - Minimum 1 director required (805 ILCS 5/8.10) - Annual Report (Form BCA 14.05) due within before the first day of the corporation's anniversary month each year, $75 filing fee plus any franchise tax due fee; 10% penalty on franchise tax plus interest; administrative dissolution if unfiled late penalty - 9.5% combined entity-level rate on C-corp net income (7% corporate income tax + 2.5% PPRT); franchise tax on Illinois paid-in capital billed with the $75 annual report, first $10,000 of calculated tax exempt since 2025 - Registered Agent with a physical Illinois street address required - No publication requirement - S-Corp election available via IRS Form 2553 within 75 days of formation; Illinois S corps still pay the 1.5% replacement tax - Same-day filing available through LLC Attorney at no markup on state fees Forming a corporation in Illinois means filing Articles of Incorporation (Form BCA 2.10) with the Illinois Secretary of State, paying the $150 filing fee plus a $25 minimum initial franchise tax, naming at least 1 director, and keeping up with Illinois's ongoing obligations, including the $75 annual report due before the first of your anniversary month. What sets Illinois apart is its tax mix: C-corporations face a combined 9.5% entity-level rate (7% corporate income tax plus a 2.5% replacement tax) alongside a franchise tax on paid-in capital. This guide walks through every step and cost of forming an Illinois C-Corporation, with same-business-day online filing available through LLC Attorney starting at $49. $150Articles of Incorporation filing fee 1Minimum directors (805 ILCS 5/8.10) 9.5%Combined C-corp entity-level rate (7% + 2.5% PPRT) $49LLC Attorney formation starting price ## C-Corp vs LLC in Illinois Most first-time business owners in Illinois choose an LLC, partly because a partnership-taxed LLC sidesteps the corporate income tax. A corporation earns its place in specific situations, particularly when you plan to raise outside capital, issue stock options, or want the S-Corp election to cut the entity-level replacement tax to 1.5%. ### Choose a Illinois corporation when: - **You plan to raise venture capital or institutional investment.** VC firms, angels, and most institutional investors require a C-Corp structure before they write a check. Preferred stock, convertible notes, SAFEs, and board governance by class are native to corporations, not LLCs. - **You want to issue stock options to employees (ISOs).** Corporations issue stock; LLCs issue membership interests. ISO and NSO option plans are available to corporations but not to LLCs. - **You expect to eventually go public or sell to a public company.** Public markets operate on corporate stock mechanics. - **You are in a regulated industry** where corporate structure is required or expected by licensing boards, government contracts, or institutional counterparties. ### Stick with an LLC when: - You are a small business with one or a few owners who will not need institutional investment. - Pass-through taxation without payroll complexity is the priority. - You do not need stock option plans or institutional investment mechanics. ### Why and when to incorporate in Delaware vs your home state Delaware is the default for startups on a venture track. Institutional investors expect it, term sheets assume it, and the Court of Chancery resolves corporate disputes faster than any general trial court. If you are raising a priced round or structuring for QSBS eligibility, incorporate in Delaware. If you are not raising outside capital, Illinois is usually the better choice. A Delaware corporation operating in Illinois still has to register as a foreign corporation there, pay Illinois fees, and file a Delaware franchise tax return each March 1. That is duplicate overhead with no benefit for a business that will not seek institutional investment. ## What's Unique About Corporations in Illinois? Illinois pairs a conventional corporate-formation process with one of the most distinctive state tax regimes in the country. The Personal Property Replacement Tax (PPRT) layers an extra 2.5% on top of the 7% corporate income tax, pushing the C-corp entity-level rate to 9.5%, and a separate franchise tax on paid-in capital is collected through the Secretary of State. Lawmakers scheduled the franchise tax for repeal but then kept it in place, softening it with a $10,000 exemption rather than eliminating it, so the line item survives even though most small corporations now owe $0. Anyone incorporating in Illinois should plan around both taxes from day one. Key Illinois-specific requirements: - Articles of Incorporation (not "Articles of Organization" — that is the LLC filing document) - Minimum of 1 director (805 ILCS 5/8.10); no Illinois residency or citizenship requirement, and the Act leaves officer titles to the bylaws - 9.5% combined entity-level rate on C-corp net income (7% corporate income tax + 2.5% PPRT); franchise tax on Illinois paid-in capital billed with the $75 annual report, first $10,000 of calculated tax exempt since 2025 - Annual report due before the first day of your anniversary month (not the end), filed on Form BCA 14.05 with the $75 fee plus any franchise tax - Personal Property Replacement Tax — a 2.5% surtax on C-corp net income on top of the 7% corporate income tax, found in almost no other state ## Selecting a Name for Your Illinois Corporation Your corporation's name must comply with Illinois naming requirements: - Must include "Corporation," "Incorporated," "Inc.," "Corp.," or another Illinois-approved designator (805 ILCS 5/4.05) - Must be distinguishable from all existing Illinois entities in the Illinois business entity search - An Illinois corporate name must contain the word Corporation, Company, Incorporated, or Limited, or an abbreviation of one of those words, and may not imply a purpose the corporation is not authorized to pursue under the Business Corporation Act - Names implying government affiliation or banking activity are restricted Search the Illinois business entity search at ilsos.gov before filing. Your name search is not a reservation — the name can be registered by another filer while you prepare your Articles of Incorporation. **Name reservation:** file a name reservation with the Illinois Secretary of State, Department of Business Services, $25 fee, holding the name for 90 days. Recommended if your paperwork takes more than a few days to prepare. ## Directors, Officers, and Shareholders in a Illinois Corporation A Illinois corporation has three distinct roles: **Shareholders** own the corporation. They hold stock and vote on major decisions — electing directors, approving mergers, authorizing major asset sales. Shareholders do not manage day-to-day operations. **Directors** govern the corporation through a Board of Directors. They set strategic direction, authorize major transactions, and oversee management. Illinois's director requirements: Illinois requires a board of at least 1 director (805 ILCS 5/8.10), with the actual number fixed by the bylaws or set by the incorporators in the Articles. Directors do not have to be Illinois residents, U.S. citizens, or shareholders. Officers are whatever the bylaws provide (805 ILCS 5/8.50); the Act does not mandate specific titles like president, but one officer must be able to certify corporate records, and a single person may hold multiple offices. **Officers** (CEO, CFO, Secretary, etc.) manage day-to-day operations. Officers are appointed by the Board of Directors. Illinois requires the officers described in its bylaws, one of whom (generally the secretary) must be able to certify corporate records (805 ILCS 5/8.50); one person may hold two or more offices. One person can be the sole director and simultaneously hold every office the bylaws create, which is the normal setup for a closely held Illinois corporation. ## Designating a Registered Agent Every Illinois corporation must designate a Registered Agent — a person or entity with a physical Illinois street address who receives legal notices, lawsuits, and official state correspondence on behalf of your corporation. Every Illinois corporation must continuously maintain a registered agent with a physical Illinois street address (805 ILCS 5/5.05); a P.O. box does not qualify. The agent must be available during business hours to accept service of process and official Secretary of State mail. The agent can be an Illinois resident or a company authorized to do business in Illinois, and the agent's name and address appear on the public ilsos.gov record. If the Illinois Secretary of State, Department of Business Services cannot deliver legal notices to your Registered Agent, Illinois can administratively administratively dissolve your corporation. LLC Attorney's Illinois Registered Agent service is $125/year. ## Illinois Corporation Costs and Compliance Fee Amount Notes Articles of Incorporation (Form BCA 2.10) $150 Standard processing: same business day for online filings at ilsos.gov; about 10 business days by mail Annual Report (Form BCA 14.05) $75 filing fee plus any franchise tax due 10% penalty on franchise tax plus interest; administrative dissolution if unfiled late penalty if missed Annual report + franchise tax $75 + franchise tax on paid-in capital Due before the first day of the anniversary month; first $10,000 of franchise tax exempt since 2025 Name reservation $25 Holds name for 90 days Certificate of Amendment $50 To change corporate name or structure Registered Agent (professional) $49–$300/yr LLC Attorney service available ## How to Form a Corporation in Illinois ### If You Do It Yourself **Step 1 — Choose a corporate name that complies with Illinois's requirements.** Your corporate name must be distinguishable from all existing Illinois entities and include an approved corporate designator ("Inc.," "Corp.," "Corporation," "Incorporated," or as specified in 805 ILCS 5/4.05). Search the Illinois business entity search at ilsos.gov before preparing any documents. Searching the name at ilsos.gov confirms it is distinguishable from existing Illinois entities but says nothing about trademark rights; clear it against the USPTO database separately if you intend to build a brand around it. **Step 2 — Reserve your corporate name (recommended).** File a name reservation with the Illinois Secretary of State, Department of Business Services, $25 fee, good for 90 days. If you are not filing immediately, this prevents another entity from taking your name while you prepare documents. **Step 3 — Decide your director structure before opening the formation form.** Illinois requires 1 director at formation. A single founder can sit as the only director and hold every officer role at once. If you expect to bring on co-founders or investors, fix the board size in the bylaws rather than the Articles, because the bylaws are easier to amend than a state filing when your board grows. Write down your director names and Illinois addresses before you open the form — most state portals cannot save a partially completed filing. **Step 4 — Designate your Registered Agent.** Every Illinois corporation must have a Registered Agent with a physical Illinois street address. P.O. boxes are not accepted. Many Illinois incorporators use a commercial registered agent to keep a home address off the public record and to be sure someone is present during business hours. LLC Attorney can serve as your Illinois Registered Agent and forward state and legal mail to your client portal. **Step 5 — Complete the Articles of Incorporation (Form BCA 2.10).** Go to ilsos.gov and use the current version of the Articles of Incorporation. Always file directly through the Illinois Secretary of State, Department of Business Services — outdated forms are rejected without refund. Complete it with: - Your exact corporate name including designator - Your Registered Agent — full legal name and physical Illinois street address - Your authorized share structure — keep the initial authorized and issued share figures modest, because Illinois bases its initial franchise tax on the paid-in capital you report on the Articles, so over-stating issued shares raises your day-one cost - Director names and addresses - Incorporator signature (the person submitting the form; need not be a director or shareholder) - The number of authorized shares, the number to be issued initially, and the consideration (paid-in capital) to be received for them, which together determine your initial franchise tax **Step 6 — File the Articles of Incorporation and pay the $150 fee.** File online at ilsos.gov or by mail to the Illinois Secretary of State, Department of Business Services in Springfield. Online processing is same business day for online filings at ilsos.gov; about 10 business days by mail under normal volume. **Step 7 — Wait for your approved Articles of Incorporation.** Your corporation does not legally exist during the review period. You cannot open bank accounts, sign contracts as the corporation, or issue stock until the Illinois Secretary of State, Department of Business Services approves your filing. Standard processing is same business day for online filings at ilsos.gov; about 10 business days by mail; longer for mailed paper filings during seasonal backlogs during peak filing season. Keep your approved Articles of Incorporation — every bank, licensing board, and counterparty will request it. **Step 8 — Hold your organizational meeting and adopt bylaws.** After approval, your Board of Directors must hold an organizational meeting (or sign a written consent in lieu of meeting) to adopt bylaws, elect officers, authorize the bank account, authorize stock issuance, and set the fiscal year. Illinois does not require bylaws to be filed with the Secretary of State — keep them with your corporate records. Illinois corporations adopt bylaws at the organizational meeting; the Business Corporation Act (805 ILCS 5/2.20 and 8.50) leaves officer titles and most governance terms to the bylaws, so draft them to fit your actual board and ownership rather than relying on a generic form. A generic template may omit Illinois-specific provisions and may not align with your share structure. **Step 9 — Issue stock to founders.** Authorize and issue shares to founders immediately after your organizational meeting. Document the issuance in your stock ledger and issue stock certificates (or maintain uncertificated share records). Each founder's share count and issuance price must be documented. Illinois ties its franchise tax to paid-in capital rather than to a raw authorized-share count, so the planning question is the value you actually contribute, not how many shares you list. Authorize enough shares to cover founders, an option pool, and an early round, but set initial issued shares and paid-in capital deliberately, since that figure drives the franchise-tax calculation on both the Articles and every annual report. **Step 10 — File your initial Annual Report (Form BCA 14.05) within before the first day of the corporation's anniversary month each year.** After your Articles of Incorporation is approved, you have before the first day of the corporation's anniversary month each year to file Form BCA 14.05 with the Illinois Secretary of State, Department of Business Services. This filing confirms your Registered Agent address, principal office address, and director and officer contact information. Filing fee: $75 filing fee plus any franchise tax due. Missing the deadline triggers a 10% penalty on franchise tax plus interest; administrative dissolution if unfiled penalty. **Step 11 — Apply for your federal EIN.** Your corporation needs an EIN to open a bank account, hire employees, and handle tax filings. Apply at irs.gov/ein. Free, no government filing fee. Available Monday through Friday, 7 a.m. to 10 p.m. Eastern. 15-minute inactivity timeout — have all information ready before starting. International incorporators without a U.S. SSN or ITIN must apply by phone (IRS Form SS-4, 267-941-1099). **Step 12 — Open a corporate bank account.** Required documents: your approved Articles of Incorporation, your EIN confirmation letter (IRS Form CP 575 or SS-4 approval), your adopted bylaws, a board resolution authorizing the account, and personal ID of authorized signers. Call ahead — bank requirements for corporations are more involved than for LLCs. **Step 13 — Register for Illinois state taxes.** Your federal EIN does not automatically register you with Illinois state agencies. Depending on your business type: - Illinois sales and use tax (Illinois Department of Revenue (MyTax Illinois), if you sell taxable goods or services) — [tax.illinois.gov](https://tax.illinois.gov) - Illinois employer payroll taxes (Illinois Department of Employment Security, if hiring Illinois employees) — [ides.illinois.gov](https://ides.illinois.gov) - Illinois Personal Property Replacement Tax (PPRT) — 2.5% on C-corp net income, reported with the corporate income tax on Form IL-1120 to the Department of Revenue **Step 14 — Pay your Illinois annual tax.** Illinois franchise tax is calculated on the corporation's paid-in capital allocated to Illinois, at a rate of 1/10 of 1% (with a $25 minimum at incorporation), and is paid alongside the $75 annual report before the first day of your anniversary month. Since January 1, 2025, the first $10,000 of calculated franchise tax is exempt, which zeroes out the tax for the vast majority of small and mid-size corporations, though they still owe the report fee. File and pay online at ilsos.gov; corporations exceeding the officer or director limits on the electronic form must file on paper. Separately, the corporate income tax and the 2.5% PPRT are reported to the Illinois Department of Revenue on Form IL-1120, not to the Secretary of State. **Step 15 — Decide whether to elect S-Corp tax treatment.** C-Corporation income is taxed twice: once at the corporate level (federal rate currently 21%), and again when distributed to shareholders as dividends. An S-Corp election converts the corporation to pass-through taxation. S-Corp election is available for Illinois corporations that meet IRS eligibility: 100 or fewer shareholders, all U.S. citizens or residents, only one class of stock, and no institutional or foreign shareholders. File IRS Form 2553 within 75 days of formation. The election is made with the IRS — it does not require any Illinois filing. Illinois honors the federal S-Corp election: an Illinois S corporation is exempt from the 7% corporate income tax and instead pays only the 1.5% Personal Property Replacement Tax at the entity level, reporting on Form IL-1120-ST, while income flows through to shareholders' individual Illinois returns at the flat 4.95% rate. That entity-level rate of 1.5% versus the C-corp's 9.5% is a meaningful saving, but the federal eligibility limits still apply, so reserve the election for closely held, profitable operating companies without disqualifying shareholders or multiple share classes. **Step 16 — Set annual compliance reminders.** Illinois corporations must file and pay on a recurring basis: - Annual Report (Form BCA 14.05): Annually, before the first day of the anniversary month, $75 filing fee plus any franchise tax due fee — 10% penalty on franchise tax plus interest; administrative dissolution if unfiled if missed - Annual report and franchise tax: filed on Form BCA 14.05 before the first day of your anniversary month; $75 fee plus franchise tax on Illinois paid-in capital, with the first $10,000 of calculated franchise tax exempt - Franchise tax on Illinois-allocated paid-in capital, billed with the BCA 14.05 annual report (first $10,000 of calculated tax exempt since 2025) Missing these filings puts your corporation in bad standing with the Illinois Secretary of State, Department of Business Services and Illinois Department of Revenue. Suspension means you cannot file documents, defend lawsuits, or do business in Illinois. If you would rather not manage this process, the service handles Illinois corporation formation starting at $49. Ready to Launch Your Business in Illinois?Follow our fast, easy process to get started right now.[Start My Business](https://app.llcattorney.com/formation?intake_type=formation) ### If LLC Attorney Does It for You 1. Submit your information at llcattorney.com — corporate name, director structure, authorized shares, Registered Agent preference, fiscal year, and target formation date. No forms to find or download. 2. LLC Attorney files your Articles of Incorporation with the Illinois Secretary of State, Department of Business Services, drafts your bylaws, handles your organizational meeting consent, issues your stock ledger documentation, applies for your EIN, and covers same-day filing if needed. Your Registered Agent designation and initial Annual Report are included. 3. Receive your approved Articles of Incorporation, bylaws, organizational consent, stock documentation, and EIN confirmation through your LLC Attorney client portal. Annual compliance reminders are included so you never miss a Form BCA 14.05 deadline or annual tax payment. ## S-Corp Election for Illinois Corporations — What You Need to Know An S-Corp election is not a separate entity — it is a federal tax election made by an existing corporation. Your Illinois corporation remains a Illinois corporation; you are only changing how the IRS taxes it. **The S-Corp tax advantage:** a C-Corp pays 21% federal corporate income tax on net income, and shareholders pay income tax again on dividends. An S-Corp passes income directly to shareholders' personal returns, skipping the corporate-level tax. For owner-operated businesses with consistent profitability above roughly $40,000/year, the S-Corp election typically produces material tax savings. **S-Corp payroll requirement:** if you elect S-Corp status and work in the business, you must pay yourself a "reasonable salary" subject to payroll taxes. The savings come from income above that salary, which passes through without payroll tax. Skip the salary and the IRS can reclassify your distributions as wages and assess back payroll taxes plus penalties. Eligibility requirements: - 100 or fewer shareholders - All shareholders must be U.S. citizens or permanent residents - Only one class of stock (identical distribution and liquidation rights) - No institutional shareholders, partnerships, or non-resident alien shareholders **Illinois treatment of S-Corps:** Illinois honors the federal S-Corp election: an Illinois S corporation is exempt from the 7% corporate income tax and instead pays only the 1.5% Personal Property Replacement Tax at the entity level, reporting on Form IL-1120-ST, while income flows through to shareholders' individual Illinois returns at the flat 4.95% rate. That entity-level rate of 1.5% versus the C-corp's 9.5% is a meaningful saving, but the federal eligibility limits still apply, so reserve the election for closely held, profitable operating companies without disqualifying shareholders or multiple share classes. **Filing deadline:** IRS Form 2553 must be filed within 75 days of formation, or by March 15 of the tax year for which you want the election effective. Late elections are sometimes accepted with a written explanation of reasonable cause. ## When Should You Consult an Attorney for Your Illinois Corporation? LLC Attorney provides on-demand attorney consultations for a flat rate per 30-minute session — no retainer required. Corporation formation benefits from attorney guidance more than most entity types because of share structure, bylaw complexity, and S-Corp election timing. Common scenarios: - **Multiple founders or investors:** share structure decisions made at formation (authorized shares, classes, par value) affect every future financing round and exit. A misstructured cap table is expensive to unwind. - **S-Corp election analysis:** whether to elect depends on projected net income, payroll requirements, and state-level S-Corp recognition. The payroll requirement catches founders off guard. - **High-liability industry:** regulated industries may have specific corporate structure requirements from licensing boards or insurance carriers. - **Raising capital:** if you plan to raise institutional capital, your share structure, option pool, and Delaware vs. home-state decision should be reviewed before you file. - **Illinois-specific wrinkles:** Illinois may have corporate law provisions a generic national template does not cover correctly. ### Is Illinois a State Where Legal or Tax Advice Matters More for Corporations? Illinois's two-layer tax structure makes the C-corp-versus-S-corp question consequential here: the difference between a 9.5% combined entity-level rate and the S corporation's 1.5% replacement tax can be substantial, and the franchise tax on paid-in capital rewards setting your issued-share and capital figures carefully at formation. An attorney or experienced formation service should confirm whether a C-Corp or an S-Corp election fits your ownership and growth plans, and should set your share structure with the franchise-tax calculation in mind before you file. ## What You Actually Get When You Incorporate in Illinois with LLC Attorney An Illinois corporation that has only been filed with the state is not a finished corporation. The state filing creates the entity; it does not produce the bylaws, organizational consents, or stock records that make the corporation operate and hold its liability shield. A "$0 filing" that omits those is not free, it is unfinished, and in Illinois an unfinished corporation is also one that has not planned for the franchise tax or the choice between C-Corp and S-Corp tax treatment. Included with LLC Attorney corporation formation, starting at $150: - Same-day or 24-hour Illinois filing at no markup on the state fee. Most services charge extra to expedite. - Attorney-drafted bylaws, initial board consent, and organizational minutes — customized, not auto-generated templates. - Initial stock issuance and cap-table setup, so your ownership is documented correctly from day one. - Federal EIN, obtained for you. - Illinois Registered Agent service at $125/year, included to keep you in good standing. - S-Corp election guidance when pass-through tax treatment is the right call for your situation. - Access to attorney-trained Business Success Advisors at no charge, plus optional flat-fee attorney consultations (no retainer). Because Illinois layers a replacement tax and a franchise tax onto an otherwise ordinary filing, the documents that make the corporation work, clean bylaws, an organizational consent, and a share structure set with the franchise tax in mind, are exactly what is included here. ## Starting Your Illinois Corporation with LLC Attorney Illinois's corporate formation requirements are straightforward to file but carry real tax nuance — the 9.5% combined C-corp rate, the franchise tax on paid-in capital, and whether an S-Corp election is the better fit. Getting your directors, share structure, bylaws, and initial compliance filings right at formation prevents expensive corrections later. The service handles Illinois corporation formation starting at $49. Same-day filing is available at no markup on state fees. On-demand attorney consultations in 30-minute increments — no retainer — cover bylaws drafting, S-Corp election analysis, the Illinois C-corp-versus-S-corp decision and franchise-tax-aware share structuring, and annual tax planning. See our [full pricing](/pricing) for all service tiers. Ready to Launch Your Business in Illinois?Follow our fast, easy process to get started right now.[Start My Business](https://app.llcattorney.com/formation?intake_type=formation) ## Frequently Asked Questions How long does it take to form a corporation in Illinois? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) Illinois online incorporations at ilsos.gov are processed the same business day for filings within the electronic form's officer and director limits. Mailed paper Articles of Incorporation take roughly 10 business days and longer during seasonal backlogs. Because the online channel is both faster and free of any separate expedite charge, it is the recommended route. LLC Attorney files online so your formation date lands when you need it. What is the difference between a C-Corp and an S-Corp in Illinois? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) A C-Corp and an S-Corp are the same Illinois corporation — the difference is federal tax treatment only. A C-Corp pays corporate income tax at the entity level (21% federal rate), and shareholders pay personal income tax again on dividends. An S-Corp elects pass-through taxation — income flows to shareholders' personal returns without corporate-level tax. The election is made with the IRS via Form 2553 and has no impact on your Illinois formation documents. An Illinois S corporation still owes the 1.5% replacement tax at the entity level even though it escapes the 7% corporate income tax, so factor that into the comparison. Can a single person form a corporation in Illinois? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) Yes. Illinois lets a single individual form and run a corporation as the only director while holding all officer positions named in the bylaws. This is standard for a solo-owned Illinois corporation. You still have to keep up corporate formalities, adopt bylaws, hold an organizational meeting, issue stock, and keep corporate and personal funds separate, to preserve the liability shield that the corporation provides. What taxes does a Illinois corporation have to pay? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) An Illinois C-corporation pays a 7% corporate income tax plus a 2.5% Personal Property Replacement Tax on net income, a combined 9.5% entity-level rate reported on Form IL-1120 to the Department of Revenue. It also owes a franchise tax on Illinois-allocated paid-in capital, paid with the $75 annual report, but the first $10,000 of calculated franchise tax has been exempt since 2025, so most small corporations owe $0 there. At the federal level, a C-Corp pays the 21% corporate income tax unless it elects S-Corp treatment. What is the Annual Report and when is it due? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) Illinois corporations file a domestic corporation annual report (Form BCA 14.05) before the first day of the corporation's anniversary month each year. The report carries a $75 filing fee plus any annual franchise tax owed on Illinois-allocated paid-in capital. As of January 1, 2025, the first $10,000 of calculated franchise tax is exempt, so most small corporations owe only the $75 report fee. File online at ilsos.gov, where reports under the officer/director limits process the same business day. Does a Illinois corporation need bylaws? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) Illinois does not require corporations to file bylaws with the Secretary of State. However, bylaws are a legal requirement for corporate governance — they define how your board operates, how shareholder meetings work, how officers are appointed, and how major decisions are made. A corporation without bylaws is technically non-compliant and lacks the foundational document that governs all major corporate decisions. Every bank, investor, and serious counterparty will request your bylaws. What happens if I miss the annual tax deadline? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) An Illinois corporation that misses its annual report and franchise-tax deadline is assessed a penalty equal to 10% of the franchise tax due plus interest on unpaid amounts. Continued non-filing leads the Secretary of State to administratively dissolve the corporation, after which it loses the right to conduct business and to sue in Illinois courts until it files all delinquent reports, pays the back fees and penalties, and completes reinstatement. Can I change my Illinois corporation to an LLC later? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) Yes. An Illinois corporation can convert to an LLC under the Entity Omnibus Act (805 ILCS 180) by filing a statement of conversion with the Secretary of State. The conversion is a taxable event for federal purposes and can trigger gain recognition, so model the consequences with a CPA first, since for some companies it is cleaner to dissolve and re-form depending on assets and basis. An attorney consultation can map the most tax-efficient path for your situation. What happens if my Registered Agent cannot be reached? ![icon](/_next/image?url=%2Fimages%2Ficons%2FfaqPlus.png&w=128&q=75) If Illinois is unable to deliver legal notices to your Registered Agent, the state can administratively administratively dissolve your corporation. This can happen without direct notice to you. A professional Registered Agent service ensures a qualified person is available during business hours at a physical Illinois address to receive any legal documents on your behalf. ## Learn More About Illinois - [Illinois LLC Formation](/states/il/llc-formation-illinois) - [Illinois Registered Agent](/states/il/registered-agent-illinois) - [Illinois EIN Number](/states/il/ein-number-illinois) - [Illinois Anonymous LLC](/states/il/anonymous-llc-illinois)