Introduction
Are you considering starting a corporation in the state of Illinois? The formation of a corporation can be a complex process with various legal and financial aspects to consider. This article will provide you with a comprehensive guide on the steps required to start a corporation in Illinois, including the necessary forms and licenses, as well as important legal considerations.
1. Choosing a Name
The first step in starting a corporation is selecting a unique and distinguishable name for your business. Your chosen name must be different from any other registered illinois corporation or reserved name. To search for existing business names in Illinois, you may use the 'Business Entity Search' tool available on the website of the Illinois Secretary of State.
2. Appoint Directors
In Illinois, a corporation must have at least one director. Directors are responsible for making major decisions on behalf of the corporation. It is essential to choose capable and trustworthy individuals who understand their fiduciary duties and responsibilities as directors.
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3. Prepare and File Articles of Incorporation
To legally establish your corporation in Illinois, you must file Articles of Incorporation with the Illinois Secretary of State's office. This document must include specific information such as:
- The corporation's name
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- The corporation's purpose
- The number of authorized shares
- The registered agent's name and address
- The director's names and addresses
The completed Articles of Incorporation along with the filing fee can be submitted online or by mail.
4. Obtain an Employer Identification Number (EIN)
An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is required for tax purposes and other legal obligations. You can obtain an EIN from the Internal Revenue Service (IRS). This number is necessary for opening bank accounts, filing tax returns, and hiring employees.
5. Register for State and Local Taxes
Before commencing business operations, you must register for state and local taxes in Illinois. This includes sales tax, employment tax, and other state corporate taxes. The Illinois Department of Revenue provides all necessary information and forms required for tax registration.
6. Obtain Necessary Business Licenses and Permits
Depending on the nature of your business, you may need to obtain specific licenses and permits. To determine the licenses required, you can visit the official Illinois Business Portal website or utilize its Business License Information System (BLIS) to explore the appropriate licensure for your corporation.
7. Draft and Approve Bylaws
Bylaws serve as the corporation's operating manual, establishing the rules and procedures for its internal governance. They outline the rights and responsibilities of shareholders, directors, and officers. Bylaws should be drafted and approved by the directors and shareholders during the initial stages of forming your corporation.
8. Comply with Ongoing State Requirements
Once your corporation is up and running, it is essential to stay compliant with ongoing state requirements. This includes filing an annual report with the Illinois Secretary of State and maintaining accurate records of your corporation's activities, such as shareholder meetings and corporate resolutions.
9. Consider Seeking Legal and Accounting Assistance
The process of starting a corporation can be intricate, and seeking professional legal and accounting assistance is highly recommended. A lawyer experienced in corporate law can guide you through the entire process, ensuring compliance with all legal requirements. An accountant can assist with financial aspects, including bookkeeping and tax filings.
Conclusion
Starting a corporation in Illinois requires careful planning, attention to detail, and adherence to legal obligations. By following the steps outlined in this guide, you can navigate the process more smoothly and set your corporation up for success. Remember, seeking expert assistance when needed can save time, mitigate potential risks, and ensure all necessary legal and financial aspects are properly addressed. Good luck with your new venture!
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