Tips on Illinois Incorporation 

A corporation does not rely on its owners to subsist in a business environment. In the event that the owner wishes to sell or has met an unfortunate death, the corporation may continue to thrive and do business. Incorporating your business legally detaches the personal assets and separately exists from the shareholders and the business-owners. Counteractively, the shareholders and the owner may also not be liable from legal proceedings where the corporation stands as a defendant. This is what incorporation in Illinois aims to provide and protect.

To incorporate your business in Illinois, you must do the following:

1. Hire an agent to work for you. The agent must be a resident registered with an official address under the state of Illinois. The agent will help you identify the type of corporation you would wish to establish. Most opt to file as an S Corporation for tax purposes and for this a Form 2553 must be filed with the state.

The agent must also prepare the documents for incorporation, which serve as the by-laws of your business (Articles of Incorporation). He or she will file these documents with the state government. Processing takes an average of four to six weeks. But expedited processing is possible, provided corporations pay additional fees to the agent.

The agent will also serve and represent the company in most legal proceedings. Many companies hire attorneys as their agents.

2. The chosen name of your corporation must have the words: “company”, “limited”, “incorporated”, “corporation” or it abbreviated equivalent. It must not have the words “limited partnership”. The corporation name must be discernible and unique, in sight or when pronounced, from other names registered with the state, to prevent confusion or deception. Corporations in Illinois are required to get the authorization especially when nature of the business involving insurance or banking. The names or words “bank” or “trust” and its equivalent are permitted and authorised only if applicable with Section 46 of the state's banking laws.

3. Corporations in Illinois are required to have directors, shareholders and employees. Corporations must properly hold and document meetings among shareholders and directors. These records are to be kept in the main office.

4. Corporations will have to get a FEIN (Federal Tax Identification Number) from the federal government to be able to operate business in Illinois. It is the equivalent of a Social Security Number required from individuals. Banks require an FEIN from companies who wish to open a bank account, regardless of whether they have employees or not. To be able to get your FEIN, form SS-4 should be filed with the IRS. You may also call IRS hotline to request for this.

As a corporate director/business-owner and an individual, you must take care that your individual and corporate funds does not become commingled. To do this, it is suggested that you be careful with paying company obligations out of your personal fund, and vice versa - avoid paying personal debts using your company funds. Failing to maintain this distinction will make you subject to legal proceedings.