Form a corporation in Illinois

Incorporate in Illinois with the franchise tax handled right – CountSure files your Articles, structures your paid-in capital to keep the franchise tax low, and tracks your annual report. Franchise tax still applies – but the $10,000 exemption zeroes it out for most.

Requirements, costs & steps for an incorporate in Illinois

Incorporating in Illinois creates a formal entity with directors, officers, and stock. Two Illinois features set it apart from many states: corporations pay a franchise tax on paid-in capital (though a generous exemption now zeroes it out for most small companies), and the combined corporate income tax rate is among the highest in the country at 9.5%. This guide covers the cost, the filing steps, the franchise tax, and ongoing compliance. To compare structures first, read our LLC vs. corporation guide, or let our Illinois incorporation service file it all for you.

What you need to know?

Filing fee:

$150 for Articles of Incorporation, plus an initial franchise tax on paid-in capital (0.1%, $25 minimum).

Franchise tax - still in effect:

Illinois still levies a franchise tax on paid-in capital. The 2019 law that would have repealed it in 2024 was reversed in 2021 - but as of 2025 the first $10,000 of annual liability is EXEMPT, so most small corporations pay $0.

Annual report + franchise tax:

$75 report, filed with the annual franchise tax, due within the 60 days before your anniversary month.

High corporate tax:

Illinois’s combined corporate rate is 9.5% (7% income tax + 2.5% replacement tax) - among the highest in the US.

Directors:

At least one director; director and officer names ARE reported on the annual report.

Illinois corporation at a glance

The essentials for incorporating and maintaining an Illinois corporation.

Requirement	Detail (2026)
Formation document	Articles of Incorporation (Form BCA 2.10)
Filing agency	Illinois Secretary of State, Dept. of Business Services
State filing fee	$150 + initial franchise tax (0.1%, $25 min)
Franchise tax	On paid-in capital; first $10,000/yr liability exempt (2025)
Registered agent	Required; physical Illinois address (no PO box)
Directors	Min. 1; reported on the annual report
Bylaws	Required (internal; not filed)
Annual report	$75 + annual franchise tax, before anniversary month
Corporate income tax	9.5% combined (7% + 2.5% replacement tax)
S-corp election	Recognized (federal election honored)

How to incorporate in Illinois, Step by Step

Seven steps from name check through your annual report and franchise tax.

Choose a compliant corporate name

Illinois corporate names must include “Corporation,” “Incorporated,” “Company,” “Limited,” or an abbreviation, be distinguishable from existing names, and not mislead the public. Reserve a name for 90 days for $25 if desired.

Appoint a registered agent

An Illinois resident or registered service with a physical in-state address (no PO box) who accepts service of process. CountSure can serve as your registered agent.

Set your paid-in capital and authorized shares

Because the Illinois franchise tax is based on paid-in capital, your initial capital structure directly affects your initial franchise tax (0.1%, $25 minimum). Set authorized shares and stated capital deliberately -this matters more in Illinois than in states without a franchise tax.

File Articles of Incorporation

File with the Secretary of State (Form BCA 2.10) with the $150 fee plus the initial franchise tax. The Articles list the corporate name, registered agent, purpose, authorized shares, and incorporators. Expedited service is about $100 extra.

Adopt bylaws and hold an organizational meeting

Appoint directors and officers, adopt bylaws (internal, not filed), and authorize stock issuance; keep minutes and a stock ledger in your corporate records.

Get an EIN and register for taxes

Obtain a free EIN; to elect S-corp treatment, file IRS Form 2553; register through MyTax Illinois for corporate income tax, replacement tax, withholding, and sales tax as needed.

Calendar your annual report and franchise tax

File the $75 annual report together with the annual franchise tax within the 60 days before the first day of your anniversary month, every year. Missing it risks penalties and administrative dissolution.

Naming & Member Requirements

Illinois keeps directors off the public Articles but reports them on the annual report. Here’s what to get right.

Ongoing Illinois corporation Compliance & Taxes

Corporate records

Keep the Articles, bylaws, stock ledger, director/officer and shareholder lists, and minutes of shareholder and board meetings at your principal office. Maintaining these formalities protects your limited-liability status.

Annual report and franchise tax

Illinois corporations file an annual report ($75) together with the annual franchise tax within the 60-day period immediately before the first day of the anniversary month. The franchise tax is 0.1% of paid-in capital (a $25 minimum applies before the exemption), but as of 2025 the first $10,000 of annual franchise-tax liability is exempt – so most small and mid-sized corporations owe $0 franchise tax and simply pay the $75 report fee. Larger corporations with substantial paid-in capital may still owe franchise tax above the exemption. Missing the deadline risks penalties and, ultimately, administrative dissolution.

Corporate income tax - 9.5% combined

Illinois taxes C-corporation income at a combined 9.5% – a 7% corporate income tax plus a 2.5% Personal Property Replacement Tax – among the highest corporate rates in the country. Corporations file the Illinois corporate income and replacement tax return with the Department of Revenue.

S corporation election

Illinois recognizes the federal S-corporation election; income generally passes through to shareholders (taxed at the flat 4.95% individual rate), but the corporation still owes the 1.5% Personal Property Replacement Tax and remains subject to the franchise tax and annual report.

EIN and state tax ID

An EIN is required to hire and bank. Illinois also requires a state tax identification number – register through MyTax Illinois for corporate income/replacement tax, withholding, and sales tax as applicable.

Illinois incorporation Cost Breakdown

The full picture before optional services.

Item	Cost (2026) · paid to
Articles of Incorporation	$150 · Secretary of State (one-time)
Initial franchise tax	0.1% of paid-in capital ($25 min) · Secretary of State, at filing
Annual report	$75 / year · Secretary of State, before anniversary month
Annual franchise tax	0.1% of paid-in capital · with annual report (first $10,000/yr exempt)
Expedited processing (optional)	~$100 · ~1 business day
Name reservation (optional)	$25 · 90-day hold
Registered agent (optional service)	~$49–$300/yr · third party
EIN	$0 · IRS (free)

Insight From Our Team

“The Illinois franchise tax is the thing everyone gets wrong – half the guides online still say it was repealed in 2024. It wasn’t; that repeal was itself repealed in 2021, so the tax is very much alive. The saving grace is the exemption: since 2025 the first ten thousand dollars of franchise-tax liability is exempt, which means most of my small-corporation clients actually owe zero. But it’s tied to paid-in capital, so if you’re authorizing and issuing a lot of stock, we model it up front. And remember the combined income tax is 9.5% – for a profitable C-corp, that’s the number that really matters, not the franchise tax.”

Parth Shah
CountSure

Related Guides & Services

Frequently Asked Questions

How much does it cost to incorporate in Illinois?

The Articles of Incorporation fee is $150, plus an initial franchise tax on paid-in capital (0.1%, $25 minimum). Ongoing, corporations file a $75 annual report with the annual franchise tax each year.

Does Illinois still have a franchise tax?

Yes. The 2019 law that would have repealed it in 2024 was reversed in 2021, so the franchise tax remains in effect. However, as of 2025 the first $10,000 of annual franchise-tax liability is exempt, so most small corporations owe $0.

What is Illinois’s corporate income tax rate?

A combined 9.5% – a 7% corporate income tax plus a 2.5% Personal Property Replacement Tax – which is among the highest corporate rates in the US.

How many directors does an Illinois corporation need?

At least one. Director names aren’t required in the Articles of Incorporation, but directors and officers are listed on each annual report.

When is an Illinois corporation’s annual report due?

Within the 60 days before the first day of your anniversary month, filed together with the annual franchise tax.

The applicable legal fees may vary over time. For the most up-to-date fee information, please click here to verify the latest figures.

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Start your Incorporate in Illinois with CountSure

From Articles of Incorporation and a paid-in-capital structure that keeps your franchise tax low to bylaws, stock, EIN, and your annual report, CountSure handles Illinois incorporation start to finish.