Illinois Articles of Incorporation: Definition, Purpose

What are Illinois Articles of Incorporation?

Illinois articles of incorporation is a legal document that is filed with the Office of the Illinois Secretary of State to establish a business as a corporation. Once articles of incorporation are filed and approved by the state, the business can legally operate as a corporation. This means the corporation can apply for an EIN, open business bank accounts, and secure all necessary permits and licenses.

There are several types of business entities that a business owner can choose when establishing a new company. Corporations are a popular choice due to the following benefits:

1. Limited liability protection. Corporations are separate legal entities from the shareholders, directors, and officers who run the company. This means that if the business is involved in litigation, a bankruptcy, or debt collection, the personal assets of those running the company are protected. The only exceptions to limited liability protection are when damages occur due to personal liability for your own negligence or malpractice.
2. Tax benefits. Corporations in the United States are subject to a flat federal tax rate of 21% which is lower than the tax rate on most individuals. Corporations can also deduct business expenses from their taxable income to reduce the business’s overall tax liability.
3. Business security. The ownership of a corporation is structured around percentage of stock ownership. This means that transferring ownership of and ensuring the longevity of the business is easier than with other business entities.
4. Access to capital. Corporations have more access to funding than any other business entity because most corporations sell shares of the company to the public. This provides the opportunity to grow the business as well as save the business in cases of financial difficulties.

Corporations can be established as either an S Corp or a C Corp. The type of corporation you choose will depend on several factors like the size of your business and the amount of income you expect to generate. If you are unsure which corporation type to select or how to draft articles of incorporation for your business, you should always consult with an experienced business lawyer.

How Do I Find Articles of Incorporation in Illinois?

In Illinois, articles of incorporation are public record so anyone can search for this document for any corporation registered in the state. To find a corporation’s articles, you can follow the following steps:

1. Visit the Office of the Illinois Secretary of State website at ilsos.gov
2. Click on the link for business services
3. Under services, locate and click “Corp/LLC search”

From here, you can follow the directions to conduct a search within the database. Once you have found the business, you will be able to view important company information like the date filed, principal address, registered agent, and annual reports.

You can purchase the corporation’s certificate of good standing or view the annual reports and any other documents that have been filed for this corporation.

Does Illinois Require Articles of Incorporation?

Yes. Illinois requires articles of incorporation for any business that wishes to operate as a corporation. If you do not wish to file articles of incorporation, you can consider another business entity like an LLC, sole proprietorship, or partnership which do not require articles of incorporation.

Are Illinois Articles of Incorporation Public?

Yes. Articles of incorporation in Illinois are public documents. Anyone can search for a business organization on the Secretary of State website and request a copy of a company’s articles of incorporation. This means that the company registered agent, principal business address, and other information are all public record that can be viewed.

Illinois Articles of Incorporation Example

[Your Company Name]

ARTICLES OF INCORPORATION

OF

[YOUR COMPANY NAME]

An Illinois For-Profit Corporation

I. NAME

The name of this corporation is [Your Company Name].

II. PURPOSE

The purpose for which this corporation is organized is to engage in any lawful act or activity for which a corporation may be organized under the Business Corporation Act of the State of Illinois.

III. AUTHORIZED SHARES

This corporation is authorized to issue two classes of shares designated as "Common Stock" and "Preferred Stock." The total number of shares that this corporation is authorized to issue is [Total Number of Shares], of which [Number of Common Shares] shall be Common Stock, and [Number of Preferred Shares] shall be Preferred Stock.

A. Common Stock

1. Voting Rights: Each holder of Common Stock shall be entitled to one vote for each share of Common Stock held on all matters submitted to a vote of shareholders.

B. Preferred Stock

1. The Preferred Stock may be issued in one or more series, each with such designation, rights, preferences, and limitations as the Board of Directors may determine by resolution. The Board of Directors is expressly granted the authority to determine and alter the rights, preferences, privileges, and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock.

IV. REGISTERED OFFICE AND AGENT

The address of the initial registered office of this corporation in the State of Illinois is:

[Registered Office Street Address] [City, State, Zip Code]

The name of its initial registered agent at that address is [Registered Agent's Name].

V. INCORPORATOR

The name and address of the incorporator are:

[Incorporator's Name] [Incorporator's Street Address] [City, State, Zip Code]

VI. DIRECTORS

The number of directors constituting the initial board of directors is [Number of Directors], and the names and addresses of the persons who are to serve as the initial directors are:

[Director 1's Name] [Director 1's Street Address] [City, State, Zip Code]

[Director 2's Name] [Director 2's Street Address] [City, State, Zip Code]

[Additional Directors, if applicable]

IN WITNESS WHEREOF, the undersigned, being the incorporator hereinbefore named, has executed these Articles of Incorporation on this [Day] day of [Month], [Year].

[Incorporator's Name]

[Note: This is a basic example of Articles of Incorporation for a for-profit business in Illinois. Depending on the specific circumstances and requirements of your company, additional provisions may need to be included. It is always recommended to consult with an attorney or other qualified professional to ensure your Articles of Incorporation comply with all applicable laws and regulations.]

How Do I Fill Out Articles of Incorporation in Illinois?

To fill out articles of incorporation in Illinois, you can follow these steps:

• Step 1. Choose a corporation name. Business names must be unique and available to use. The name must also include the word corporation, company, incorporated, or limited. Abbreviations of these words are also permitted.
• Step 2. Describe the business purpose. In Illinois, business owners can use either a general business purpose description or a specific description. An example of a general business purpose is “to engage in any lawful activity”. A general purpose will provide the business with flexibility in its operations. A specific business purpose should include a detailed description of what types of services the corporation will provide customers.
• Step 3. Appoint a registered agent. The registered agent is the person designated to receive legal documents on behalf of the corporation. The agent can be one of the owners or directors of the corporation or you can hire a registered agent service. The agent’s address must be a physical address where documents can be received.
• Step 4. Incorporator information. The incorporator is the person drafting and filing the articles of incorporation. Sometimes the business owner completes the articles on their own, but some choose to hire an attorney to do the job. The incorporator must also sign the articles of incorporation before submitting the form to the Secretary of State.
• Step 5. Determine the number of shares of stock. All corporations in Illinois must issue stock which represents ownership in the company. When issuing stock, the corporation must decide the class of shares, the authorized number of shares, the shares that will be issued, and how they will be received. Illinois corporation owners do not have to disclose the par value (lowest legal price) of the stock.
• Step 6. Assign directors and officers. Illinois doesn’t require a list of directors and officers on articles of organization, but some businesses choose to include this information. If you do not list at least one director, the incorporator will be listed as a director by default.

How Do I Submit Articles of Incorporation in Illinois?

The quickest way to submit your articles of incorporation in Illinois is online through the Secretary of State website. The website provides a step-by-step walk through to draft and submit your articles. It is important that you have all the required information readily available while completing this process.

Illinois charges a $150 routine service filing fee. You can expedite your application for an additional $100. This fee is non-refundable and can be paid online by any major credit card.

Many business owners choose to consult with an attorney before filing articles if incorporation. Different types of businesses may require additional information in the articles. Omitting information or making a mistake could result in extensive delays and additional filing fees.

An experienced attorney will be familiar with Illinois business laws and know exactly how to draft and file articles of incorporation properly. Hiring an attorney to draft and file articles of incorporation can save a business time and money and allow the business owner to tackle other tasks like applying for permits and licenses and preparing for everyday operations.

Relevant Laws

• 805 ILCS 5/ Article 2. (Formation of Corporations)
• 805 ILCS 5/ Article 5. (Office and Agent)
• 805 ILCS 5/ Article 7. (Shareholders)
• 805 ILCS5/ Article 8. (Directors and Officers)
• 805 ILCS5/ Article 8. (Reports)