Opening a Company in Illinois

To open a company in Illinois, you need to choose a name, appoint a Registered Agent, have an address in Illinois for the legal headquarters, and submit the Articles of Incorporation to the Illinois Department of Business Services.

You can check the availability of your chosen company name via the Office of the Illinois Secretary of State- Business Entity Search.

With its strong industrial vocation and Chicago as its largest city, Illinois has one of the highest tax levels in America. Costs such as rent, utilities, and employee salaries are also relatively high.

A company is not officially established until the Secretary of State of Illinois approves the Articles of Incorporation. The Articles must include the following information:

• Company Name: Must include "Corp" or "Inc."
• Legal Headquarters Address: A street address in Illinois. ExportUSA can provide this address.
• Operational Headquarters Address: The company's domicile is usually at the ExportUSA office.
• Opening Date: If you wish to open on a future date.
• Name and Address of the Registered Agent and Incorporator for Illinois: ExportUSA can provide both.
• Business Purpose.
• Number of shares authorized by the Illinois Department of Business Services.
• Names of Directors: Include names and addresses of the initial board members.
• Company Duration (optional): If you wish to dissolve the company on a specific date.

Following the approval of the Articles of Incorporation, the First Meeting of Shareholders is convened to elect the Board of Directors.

Annual Report, Calculation, and Payment of Franchise Tax

In Illinois, the Annual Administrative Report and Franchise Tax are submitted annually. The report updates information on Directors, Officers, Registered Agents, and the Number of Issued Shares.

The calculation of the Franchise Tax can be based on the paid-in capital value (with a tax rate between 0.1% and 0.15%) or on an "allocation factor," considering the company's gross activities and revenues.

The deadline for submission and payment is the day before the anniversary month of the company's opening.

Taxation in Illinois

Corporate income tax in Illinois is levied at a flat rate of 7%, plus a "Personal property replacement tax" of 2.5% for C-Corps and 1.5% for S-Corps. The Sales Tax rate in Illinois is 6.25%, usually with an additional local county or municipal tax. Personal income tax is flat at 4.95%. The Property Tax rate is 2.08%, the second highest in the United States. Illinois also taxes inheritances, with progressive rates up to 16% and a $4 million exemption.

The Illinois Economy in Brief

In 2022, Illinois' GDP reached $1,033 billion, growing by 9.27% compared to 2021. With a population of 12,514,663, the state has seen a 0.3% annual decline over the last five years, ranking 47th among U.S. states for growth rate. Despite the demographic decline, Illinois businesses employed 7,059,009 people in 2023. Manufacturing, real estate, and professional, scientific, and technical services were the main employment sectors. The state's unemployment rate was 4.4% in 2023.