Illinois — Registration & Annual Compliance

The authority to form and register business entities in Illinois is vested in the Illinois Secretary of State, Department of Business Services. This office processes both domestic (formed under Illinois law) and foreign (formed in another jurisdiction, seeking to transact business in Illinois) entity filings.

Governing statutes:

• For corporations, the Illinois Business Corporation Act of 1983 (805 ILCS 5) governs formation, operation, and reporting. The Act specifies that Articles of Incorporation for a domestic corporation must be filed with the Secretary of State (see 805 ILCS 5/2.10). Foreign corporations seeking to qualify to do business in Illinois must submit an Application for Authority to Transact Business pursuant to 805 ILCS 5/13.05.

• For LLCs, the Illinois Limited Liability Company Act (805 ILCS 180) governs both organization and registration. A domestic LLC files Articles of Organization under 805 ILCS 180/5-1. Foreign LLCs must apply for authority under 805 ILCS 180/45-5, submitting their application to the Secretary of State.

Filing office and forms:

• All business entity filings—whether for domestic formation or foreign qualification—are processed by the Secretary of State's Department of Business Services. Forms for corporations (e.g., BCA‑2.10) and LLCs (e.g., LLC-5.5 for foreign LLCs) are available on the Secretary of State’s website. Only the Secretary of State may accept and approve entity formation or qualification filings for Illinois.

Entity types covered:

• The Secretary of State’s Business Services Department maintains registration for corporations, LLCs, limited partnerships (LPs), and limited liability partnerships (LLPs). Each entity type is governed by its respective Illinois statute. This section focuses on corporations and LLCs—the most common business forms—but the office handles filings for all of the above.

The Department of Business Services at the Office of the Secretary of State is the gatekeeper for both domestic entity formation and foreign entity qualification in Illinois.

Source: Illinois Secretary of State — Business Services Source: Illinois Business Corporation Act of 1983, 805 ILCS 5 Source: Illinois Limited Liability Company Act, 805 ILCS 180

Not every out-of-state ("foreign") corporation or LLC doing something in Illinois is required to register or qualify with the Secretary of State. Illinois law (805 ILCS 5/13.75) lists a series of activities that, by statute, do not constitute "transacting business" for purposes of foreign qualification. This means that a foreign entity engaged solely in these activities does not need to file for authority with the Illinois Secretary of State.

Key carve-outs — examples of activities not considered transacting business in Illinois:

• Maintaining, defending, or settling a lawsuit.
• Holding meetings of directors or shareholders or carrying on internal corporate affairs.
• Maintaining bank accounts.
• Having offices or agencies for transfer of securities or for the registration of the corporation's own securities.
• Selling through independent contractors.
• Soliciting orders (if such orders require acceptance outside the state before they become contracts).
• Securing or collecting debts.
• Transacting business in interstate commerce.
• Conducting an isolated transaction that is completed within 120 days and is not repeated.

The statute provides a full list and additional nuance (for instance, around property ownership and subsidiary relationships). Critically, if a foreign corporation or LLC engages in business activities in Illinois beyond those specifically listed in Section 13.75, registration may be required. There is no bright-line revenue or employee threshold; the analysis turns on the type of activities, not just quantitative presence.

If there is any doubt as to whether your entity's planned Illinois activities require qualification, Section 13.75 is the place to start your review. Engaging solely in these carve-out activities does not trigger the duty to register, but stepping beyond them likely does. Always refer directly to the current statute for the precise language and potential statutory updates.

Source: 805 ILCS 5/13.75

To form a domestic corporation or limited liability company (LLC) in Illinois, the organizer must file the appropriate formation document with the Secretary of State's Department of Business Services. The requirements, forms, and fees differ between corporations and LLCs, though both processes are governed by Illinois statute and official agency procedures.

Corporation formation:

• Form: Articles of Incorporation (Form BCA 2.10)
• Content required: Corporate name (must be distinguishable under 805 ILCS 5/4.05), purpose, registered agent and address (see 805 ILCS 5/5.05 for agent requirements), number of authorized shares, and incorporator details (805 ILCS 5/2.10).
• Filing fee: The standard filing fee is $150. Expedited service (24-hour processing) is available for an extra $100, but only for in-person filings at the Springfield office. Fee details are provided on Form BCA 2.10's instructions and the Secretary of State's Business Services fee schedule.
• Filing methods and address: Submissions can be made online through Cyberdrive Illinois, by mail to the Secretary of State, Department of Business Services, 501 S. Second St., Rm. 350, Springfield, IL 62756, or in person at that address for expedited processing.

LLC formation:

• Form: Articles of Organization (Form LLC-5.5)
• Content required: LLC name (subject to distinguishability requirements per 805 ILCS 180/1-10), principal place of business, registered agent and address (see 805 ILCS 180/1-35), management structure, purpose, and duration if not perpetual (805 ILCS 180/5-5, 5-15).
• Filing fee: The filing fee is also $150. Expedited processing for LLCs (24-hour) is $100 extra, in person in Springfield only. Fees are set by statute and listed on Form LLC-5.5's instructions.
• Filing methods and address: Online via Cyberdrive Illinois, by mail to the same Springfield address, or in person for expedited filings.

Additional notes:

• Every formation filing must designate a registered agent with a physical address in Illinois (see statutory cites above).
• Entity names must be distinguishable from existing registered names, per the statutory standard; searchable through the Secretary of State's name availability tool online.
• Filing fees and processing times change from time to time; always confirm on the official Secretary of State site or in the relevant form instructions to avoid rejected filings or unexpected costs.

Source: Illinois Secretary of State — Business Corporation Forms and Fees Source: Illinois Secretary of State — LLC Forms and Fees Source: 805 ILCS 5/2.10, 5/4.05, 5/5.05 (Corporations) Source: 805 ILCS 180/1-10, 180/1-35, 180/5-5, 180/5-15 (LLCs) Source: Business Corporation Act filing fee schedule

A foreign entity (one formed outside Illinois) must register with the Illinois Secretary of State before transacting business within Illinois. Both foreign corporations and limited liability companies (LLCs) must follow a similar application process governed by Illinois law, but with entity-specific requirements.

Application for Authority (Corporations): Foreign corporations must submit an “Application for Authority to Transact Business” (Form BCA 13.15). This application requires:

• The corporation’s name (and an assumed name filing if not available in Illinois)
• The jurisdiction and date of original formation
• Address of the principal office in the home state
• Name and Illinois street address of the registered agent
• A description of the proposed business activities in Illinois

Application for Admission (LLCs): Foreign LLCs apply using “Application for Admission to Transact Business” (Form LLC-45.5), providing similar core information.

Required Certificate: Both corporations and LLCs must include a certificate of good standing or existence from the home jurisdiction, dated within 60 days of filing, per 805 ILCS 5/13.15 (corporations) and 805 ILCS 180/45-5 (LLCs).

2024–2026 Filing Fees Update:

• As of January 1, 2026, the fee for both foreign corporations and foreign LLCs to file for authority/admission is $150. This reflects a statutory change from the prior $175 rate for corporations. Additional fees apply for assumed name filings if necessary, and expedited processing is available for an extra $100 in person at the Springfield office. Elimination of the Illinois corporate franchise tax also takes effect January 1, 2026.
• Fees and real-time instructions are posted in the Secretary of State’s published schedule and on the instructions for Forms BCA 13.15 and LLC‑45.5.

Submission: Applications may be filed by mail to the Secretary of State’s Department of Business Services (Springfield address), or online via Cyberdrive Illinois if available. A registered agent with a physical Illinois address is required as part of the registration.

Legal Effect: Qualification as a foreign entity is required before maintaining lawsuits and legal rights in Illinois (805 ILCS 5/13.70 for corporations), and penalties exist for transacting business before qualifying. Specialized entities (LPs, LLPs) have parallel but different procedures.

Source: Illinois Secretary of State — Foreign Corporation and LLC Forms and Fees Source: 805 ILCS 5/13.15 (Corporations) Source: 805 ILCS 180/45-5 (LLCs) Source: Business Corporation Act filing fee schedule

Every domestic and foreign corporation or LLC registered to do business in Illinois must continuously maintain both a registered agent and a registered office within the state. This requirement is set by statute and is an ongoing prerequisite for good standing under Illinois business entity law.

Statutory requirements — who can serve: For both corporations and LLCs, the registered agent can be either an individual who resides in Illinois or a corporation/LLC authorized to transact business in Illinois with a business office identical to the registered office (see 805 ILCS 5/5.05 for corporations; 805 ILCS 180/1-35 for LLCs). The registered office must be a physical street address in Illinois (not a P.O. Box). The agent’s name and address must be listed in the entity’s formation or qualification filing and must be kept current.

Duties, changes, and updates: The registered agent is the party authorized to receive service of process, legal documents, and official state mail on behalf of the entity. If there is any change to the agent or registered office (including agent resignation), the entity must promptly file the appropriate statement (Form BCA 5.10/5.20 for corporations, Form LLC-1.36/1.37 for LLCs) with the Secretary of State. As of 2024–2026, the filing fee for a change of registered agent or office is $25 according to SOS form instructions; always check the official instructions for current fees.

Consequences for lapse — Secretary of State as agent; risk of administrative dissolution/revocation: If an entity fails to maintain a registered agent or office, or the agent cannot be found with reasonable diligence, the Illinois Secretary of State becomes the entity’s agent for service of process by statute (805 ILCS 5/5.25 for corporations; 805 ILCS 180/1-50 for LLCs). Persistent failure to cure this deficiency is grounds for administrative dissolution of a domestic entity or revocation of authority for a foreign entity (see 805 ILCS 5/12.35 for corporations, 805 ILCS 180/35-1 for LLCs). The statutory text does not specify an automatic grace period—timely correction is required to protect good standing.

Maintaining an Illinois registered agent and office is a fundamental compliance obligation. Every registration, change, and corrective filing should align with current statutory requirements and the Secretary of State’s published guidance.

Source: 805 ILCS 5/5.05 (Corporations – Registered Agent and Registered Office) Source: 805 ILCS 180/1-35 (LLCs – Registered Agent Requirement) Source: 805 ILCS 5/5.25 (SOS as agent on failure) Source: 805 ILCS 180/1-50 (SOS as agent on failure – LLCs) Source: 805 ILCS 5/12.35 (Administrative Dissolution – Corporations) Source: 805 ILCS 180/35-1 (Dissolution/Revocation – LLCs) Source: Illinois SOS Form BCA 5.10/5.20 Instructions

All Illinois corporations and LLCs—both domestic (formed under Illinois law) and foreign (formed elsewhere but registered to do business in Illinois)—must file an annual report with the Illinois Secretary of State and pay the appropriate fee to maintain good standing. The precise mechanics, deadlines, and penalties differ across entity type and are established by statute and Secretary of State instructions.

1. Filing Deadlines/Window

• LLC: The annual report must be filed "within the 60-day period immediately preceding the first day of the anniversary month" of the LLC's formation (for domestic) or admission (for foreign). (805 ILCS 180/50-1)
• Corporation: The annual report must be filed prior to the first day of the anniversary month. (805 ILCS 5/14.05; see also annual report instructions for timing details. Form BCA-14.01 sets procedures for electing an "extended filing month," but such an election must be made before the anniversary month.)

2. Fees

• LLC: $75 for the base annual report filing, plus $50 for each active series. (805 ILCS 180/50-10; see SoS instructions)
• Corporation: $75 for annual report (for-profit, domestic and foreign). Nonprofit corporations: $10 annual report fee when timely. Franchise tax for for-profit corporations is based on paid-in capital; the statutory formula is in 805 ILCS 5/15.35 and 5/15.65. (805 ILCS 5/14.05, 5/15.10)

3. Late Filing Penalties

• LLC: If not filed by the start of the anniversary month, the entity becomes delinquent. A $100 penalty applies if not cured by the first day of the second month after the anniversary month, plus $100 for each year or fraction thereof until brought back into good standing or reinstated. (805 ILCS 180/50-15)
• Corporation: For-profit corporations pay a penalty equal to 10% of any unpaid franchise tax after the anniversary month deadline. Nonprofit corporations owe a $3 late fee beyond the due date. Some details (like extra nonprofit penalties or reinstatement amounts) are not spelled out in the statute or instructions. Unable to confirm as of 2026-06-16. (805 ILCS 5/15.10; Form NFP-114.05)

4. Administrative Dissolution or Revocation

• LLC: If the annual report and any penalties are not timely filed and paid, the Secretary of State may administratively dissolve the LLC. (805 ILCS 180/35-25)
• Corporation: Missing annual report filings or failure to pay required fees/tax can lead to administrative dissolution (domestic) or revocation of authority (foreign) under Illinois law. (805 ILCS 5/12.35)

5. Reinstatement Procedures

• LLC: Reinstatement requires filing an application, paying all missed reports and fees, accumulated penalties, and a $200 reinstatement fee. The LLC’s status is retroactive upon reinstatement—per statute, "the existence of the limited liability company shall be deemed to have continued without interruption". (805 ILCS 180/35-40)
• Corporation: Statutory rules for for-profit corporation reinstatement fees are not set in the publicly posted sources or current annual report instructions. Unable to confirm as of 2026-06-16.

Note: No statutory provision requires the Secretary of State to send reminder notices for annual reports as of 2026-06-16. Docketing your entity’s anniversary month on a recurring internal calendar is the safest compliance practice.

Source: 805 ILCS 180/50-1, 50-5, 50-10, 50-15 (LLC annual report requirements, fees, and penalties) Source: 805 ILCS 180/35-25, 35-40 (LLC administrative dissolution and reinstatement) Source: 805 ILCS 5/14.01, 14.05, 15.05, 15.10 (corporate annual report requirements and penalties) Source: 805 ILCS 5/12.35 (corporate dissolution for failure to comply) Source: Form NFP-114.05 (Nonprofit Corporation Annual Report Instructions) Source: Form BCA-14.01 (Extended filing month for corporations)

Any corporation or LLC—whether newly formed in Illinois or qualified as a foreign entity—must separately register for state tax accounts with the Illinois Department of Revenue (IDOR) and, if hiring employees, with the Illinois Department of Employment Security (IDES). This is distinct from formation or qualification filings with the Secretary of State, and failure to complete these registrations can trigger penalties or bar an entity from lawfully operating in Illinois.

1. Illinois Department of Revenue (IDOR) — State Tax Registration:

• All entities doing business in Illinois and subject to state taxes (income tax, sales and use tax, or withholding tax) must register with IDOR.
• Registration is completed online via the Illinois Tax Registration application (MyTax Illinois portal). The portal covers business income tax, sales and use tax, and withholding tax.
• The same portal administrates permits such as the Illinois Sales Tax Permit (required to collect state sales tax) and allows registration for Illinois income tax withholding accounts.
• The statutory basis for tax registration is found in multiple places: see 35 ILCS 5 (Illinois Income Tax Act) and 35 ILCS 105 (Use Tax Act). The Department’s own "Registration" page provides an authoritative step-by-step guide.

2. Illinois Department of Employment Security (IDES) — Employer/SUTA Registration:

• Any entity that pays wages to an employee in Illinois must register with IDES for state unemployment insurance (UI/SUTA) and comply with wage reporting/new hire requirements.
• IDES business registration is also completed through MyTax Illinois: users select "Register for Unemployment Insurance" within the portal.

3. Combined Registration — Mechanics and Links:

• MyTax Illinois (mytax.illinois.gov) is the single online portal for both IDOR and IDES business registrations. Upon entity formation/qualification, apply for tax ID, sales tax permit, and—if needed—unemployment accounts in parallel.
• Entities need assigned FEIN (IRS Employer Identification Number) in hand before using MyTax Illinois.
• No separate paper filings are required for most entities as of 2026, but certain specialty business licenses (outside the tax/withholding/UI process) may require additional steps not covered here.

4. Consequences of Lapse:

• Failing to register for required business tax or employer accounts can result in state enforcement actions, denial of sales tax collection authority, or personal liability for officers in some circumstances (see 35 ILCS 735/3-7 for tax collection enforcement).

Tip: Register with IDOR and IDES as soon as the entity receives its Secretary of State file number to avoid operational delays. Use the official MyTax Illinois portal, not third-party sites.

Source: Illinois Department of Revenue — Business Registration Instructions Source: MyTax Illinois Portal Source: Illinois Department of Employment Security — Employer Registration Source: 35 ILCS 5 (Illinois Income Tax Act) Source: 35 ILCS 105 (Use Tax Act) Source: 35 ILCS 735/3-7 (Tax enforcement liability)

Illinois business entities—whether domestic (formed in Illinois) or foreign (formed elsewhere and qualified here)—must use two separate online government portals for annual compliance and tax registration: Cyberdrive Illinois and MyTax Illinois. Knowing when and how to enroll in each system removes a common point of confusion.

1. Cyberdrive Illinois — Illinois Secretary of State Business Filings Cyberdrive Illinois, accessed via the official ilsos.gov domain, provides online filing for a range of business entity needs.

• All corporations, LLCs, LPs, and LLPs—both domestic and foreign—can submit annual reports, file changes to registered agent or office, and order certificates through this portal. Annual reports specifically are completed online by selecting the entity type (corporation or LLC) and entering the entity’s Illinois file number (found on the Secretary of State’s confirmation or by searching their public records). Payment is by credit/debit card or e-check.
• Certain initial filings, such as original Articles of Organization or Application for Authority, sometimes require starting the process online and finishing by mail or in person, depending on the filing type and system updates. As of June 2026, online submission is standard for annual reports and most changes for active companies, but the portal’s annual report and business filing home pages confirm which transactions are eligible to file online.

2. MyTax Illinois — Revenue and Employer Account Registration MyTax Illinois is the official portal for the Illinois Department of Revenue and Department of Employment Security.

• Entities that will collect Illinois sales tax, pay state income tax, or withhold payroll taxes for Illinois employees must register separately through this site. MyTax Illinois requires the entity’s EIN and Illinois file number to complete new business registration.
• Through this portal, businesses file sales/use and income tax returns, register for taxes, and report new hires for unemployment insurance. The portal instructions specify that most businesses should register online, though some specialty licenses and circumstances may require supplemental paperwork.

Takeaway: An Illinois entity should enroll with Cyberdrive Illinois immediately for annual report and entity change filings, and with MyTax Illinois as soon as it hires employees or has Illinois tax liability. These enrollment steps keep the entity in good standing and enable ongoing compliance. Online-only options continue to expand—each portal’s home page lists the current eligible transactions as of June 2026.

Source: Illinois Secretary of State — Business Services portal Source: Cyberdrive Illinois — Annual Report Filing Source: MyTax Illinois Portal

Any Illinois business—domestic (formed in Illinois) or foreign (qualified to do business in Illinois)—that sells tangible personal property at retail in the state, or is otherwise required to collect Illinois sales tax (Retailers' Occupation Tax), must register with the Illinois Department of Revenue (IDOR) to obtain a Certificate of Registration, commonly referred to as an Illinois seller's permit.

Who must register:

• All corporations and LLCs making retail sales of tangible goods to Illinois customers must register before transacting taxable sales, regardless of where they are formed, if they are "engaged in the business" as defined by state law.
• Most brick-and-mortar and online retailers need to register. Out-of-state (remote) sellers may also be required if they have a physical presence, employees, inventory, or otherwise meet Illinois’s definition of doing business, though specific sales or transaction threshold figures for economic nexus are not confirmed in the primary state registration resource. Unable to confirm as of 2026-06-16.

Application process:

• Sales tax registration is done through MyTax Illinois (mytax.illinois.gov). The business user creates a MyTax Illinois account and completes the Business Registration application, covering the Retailers’ Occupation Tax and other applicable taxes.
• Required information includes the federal EIN, the Illinois Secretary of State file number (for entities formed/qualified through the Secretary), business addresses, and a description of sales activities.
• Upon approval, IDOR issues a Certificate of Registration (seller’s permit) which must be posted at every business location. Each location receives a unique account number for sales/use tax reporting.

When to register:

• Entities should complete registration with IDOR before collecting monies from any taxable retail transactions in Illinois. The business must have its Certificate of Registration on hand and posted for inspection at or before making its first Illinois sale.

Other notes:

• The same MyTax Illinois registration is used for other state taxes (such as income tax withholding) if needed. See the state registration instructions for which business types this covers; specialty licenses may require separate processes.
• Illinois imposes additional local sales taxes in many jurisdictions, but all Illinois sales tax collection starts with this state registration.
• Operating without the required seller's permit can subject an entity to penalties under 35 ILCS 120/2a, but specifics about personal liability for officers or statutory penalty amounts are not confirmed in the IDOR business registration publication. Unable to confirm as of 2026-06-16.

For the most current requirements, forms, and statutory definitions—including guidance for remote sellers and economic nexus—consult the IDOR’s Business Registration guidance and the current text of the Retailers’ Occupation Tax Act.

Source: Illinois Department of Revenue — Sales Tax Registration Source: MyTax Illinois Portal Source: 35 ILCS 120/2a (Retailers’ Occupation Tax Act — Registration)

Any business operating in Illinois under a name other than its official entity name must register an assumed or "doing business as" (DBA) name. The process—and its penalties for neglect—differs based on entity type and jurisdiction level.

Corporations — Assumed Name with Secretary of State: Domestic and foreign corporations must file an Application to Adopt an Assumed Corporate Name with the Illinois Secretary of State, as authorized under 805 ILCS 5/4.15. The application must clearly state the assumed name and requested effective date. Statute sets a peculiar renewal cycle: any assumed name filing expires on December 31 of the next year ending in 0 or 5 (e.g., 2025, 2030) and must then be renewed every five years. If renewal is missed, the name is cancelled administratively by the Secretary of State, and the entity loses authority to use it. Fees depend on both the initial adoption year and proportion of term remaining—always check the SOS fee schedule for live rates, as the statute references brackets that change over time.

LLCs — Assumed Name under LLC Act: Illinois LLCs (domestic or foreign) adopt assumed names with the Secretary of State as well, but under 805 ILCS 180/1-20. The application must list the LLC’s true name, the intended assumed name, and specify its use in Illinois. Like corporations, expiration is tied to the next December 31 divisible by five. However, the LLC statute is notably silent about an automatic cancellation for failure to renew—if renewal is missed, the statute simply forbids use of the assumed name, but does not spell out an immediate administrative process. There is no stated grace period. Fee amounts mirror the fluctuating corporate system and require review of the current official SOS schedule.

Sole Proprietors and General Partnerships — County-Level (Assumed Business Name Act): For unincorporated businesses and general partnerships, registration is not with the state but with the county clerk as set out in the Assumed Business Name Act (805 ILCS 405/1). The process requires:

• Filing a certificate with the county clerk in each county where business is transacted.
• Publishing notice of the assumed name intent in a local newspaper, once a week for three consecutive weeks (805 ILCS 405/3).
• Filing proof of publication with the county clerk within 50 days (805 ILCS 405/4).

Failure to comply exposes owners to criminal misdemeanor penalties (805 ILCS 405/6) for each week the business operates unregistered, and for knowingly filing false or incomplete statements. The Act contains no civil fine, but persistent failure can create hurdles in enforcing contracts or defending lawsuits.

Key distinctions:

• Corporations/LLCs file and renew assumed names at the state level; penalties are loss of assumed name rights (and, for corporations, potential administrative cancellation by the Secretary of State).
• Sole proprietors/partnerships must file with the county and fulfill a publication requirement; penalties here are criminal (misdemeanor).
• Every entity must monitor the five-year cycle; the live timing of expiration is governed by the next December 31 ending in 0 or 5, as written in statute.
• Fees change—always defer to the current Secretary of State fee schedule or county clerk as relevant.

Source: 805 ILCS 5/4.15 (Corporate Assumed Names) Source: 805 ILCS 180/1-20 (LLC Assumed Names) Source: 805 ILCS 405/1 et seq. (Assumed Business Name Act) Source: Business Services Fee Schedule

Illinois Franchise Tax (Phase-Out and Repeal 2024–2026)

Between 2024 and 2025, Illinois continued to impose an annual franchise tax on domestic corporations (formed in Illinois) and foreign corporations registered to do business in the state, under 805 ILCS 5/15.35 and 5/15.65. However, the tax is being phased out, with complete repeal effective January 1, 2026. Key details below reflect the law as of June 2026 and the recent legislative changes:

Who Owed the Franchise Tax (through December 31, 2025):

• All domestic and foreign for-profit corporations authorized to transact business in Illinois owed the franchise tax on paid-in capital represented in Illinois. LLCs, nonprofits, and partnerships were never subject to this tax.

Calculation and Minimums (updated 2025–2026):

• The tax rate remained $1.50 per $1,000 (0.15%) of Illinois paid-in capital, with a $25 minimum annual payment.
• As of January 1, 2025, the exemption tier for franchise tax liability was increased: the first $10,000 of liability is exempt each year. (See Illinois FY2026 Budget p.319.)
• For annual report filings due in 2026, no franchise tax payment is required—the liability is repealed for all tax periods ending on or after January 1, 2026.

Phase-Out and Full Repeal:

• Under Public Act 101-0009 and subsequent legislative changes (HB2846), the franchise tax is fully repealed effective January 1, 2026. Corporations do not pay franchise tax on annual report filings or upon increases in paid-in capital for any tax period beginning on/after that date.
• No penalties or interest for franchise tax liabilities are assessed for periods after December 31, 2025. For notices served after January 1, 2026, if any are issued, the interest is set by reference to the Income Tax Act but applies only to the legacy liability period.

Deadlines and Payment (final cycle in 2025):

• The last franchise tax payment owed is with the 2025 annual report for a corporation with a tax period ending before January 1, 2026.
• After repeal, only the $75 annual report fee remains for domestic and foreign corporations.

Penalties and Compliance (2025 and before):

• For late or unpaid franchise tax (through 2025), the 10% penalty on underpaid amounts still applies (805 ILCS 5/15.10). After repeal, no further penalties are assessed for franchise tax periods.
• Failure to pay franchise tax or file an annual report (pre-2026) could still trigger administrative dissolution/revocation for legacy periods, but those provisions are expected to sunset in practice.

Takeaway:

• The Illinois franchise tax for corporations is fully repealed effective January 1, 2026. For tax years 2024 and 2025, limited liability applies as above; from 2026 forward, no franchise tax payment is owed—only the annual report fee. Always consult the current statutory text and Illinois Secretary of State fee schedule for final guidance during transition years.

Source: 805 ILCS 5/15.35, 5/15.65, 5/15.10 (legacy franchise tax rules; note repeal) Source: Illinois FY2026 Budget, p.319 (phase-out/exemption) Source: HB2846 (full franchise tax repeal/enactment) Source: Business Services Fee Schedule — Secretary of State

Every employer with one or more employees in Illinois—including both domestic entities formed in Illinois and foreign entities registered to do business in the state—must register with the Illinois Department of Employment Security (IDES) for unemployment insurance (UI, also known as SUTA). The process, liability thresholds, and penalties were updated by legislative and regulatory changes effective between 2024 and 2026.

Who must register and when (2024–2026): Employers are required to register with IDES and obtain an unemployment insurance account if they:

• Pay $1,500 or more in total gross wages in any calendar quarter, OR
• Employ at least one person in any 20 calendar weeks in a calendar year.

Special thresholds apply to certain employer types:

• Domestic (household) employers: $1,000 or more in a quarter.
• Agricultural employers: $20,000 or more in wages in a calendar quarter, OR 10 or more employees during any 20 weeks.

(See "IDES Employer Resources — Taxes & Reporting" and 820 ILCS 405/205, 820 ILCS 405/211.)

Registration process: Registration is performed electronically via the MyTax Illinois portal (mytax.illinois.gov). Required information includes the entity’s FEIN and Secretary of State file number. Upon approval, IDES issues an account number for UI reports and contributions. Timely registration is required to avoid enforcement actions and penalties.

New hire reporting requirement (2024–2026): Any employer who hires or rehires an individual (following a break of at least 60 days) must report the new hire within 20 calendar days of the hire date. Reporting is through the Illinois New Hire Reporting Directory or MyTax Illinois. This applies equally to all business entities with Illinois-based employees.

Penalties for noncompliance (as amended):

• Failure to report new hires: civil penalty of $15 per unreported employee.
• Knowingly conspiring with an employee not to report: Class B misdemeanor and $500 fine per employee.
• Failure to register, file, or pay UI: additional statutory penalties under 820 ILCS 405/1402, including fines and interest.

Material update effective July 1, 2026: Employer 401(k) contributions are excluded from UI wage calculation starting July 1, 2026; such contributions were previously included as wages.

Employers should track official IDES and New Hire Reporting updates for live process changes and penalty adjustments. Compliance with threshold and reporting rules is essential to maintain eligibility to employ and to avoid financial and criminal penalties.

Source: IDES Employer Registration — MyTax Illinois Source: IDES Employer Resources — Taxes & Reporting Source: Illinois New Hire Reporting Directory Source: 820 ILCS 405/1402 (Unemployment Insurance Act — Penalty) Source: 820 ILCS 405/205 (UI liability general employers) Source: 820 ILCS 405/211 (UI liability domestic/agricultural) Source: 820 ILCS 405/1801.1(D) (New hire reporting penalties)

Illinois does not impose a separate annual franchise tax, minimum tax, or ongoing state-level entity fee on limited liability companies (LLCs), other than the required $75 annual report fee. This is in contrast to the franchise tax regime Illinois applies to corporations (as governed by 805 ILCS 5/15.35 and 5/15.65), which requires corporations to pay an annual franchise tax based on paid-in capital in addition to their annual report fee.

Annual compliance obligation for LLCs:

• The only recurring statewide fee that a domestic or foreign LLC must pay to remain in good standing is the annual report fee, currently set at $75 (per 805 ILCS 180/50-10).
• There is no statutory requirement for an additional franchise, privilege, or minimum entity tax or fee for LLCs. No provision in the Illinois Limited Liability Company Act (805 ILCS 180) imposes any such recurring charge. The fee table provided by the Illinois Secretary of State likewise lists only the annual report fee, with no additional standing annual tax on LLCs.
• The confusion arises because corporations are subject to both an annual report fee ($75) and a franchise tax (minimum $25, as discussed in the corporation franchise tax section). For LLCs, the $75 annual report fee is the full extent of annual statewide fees. However, series LLCs must pay an additional $50 per active series with each annual report filing (see 805 ILCS 180/37‑40(f) and 805 ILCS 180/50-10).

Local taxes:

• Some local governments in Illinois (such as the City of Chicago) may impose business license fees or local taxes on LLCs, but there is no additional state-level annual LLC fee or entity tax outside the annual report fee as of 2026.

Key statutory authority:

• Annual report and fee: 805 ILCS 180/50-1 (report requirement); 805 ILCS 180/50-10 (fee amount).
• Official Secretary of State fee schedule: under “Limited Liability Companies,” only annual report and series fees are listed.

To summarize, for annual state-level compliance, Illinois LLCs owe only the annual report fee (and series fee if applicable), with no separate franchise or minimum entity tax imposed by the state as of June 2026.

Source: 805 ILCS 180/50-10 (Annual report fee for LLCs) Source: Illinois Secretary of State — Fee Schedule (LLC section)

In Illinois, every domestic or foreign entity (corporation, LLC, LP, or LLP) must comply with strict name requirements before submitting formation or qualification documents to the Secretary of State, Department of Business Services. Name issues are a common reason for rejected filings, so understanding both statutory standards and the official process protects against costly delays.

Statutory distinguishability — core rules:

• A corporation’s name must be "distinguishable upon the records" of the Secretary of State from the name of any other registered entity and from names already reserved, as set out in 805 ILCS 5/4.05. The statute bars names that are not materially different in appearance or sound. Minor changes (e.g., pluralization or adding geographic terms) do not make a name distinguishable if it remains confusingly similar (see 805 ILCS 5/4.05(a)). The Secretary of State has broad statutory discretion to determine what constitutes "distinguishable," and the office will reject names deemed deceptively similar to existing entities, even if technically different.
• LLCs must comply with 805 ILCS 180/1-10, which sets a similar standard of distinguishability. The name must also contain "Limited Liability Company," "L.L.C.," or "LLC." If forming a series LLC, each series name must "contain the entire name of the limited liability company, as set forth in its articles of organization" and must be distinguishable from both the parent and all other series (805 ILCS 180/37‑40(e)).
• Certain terms—such as "bank," "insurance," or words implying government affiliation—may trigger additional licensing or be outright barred under statute and Secretary regulations.

Searching names and practical tips:

• The Secretary of State provides a public Corporate/LLC Name Search tool on its website. This search is advisory only; final approval is determined during the filing process, and the database may not reflect pending or same-day filings. File promptly or use a name reservation for best protection.

Name reservation process and fee (2026):

• An applicant can reserve a name before filing by submitting Form BCA 4.10 (corporation) or Form LLC-1.15 (LLC), as linked in the Secretary’s name procedures FAQ. Reservation grants exclusive rights to the name for 90 days and cannot be renewed (805 ILCS 5/4.10; 805 ILCS 180/1-15).
• The fee for reserving a name is $25, confirmed on the Secretary of State’s official fee schedule (see "Reservation of Name"). Only the person who files the reservation, or their transferee, can use the name during the 90-day window.

Practice note: Complete both a thorough database check and, if there’s any risk of delay, file a reservation to protect your intended name while finalizing the entity’s documentation. Name rules are applied strictly, and relying solely on informal checks often leads to surprises at the filing stage.

Source: Illinois Secretary of State — Name Availability FAQ and Forms Source: 805 ILCS 5/4.05, 5/4.10 (Corporations) Source: 805 ILCS 180/1-10, 180/1-15, 180/37‑40(e) (LLCs & series LLCs) Source: Secretary of State — Fee Schedule, "Reservation of Name"

A foreign entity—meaning a corporation or limited liability company (LLC) formed outside Illinois—that transacts business in Illinois before qualifying with the Secretary of State faces specific statutory penalties and legal disabilities. These measures are meant to incentivize prompt compliance and can have lasting operational consequences.

Statutory penalty for late or unregistered qualification: Under both the Illinois Business Corporation Act (805 ILCS 5/13.70) and the Illinois LLC Act (805 ILCS 180/45-50), a foreign entity that transacts business in Illinois without first obtaining authority must pay all fees (and franchise taxes, if applicable) that would have been due, plus an additional penalty equal to the total fees/taxes owed during the period of unauthorized activity. In other words, the penalty doubles the statutory amounts the entity should have paid.

Legal disability — inability to maintain lawsuits: If a foreign entity conducts business in Illinois without qualifying, it cannot maintain a lawsuit or other proceeding in any Illinois court until it becomes properly registered and pays all back fees, taxes, and penalties. However, this does not invalidate the entity's contracts or prevent it from defending itself in court; such contracts remain enforceable by others, but the unregistered foreign entity must cure its lack of authority to seek affirmative relief (805 ILCS 5/13.70(b); 805 ILCS 180/45-50(b)).

Curing violation after the fact: To remedy unauthorized activity, the foreign corporation or LLC must:

• File the proper Application for Authority (or Admission) with the Secretary of State, including all required supporting documents.
• Pay all back fees, franchise taxes (if applicable), and the statutory penalty (equal to those back amounts).
• Only after correcting these errors may the entity maintain a lawsuit or proceeding.

No criminal penalties, but risk of revocation: The statutes do not provide for criminal liability solely for failing to qualify, but continued violation can lead to denial or revocation of authority to transact business. The Secretary of State has discretionary powers to enforce compliance and pursue penalties at the time the entity attempts to correct its status.

Applicability and carve-outs: These rules apply to both LLCs and corporations. Certain types of entities and certain activities may be exempt from qualification altogether—see the “activities not constituting transacting business” carve-out (805 ILCS 5/13.75)—but if the Secretary of State determines unauthorized business has taken place, the penalties above generally apply.

A practical tip: entities should monitor their activity closely and seek qualification at the first sign of Illinois nexus, as the statutory penalty is mandatory and not subject to waiver on first offense.

Source: 805 ILCS 5/13.70 (penalties and disabilities for foreign corporations) Source: 805 ILCS 180/45-50 (foreign LLC unregistered activity)