Foreign Qualification in Illinois

There are many ways by which you can move your company and the foremost is through foreign qualification in Illinois. When you opt for this method, you will not be required to go through the normal registration method as applicable to domestic entities. Since this process seems complex, we have created a guide for business owners that will provide relevant information. This article will help you understand various aspects of foreign business registration including state laws, foreign qualification requirements, processes and fee, and conducting Illinois foreign entity search.

Illinois Foreign Qualification

The type of entity structure chosen by you will determine the application process for foreign qualification. If you have registered a limited-liability company then you will need to apply for Illinois LLC foreign registration. The process, fee, and laws vary from one state to another although the spectrum of activities may remain almost the same. It is important to understand that once you apply for Illinois foreign business registration, you will need to be compliant with all state laws related to the entity structure like applying for necessary business licenses and filing state business taxes. One of the advantages though is that you will have access to various Illinois business incentive and tax credit programs as well as grants and other funding options.

What is Illinois foreign qualification?

Illinois foreign corporation registration or LLC foreign qualification is a terminology that refers to registering your company in another state apart from the state you are currently operating in. This is a legal process that will enable your business to pursue growth and expansion opportunities across various state borders without the need to incorporate or form a new business entity. Foreign qualification is governed by the 2024 Illinois Compiled Statutes, Chapter 805 – Business Organizations.

The laws are applicable for different entity structures like C corporations, limited liability companies (LLCs), and limited partnerships (LPs). Since, the process and fee may be different for different entities, you will be required to conduct an Illinois foreign entity search for foreign registration application for your company. Let’s look at an example to understand this:

Example: You live in Nebraska and have registered your business in that state. Now, you want to move or expand your company operations to Illinois. Here, Nebraska will be considered as your home state. Now, when you decide to expand your business through foreign qualification in Illinois, it will provide you with the authority to transact business in this state. You will not be required to close your existing company in Nebraska and yet be able to operate in this state.

Doing business in Illinois?

One of the areas that entrepreneurs or business owners may face difficulty in is understanding what “doing business” in Illinois refers to. This could mean transacting in this state, but it is not that simple. Each state has its laws and code of conduct for businesses. These point out certain conditions or parameters qualifying for business in that state. If your company fulfills such parameters, you must only apply for a foreign qualification in Illinois. According to 2024 Illinois Compiled Statutes, Chapter 805 – Business Organizations, 805 ILCS 5/13.75 and 805 ILCS 180/45-47, activities that do not constitute doing business in Illinois are:

Engaging in an isolated transaction, which is completed within 120 days and is not repeated
Maintaining a passive bank account
Holding meetings of the board of directors
Maintaining an office solely for the purpose of internal management
Holding shareholders’ meetings concerning internal affairs
Selling through an independent contractor
Soliciting any orders that have been accepted outside of the state of Illinois
Owning personal or real property
Engaging in an activity related to transferring or maintaining securities of the company

Illinois Foreign Qualification Process

Suppose you have an existing business like an LLC or a corporation in any other state in the USA and want to expand operations in Illinois. In that case, your company will be considered a foreign entity. You will be required to apply for a foreign qualification in Illinois. The Illinois Compiled Statutes will govern the process. The law states that each entity will need to procure authority from the Secretary of State before transacting business in this state. It is important to note that the Secretary of State has the authority to revoke Illinois foreign business registration based on certain criteria as specified in 805 ILCS 5/13.50 (from Ch. 32, par. 13.50). Let us look at the process of foreign qualification for LLC’s and corporations.

Illinois Foreign Corporation Registration

If you have already incorporated in another state and want to transact in the state of Illinois, you will need to apply for foreign qualification. This involves applying for Illinois foreign corporation registration to get the necessary authority. Let us understand in detail what this process entails.

An Illinois foreign corporation is any entity that has been incorporated in any state other than Illinois and wants to conduct its business in this state without dissolving the company.

Example: You have formed a corporation in Louisiana after filing the Articles of Incorporation. Your business enjoys active status in this state. After a few years, you want to expand your business to Illinois. In such a scenario, your company will be considered as a foreign corporation in the latter state. You will have to apply for Illinois foreign business registration subsequently.

You would need to follow certain steps, including Illinois foreign entity search and registration. The various steps involved in the process are:

Corporation Name – The existing name of your corporation, as it is in your home state, must be available for use in Illinois. This name should be compliant with the laws of Illinois. The law states that the corporate name should contain words like “corporation,” “incorporated,” or abbreviations like “Inc.,” “corp.,” and “co.” You need to conduct an Illinois foreign entity search, also known as a name availability search. If your existing name is unavailable, you must file for a DBA or register for an assumed name in Illinois.
Registered Agent – Whether you are forming a domestic entity or applying for Illinois foreign corporation registration, there are certain state laws and guidelines you need to follow. You will be required to maintain a registered agent in this state continuously. Failure to maintain a registered agent in Illinois can lead to revocation of foreign qualification pursuant to 805 ILCS 5/13.50. We at IncParadise are one of the top Illinois registered agents and have helped several domestic and foreign entities incorporate into this state.
Application for Authority to Transact Business in Illinois – The most important step towards Illinois foreign corporation registration is getting the necessary authorization to transact business in this state. You will need to file the Application for Authority to Transact Business in Illinois (Form BCA 13.15) pursuant to the provisions of 805 ILCS 5/13.05. This application has to be submitted to the Secretary of State, Department of Business Services, along with a fee of $150. You can submit the Illinois foreign business registration application online or in person. You must also submit a certified copy of the Articles of Incorporation from the home state. The articles of incorporation and any or all amendments should be dated within 90 days of the date of submission of the foreign qualification application.

Do you want to register a foreign corporation in Illinois?

Illinois Foreign LLC Registration

Once you register a limited liability company in another state, how do you expand your operations to Illinois? To do so, you must apply for foreign registration with Illinois LLC. This process is also known as foreign qualification and will give you the authority to transact business in this state. The 2024 Illinois Compiled Statutes will govern foreign qualification in this state, Chapter 805 – Business Organizations, 805 ILCS 180/ – Limited Liability Company Act, Article 45 – Foreign Limited Liability Companies. Here’s an example –

Example: You have registered an LLC in Massachusetts by submitting a Certificate of Organization. You are currently operating in Massachusetts, which is your home state. Now, you want to expand your business to another state like Illinois. In such a scenario, your existing limited-liability company will be considered as a foreign LLC and you will need to apply for Illinois foreign business registration.

There are certain steps involved in the process of Illinois LLC foreign registration. Let’s look at these important steps in detail:

LLC Name – In order to apply for Illinois LLC foreign registration, you need to first register your business name. You can use the existing LLC name as registered or reserved in the home state. However, there is a condition. The name should be available for use in the database of the Illinois Secretary of State. Hence, you will need to conduct an Illinois foreign entity search. If this name availability search reveals unavailability of your existing name then you will need to file an Application for an Assumed Name or DBA name.
Registered Agent – It is of utmost importance to continuously maintain a registered agent in the state of Illinois pursuant to 805 ILCS 180/45-5. You will need to provide the name and business address of the proposed registered agent in your Illinois foreign business registration application. If you fail to hire an agent then your company will not be authorized to do business in this state. Illinois registered agent services offered by IncParadise will not only help fulfill state requirements like service of process but also assist with other annual compliances like filing of annual reports.
Application for Admission to Transact Business – If you want to transact business in Illinois even though you have a fully operational business in another state then foreign qualification is the path to take. You will need the authority to transact in this state. You can receive this authority after filing the Illinois LLC foreign registration application. This is known as the Application for Admission to Transact Business (Form LLC 45.5). It has to be submitted with the Secretary of State, Department of Business Services, Limited Liability Division along with a filing fee of $150. You will also need to submit a certificate of good standing or a certificate of existence dated within 60 days along with the Illinois foreign business registration application.

Want to form a foreign LLC in Illinois?

Need Any Assistance in Applying for Illinois Foreign Qualification?

If you have been thinking of expanding your existing operations, Illinois is the perfect destination. The state offers a robust transportation and logistics infrastructure, a highly skilled workforce, and a wide variety of small business grants and tax incentives. In order to move your existing business to Illinois, you will need to undergo the process of foreign qualification. IncParadise can assist you with the process of foreign LLC registration or incorporation.

We provide several other business-related additional services in Illinois that will help you fulfill annual compliance requirements as required by your company, such as filing annual reports or getting an EIN tax ID. We also provide foreign qualification services in all 50 states.