Illinois LLC or Corporation

Entrepreneurs find Illinois a favorable state to form, operate, and grow their business. The state offers several advantages as well as resources to a new company. You can choose from a wide variety of entity structures although the most popular are a C Corporation and limited liability company (LLC). It is quite important to choose the right entity structure as it will determine the future of the company as the cost to form Illinois Corporation may be lower or higher than other types of entities. Similarly, there are other aspects to also consider like tax consequences, legal advantages, asset protection, documentation, and annual maintenance. There will be a cost associated with each of these and this may eventually impact the operational and financial side of your company.

Which business entity should I choose for Illinois business?

One of the most important decisions that entrepreneurs need to make before starting a company is choosing the type of entity structure. It needs to be a well thought out decision as the type of business entity chosen will have major implications in the short and long-term survival and success of that entity. As an example, if you choose to form an LLC then you will need to consider the cost to form an Illinois LLC. When you choose an entity structure, there will be a financial implication, which will vary according to the entity chosen. There will also be an annual maintenance cost of Illinois Corporation or LLC. Hence, it is integral to identify the finer aspects of entity structures. You need to look for the following –

• Tax Treatment – One of the factors that drives decision making when choosing an entity structure is the tax treatment desired by you. Ideally, a business can choose to be a flow-through entity where the tax passes onto the owners or members. Such entity structures include LLC, S Corporation, Sole Proprietorship, and Partnership. Alternatively, there is also non flow-through business like a C Corporation. Hence, it becomes important to choose an efficient entity structure for tax planning purposes. This will also impact the overall cost of forming an Illinois Corporation or LLC.
• Liability Protection – Personal liability protection is the need of the hour for most entrepreneurs and first-time business owners. Certain entity structures protect owners’ assets against legal claims or business liabilities. Other structures, like sole proprietorships, do not offer any protection at all.
• Startup costs – Startup and recurring costs – Every new business has startup and recurring costs. This is an integral component of the Illinois LLC cost per year or that of corporations. The startup costs include company registration, business name reservation, licensing and permits, annual reports, and sales tax registration.

Pros and Cons of Forming an LLC or Corporation in Illinois

Whatever entity structure you choose will impact your company’s cost and operational aspects. The cost of forming an Illinois LLC or corporation is one such area that you need to focus on. Simultaneously, considering the long-term advantages of your chosen entity structure is also recommended. So, let us quickly look at the pros and cons of conducting an LLC vs Corporation in Illinois comparative analysis.

Pros of an LLC or Corporation

• You can start a Limited Liability Company with a single member
• An LLC or a C corporation can choose to be taxed as an S Corporation
• A traditional corporation has the power to raise funds by issuing stock
• Corporations can find various funding options like through Venture capitalist (VC) firms as compared to other entity structures
• An LLC enjoys a lot of flexibility when it comes to management
• The initial documentation for an LLC is comparatively lesser than certain other structures
• If you look at an LLC vs Corporation in Illinois, an LLC enjoys pass-through taxation on profits
• Limited liability protection for your assets is offered by both LLC’s and corporations
• A Corporation enjoys perpetual life

Cons of an LLC or Corporation

• The overall cost to form an Illinois Corporation may be higher than the cost to form any other entity
• It is difficult for an LLC to raise funds as compared to a corporation
• A limited liability company doesn’t enjoy perpetual existence
• A corporation, unlike other entities, undergoes double taxation on profits earned by the company
• A comparative analysis of LLC vs Corporation in Illinois reveals higher annual report fee for corporations
• Unlike other entities, corporations need to hold an annual shareholder meeting each year
• Corporations may have higher operational costs

Illinois LLC Cost

A Limited Liability Company is among first-time business owners’ most favored entity structures. This is due to the numerous advantages it offers. If you want to register your startup as an LLC, understanding the cost of forming an Illinois LLC is integral to smooth operations. There are various types of costs involved. The costs taken into account are from the registration and operation stages, including Illinois LLC’s annual fee. Let us take a look at the various expenses that you may incur.

Cost for forming an Illinois LLC

The cost of forming an Illinois LLC considers one-time fees and recurring costs. These are:

• The LLC registration process and fees differ from those of other entity structures. The first step towards registration is to file the Application to Reserve a Name (Form LLC-1.15) in compliance with 805 ILCS 180/1-10 (2023). The fee is $300.
• According to state laws, you must hire and maintain a registered agent to service the process. The Illinois LLC cost per year for this may vary depending on the RA service you choose.
• Submitting the company registration document is the third and most important cost of forming an Illinois LLC. You will have to file an Article of Organization along with a $150 filing fee. An additional fee is charged if you want to expedite the process.

Annual maintenance cost for Illinois LLC

Once you register your limited-liability company in Illinois, it is important to ensure that your company complies with all state requirements. This is known as fulfilling state annual maintenance requirements. There is an Illinois LLC cost per year that includes different fees. The costs involved are:

• Annual Report – An Illinois limited liability company must file an Annual Report. This report must be filed each year by the end of the month prior to the LLC registration month. The fee is $75 plus a transaction fee of $1.69.
• Taxes – One of the components considered in the cost of forming an Illinois LLC is taxes. This is the annual variable cost. Since an LLC is deemed a “Pass-through Entity,” the company doesn’t need to file any taxes. Instead, the members must file taxes on their share of profits. You may also be required to file other state and local taxes. The expenses related to Illinois taxes will vary according to the tax rates applicable to your company.
• Business Licenses – Every new and existing business needs to apply for licenses and permits in this state. This is an integral part of the Illinois LLC cost per year, as licenses and permits have to be renewed each year. The fee for licenses will vary according to the type of license and the number of licenses or permits required by an LLC.

Form your new LLC in Illinois Today!

Illinois Corporation Cost

One entity structure considered the best option if you are looking to generate capital is a C corporation. This form of company is the traditional corporation with a rooted history dating back to the early 1600s when joint-stock companies existed. If you want to incorporate in Illinois, you will need to consider several aspects. The most important aspect is the cost to form an Illinois Corporation. Let us delve deeper into the costs of forming and operating this type of structure.

Cost of Forming Corporation in Illinois

The cost of forming an Illinois Corporation will be dependent on several factors. One of the important cost determinants is whether you want to form a domestic entity or incorporate a foreign company. There are several other cost categories related to incorporation in this state, and they are:

• One of the first cost elements is that of corporate name reservation. You must choose a company name following business name guidelines governed by Illinois Compiled Statutes – 805 ILCS 105/104.05. Once you have chosen a name, conduct a name availability search. If the chosen name is available, reserve it using the Application for Reservation of Name (Form BCA-4.10). A filing fee of $25 is a part of the cost to form an Illinois Corporation.
• The next important forming cost for Illinois Corporation is hiring a registered agent. According to Illinois Compiled Statutes—805 ILCS 105/Art. 5 heading, you will need to hire and maintain a registered agent for the service of process. The cost or fee would vary according to the RA service you chose.
• Finally, after the above processes are over, you must incorporate them in Illinois. You must file the Articles of Incorporation according to Illinois Compiled Statutes – Chapter 805 – 805 ILCS 5/Art.-2 heading. A filing fee of $150 is a part of the cost to form an Illinois Corporation. You may also be required to file franchise tax (a minimum of $25).

Annual maintenance cost for Illinois Corporation

The second category of costs applicable is known as the annual maintenance cost of Illinois Corporation. These are yearly costs associated with fulfillment of state requirements. They can be one-time or recurring in nature. The cost components are –

• Annual Report – A corporation formed in the state of Illinois will be required to file an annual report pursuant to 805 ILCS 5/Art. 14 heading. There is a fee of $75 for both domestic and foreign entities along with a transaction fee of $1.69. Apart from this, there would also be a variable franchise tax cost. These are taken into account as a component of the total cost to form an Illinois Corporation.
• Taxes – Once you incorporate in Illinois, you will need to be compliant with state annual requirements. This helps create a good standing. Hence, the annual maintenance cost of an Illinois Corporation is also associated with the filing of taxes. You will be required to file corporate income tax at a rate of 9.5 percent. Your company may be required to file other taxes like state sales tax and withholding tax.
• Business Licenses – Registering a business and making it operational are two different processes and have different requirements and costs. A corporation is considered to be operational when you have obtained the necessary licenses or permits. This is an integral component of the annual maintenance cost of an Illinois Corporation. This is a recurring cost as licenses or permits have to be renewed each year or as specified by the state.

Register a Corporation in Illinois with ease!

Need any Assistance in Forming Your Illinois LLC or Corporation

You can choose to register any type of entity structure as the options are varied in this state. Yet, most entrepreneurs prefer to either start their new business as an LLC or a corporation. This is owing to the many advantages and benefits these structures offer. The cost to form an Illinois LLC or corporation will also vary for domestic and foreign entities. We, at IncParadise can provide valuable assistance by handling requirements pertaining to new business formation or incorporation in the state.

Illinois Corporation

The news is that hundreds of entrepreneurs have moved their businesses to Illinois in the last few years according to a research paper published in Crain’s Chicago Business. New businesses are also gradually starting to capture the market space thanks to the state’s business competitiveness. There are many reasons to form a corporation in Illinois but existing entrepreneurs cite the primary reasons being availability of talent, diverse markets and robust infrastructure. Today, it is home to more than 30 Fortune 500 companies and some of the top names are Abbott Laboratories, Motorola Solutions Inc., AbbVie Inc., Deere & Company, and Exelon Corporation among others. The benefits of incorporating in Illinois often play a decisive role for those wanting to start a new company here.

What is an Illinois Corporation?

There are several types of corporations that a business owner can form although the most opted for is the traditional corporation, also known as a C Corporation. You can register a corporation in Illinois as a domestic entity or a foreign company. One of the salient highlights of this type of an entity is that it limits the liability of owners and investors. If you want to know how to form a corporation in Illinois, it is essential to identify the type of corporations that can be formed in this state. They are –

• Business or Traditional Corporation (C-Corp)
• S Corporation (S-Corp)
• Foreign Corporations
• Nonprofit Corporations
• Professional Service Corporation
• Benefit Corporations (B Corp)
• Close Corporations

What are the benefits of incorporating in Illinois?

Business owners prefer to incorporate in Illinois as this type of business structure has several advantages over other entity structures. Some of the benefits are:

• Limited Liability Protection – One of the benefits of incorporating in Illinois is limited liability protection. This ensures your assets are safe. If a corporation is sued, then the owners or shareholders of the said company will not be personally liable for any debts or damages.
• Gaining Tax Breaks – Another important benefit of forming a corporation is that this type of entity can often write off items like health insurance premiums, savings on self-employment taxes, and life insurance.
• Access to capital – If you form a corporation in Illinois, you can enjoy easy access to capital. You can raise money by issuing stock, which is sold to investors and enables capital raising. Even venture capitalists (VCs) prefer to invest in C corporations compared to other entities.

Starting an Illinois Corporation

Illinois is famous for its strong business communities and excellent quality of life. Incorporating in Illinois has several benefits, from diverse industries to the availability of the right talent and business incentive programs. All these factors can help your company to grow and expand rapidly. To register a corporation in Illinois, you must focus on key areas and processes.

1. Name Illinois Corporation

If you are planning to incorporate in Illinois, the first step would be to choose a corporate name. Although a business name is mandatory for every company, there are several benefits as well. A corporate name will be like the image or face of your company. Future customers, clients, or vendors can associate the name with your company. The corporate name will be required to fulfill several state requirements and other processes like business licensing and opening a corporate bank account.

2. Appoint an Illinois registered agent

If you plan to form a corporation in Illinois, then there are specific state business requirements that you, as the owner, must fulfill. Before registering your company or applying for incorporation, you must first hire and maintain a registered agent in the state pursuant to Illinois Compiled Statutes – 805 ILCS 105/Art. 5 heading. A registered agent can be an individual, or you can hire a company. Their primary responsibility is to accept all legal mail on your corporation’s behalf, known as Service of Process.

3. File Articles of Incorporation

The most obvious question for business owners is how to form a corporation in Illinois. The answer is that you must follow a process mandated by the Illinois Compiled Statutes. You must prepare and submit the Articles of Incorporation under Illinois Compiled Statutes – Chapter 805 – 805 ILCS 5/Art.-2 heading. It has to be submitted to the Secretary of State, Department of Business Services, along with a fee of $150. You will also be required to file franchise tax (a minimum of $25) and an optional fee of $100 if you want to expedite.

Are you thinking of starting an Illinois Corporation?

4. Prepare bylaws for the Illinois Corporation

If you incorporate it in Illinois, one of the significant requirements will be formulating corporate bylaws. This is a mandatory requirement for any new company, although they must not be submitted to the state. Yet, most state laws require a new corporation to establish these company bylaws. Bylaws are important because they ensure consistent decision-making while enabling a proper voting process. This becomes especially important and necessary if a director or officer leaves the company.

• Statement of Purpose
• Board of directors
• Titles of the officers of the corporation
• Shareholders owning stock in the company
• Committee and committee members
• Procedure and timeline for annual meetings
• Issuance of stock to shareholders
• Rights and responsibilities
• Conflicts of interest
• Amendment to the Bylaws

5. Appoint initial directors & hold an organizational meeting

The articles of incorporation can be filed by one or more incorporators and such an incorporator could be an individual with personal stake in the company while going forward. Once you file the articles to form a corporation in Illinois, you will need to appoint initial directors and hold an organizational meeting. The initial directors will be responsible for making decisions on behalf of shareholders. The appointment of initial directors is an important step as corporations are unable to function on their own or by themselves. A corporation requires real people or individuals capable of making decisions, signing contracts and performing other duties on behalf of the company.

• Appointment of corporate officers
• Acquisition of a minute book for recording meeting minutes as well as actions
• Establishing a corporate structure of the company
• Approval of Corporate Bylaws
• Approval of share certificates
• Establish principal place of business
• Approval of the corporate seal
• Appointment of a banking institution
• Special resolutions if any

6. Get an EIN

Any business that plans to operate in the United States, it is important to possess proper identification. If you want to register a corporation in Illinois then an Employer Identification Number (EIN) is the best form of identification you can obtain. This is also known as the Federal Employer Identification Number (FEIN) and is the tax identification number for corporations. This unique 9 digit number is assigned by the Internal Revenue Service (IRS). Once you have obtained the EIN, it will help you with tax reporting and compliance, opening business bank accounts, hiring employees, and withholding payroll taxes.

7. Open a bank account

There are many benefits of incorporating in Illinois, such as the ability to raise venture capital funds. As a corporation, you can derive many more benefits if you open a business bank account. It is important to understand that operating a business successfully requires managing finances carefully. A corporate bank account can ensure proper financial management of company resources. Modern-day business banking services offer many tools and resources to help you manage your finances effectively. Most importantly, it will allow you to separate personal and business finances. This will further enable you to track expenses accurately, streamline tax preparation, and protect personal assets.

8. Comply with other tax and regulatory requirements

Once you incorporate in Illinois, you must comply with state annual maintenance requirements. One of the important requirements is that of filing taxes. Your company will be required to file corporate income tax at a rate of 9.5 percent. The company will also be required to file state sales tax. Corporations in this state may have to file various taxes like Illinois Franchise Tax and withholding taxes.

Know more about starting an Illinois Corporation

If you have decided to form a corporation in Illinois but are faced with several queries, this section will help you. This section deals with queries specific to various aspects of incorporation, such as corporate name, starting costs, dissolution, S Corporation, and foreign corporation, among others.

How do I form a “C” corporation and an “S” corporation in Illinois?

There are two types of corporations that you can operate in the state of Illinois: C and S Corporations. There is a process if you are wondering how to form a corporation in Illinois, especially a C Corporation. You must submit Articles of Incorporation according to 805 ILCS 5/Art. 2 heading. You can elect S Corporation status once you have formed a C Corporation. It is important to note that an S Corporation is not a business entity but a tax status. You must submit a completed IRS Form 2553 (Election by a Small Business Corporation). This will help you to set up an S Corp with the Internal Revenue Service (IRS).

How much does it cost to start a corporation in Illinois?

If you want to register a corporation in Illinois, you must submit Articles of Incorporation for a domestic entity. The initial cost to incorporate will be a $150 filing fee and a minimum franchise tax of $25. If you want to expedite the process, there will be an additional fee. Apart from this initial incorporation cost, other costs will be associated with the reservation of corporate name, application for business licenses and permits, filing of annual report, and articles of amendment, among others.

How do I look up a corporation in Illinois?

You will need to reserve a corporate name before you can register an Illinois Corporation online. This starts with identifying a name compliant with state naming guidelines and governed by Illinois Compiled Statutes – 805 ILCS 5/Art. 4 heading. The next step would be to conduct an Illinois Corporation search, also known as a name availability search. This process will ensure that your chosen name is available for reservation.

Do I need a business license for my Illinois Corporation?

Yes. You may require single or multiple business licenses depending on the industry, the location of your company, and the primary business activity. The fee and renewal processes may vary from one jurisdiction or municipality to another.

Can I register with a foreign corporation in Illinois?

Yes. You can incorporate it in Illinois as a foreign company. This process is also known as foreign qualification. You must submit a Certificate of Authority or Application for Authority to Transact Business in Illinois (Form BCA 13.15) according to Illinois Compiled Statutes – 805 ILCS 5/Art. 13 heading. The application must be submitted to the Illinois Secretary of State – Business Services Department with a fee of $150.

How do I dissolve a corporation in Illinois?

Once you register an Illinois Corporation online, it becomes operational. If you want to dissolve this company, you will have to file the Articles of Dissolution (Form BCA 12.20) pursuant to Illinois Compiled Statutes – 805 ILCS 5/Art. 12 heading along with a fee of $5. It is important to note that the Illinois Secretary of State will verify your franchise tax status prior to accepting the articles of dissolution.

Ready to Start an Illinois Corporation?

You can form different types of domestic business structures and even register foreign entities in this state. One of the most popular entity structures in this state is a C Corporation. This is due to the wide variety of benefits of incorporating in Illinois as compared to other business structures. If you are wondering how to register your company then IncParadise can assist you with the entire process of incorporation.

LLC in Illinois

A Limited Liability Company (LLC) is ideal for business owners who want an easy and efficient way to start a new company. This entity structure is actually quite favorable due to the several advantages it offers right from tax flexibility to heightened credibility, personal liability protection, and even flexible management structure. When you file an Illinois LLC application, you can also enjoy advantages offered by the state including small business incentives and tax credit programs. One of the foremost requirements is hiring an Illinois LLC registered agent and this can also be advantageous as they will be the liaison between the state and the company.

What is Illinois LLC?

An Illinois limited liability company is considered to be a hybrid business structure or entity. This is because it constitutes features of several other structures including partnerships and corporation. The structure of an LLC has been created in a way that will be beneficial once you opt for Illinois LLC filing online. This type of private limited company exists legally as an entity separate from its owners also known as members. Once you file an LLC in Illinois, it can even opt for S Corporation tax status. You can even operate this type of entity as a single-member LLC or a multi-member LLC.

The benefits of forming an LLC in Illinois

A limited liability company is quite a preferred entity amongst first-time business owners in the USA. The Illinois LLC search for name and registration is governed by the Illinois Compiled Statutes. If you want to register an LLC in this state then it is important to identify the salient features of this type of structure. Let’s look at some of the top features:

• Management structure – One of the top features of a limited liability company is its flexible management structure. If you file an LLC in Illinois then you as the owners or members can manage the company or elect a managerial committee. This is unlike corporations that are managed by a board of directors only and not the shareholders. Hence, you will often come across the term “member-managed LLC” where you and other owners will be responsible for overseeing daily operations. If you have appointed managers, then it will be known as a “manager-managed LLC”.
• Pass-through entity – An important feature of a limited-liability company is that it is not subjected to federal income tax due to it being a pass-through entity. This refers to the fact that the company’s profits will pass through to you or the owner(s). Hence, you and other owners will be taxed at the individual tax rate applicable in this state. When you file an Illinois LLC application, you will need to file an individual income tax return hence an LLC is also known as a flow-through entity.
• Limited liability protection – This is definitely the most outstanding feature of a limited liability company. Illinois LLC filing requirements state that you will need to provide the name and other information of members in the forming documents. Yet, this type of entity has a separate legal identity. Hence, the owner or members enjoy limited liability. Thus, your personal assets or assets of any LLC member can never be used to satisfy the debts and obligations of the limited liability company.

Start an LLC in Illinois

If you want to start an Illinois LLC then it is important to focus on several areas of the business. This may vary from choosing a business name to choosing the right location. You will also need to ensure compliance with Illinois LLC filing requirements according to state laws. Let’s take a look at some of the important aspects of starting your LLC in this state.

1. Choose an Illinois LLC name

One of the most important steps towards forming an Illinois LLC is to choose a business name. The name of your company is essentially also the identity. Hence, it will be used for several purposes, including LLC formation, business license application, and opening LLC bank accounts. You will need to choose a business name while being compliant with 2023 Illinois Compiled Statutes, Chapter 805 – Business Organizations, Limited Liability Company Act. After you have chosen a name, you need to conduct an Illinois LLC search.

2. Choose an Illinois LLC registered agent

If you have decided to start an Illinois LLC then it’s important that you adhere to certain state laws. One of the mandatory state requirements is to hire and continuously maintain an Illinois LLC registered agent in the state. This is governed by 805 ILCS 180/Article 1-General Provisions. The primary role of a registered agent in the state is to provide service of process.

3. File Article of Organization

The most important step towards new business formation is registering your company with the state. You will need to submit the Articles of Organization according to the Illinois Limited Liability Company Act, 805 ILCS 180/5-5. You have to submit this with the office of the Secretary of State – Department of Business Services, Limited Liability Division, along with a filing fee of $150. You can file it by mail or in person. There is also an option available for Illinois LLC filing online. The processing time takes around 10 days and you can always expedite it by paying an additional cost.

Form an Illinois LLC Today!

4. Prepare Illinois LLC operating agreement

After you file an Illinois LLC application, one of the basic legal documents required by your company is an operating agreement. The importance of this document lies in the fact that it helps in setting forth the structure of the LLC, the management, and operating procedures, and governs the decision-making process. This is an internal document and is not required to be submitted to the state. Essentially, an operating agreement can be considered as a contract where all members of the said LLC will be bound by its terms after it has been signed.

• Statement of intent
• Members’ ownership expressed in percentages
• Distribution of profit and loss
• Duty of members and their benefits
• Powers of managers and members
• Admission of new members
• How to hold board member meetings
• Ownership transitions
• Tax considerations
• Transfer provisions

5. Obtain EIN for Illinois LLC

An Employer Identification Number (EIN) is a unique nine-digit number that is assigned to an LLC by the Internal Revenue Service (IRS). It is also known as the Federal Employer Identification Number (FEIN). If you form a single-member LLC without any employees then you may not be required to apply for an EIN. The purpose of the EIN is to allow the IRS in identifying businesses for the purpose of tax reporting. There are several benefits of having an EIN like it helps in obtaining credit and filing business taxes.

Do you want to obtain an EIN in Illinois?

6. Check local licenses and permits

Once you file an LLC in Illinois, you will need to make it operational. This is possible by applying for and obtaining the relevant business licenses and permits. Many states have general licenses but Illinois doesn’t have a state-wide general license. The licenses required by a limited liability company may fall under these categories –

• According to Business Sector – The issuing of licenses in certain business sectors is governed by regulatory bodies or government agencies. If you were to start an Illinois LLC focusing on wholesale food operations or manufactured food then the licensing authority will be the Illinois Department of Public Health (IDPH). There are different agencies that regulate different aspects of the overall food supply. You may even need a single or multiple licenses depending on the business sector.
• According to City/County – The Illinois LLC filing requirements make it necessary for businesses to apply for local licenses. The type of license and fee may vary according to the county you are operating from as well as business activity. The City of Des Plaines, IL requires you to apply for licenses and permits for establishments selling liquor like restaurants or bars. The Building and Code Division of Community & Economic Development of this city is responsible for issuing licenses. It is important to maintain compliance with the city code. You may also need zonal permits in certain areas of the city.
• Professional license – Lastly, certain businesses in Illinois may even require professional or occupational licenses. These licenses are issued by the Illinois Department of Financial and Professional Regulation (IDFPR). The form and fee will be different for each category of professional license.

7. Open Illinois LLC bank account

Once you have submitted documents for Illinois LLC filing online, the immediate requirement would be to create a separate bank account. This separate account known as a business bank account will help manage your expenses and gains from the business. Managing LLC finances properly is key to the overall sustenance of the company, especially from a long-term perspective. There are several benefits of a business banking account like making your tax reporting more simplified while enhancing overall credibility.

8. Comply with taxes and other regulations

One of the Illinois LLC filing requirements is that of fulfilling all annual requirements as specified by the state and governed by the Illinois Limited Liability Company Act. One such requirement is that of filing an annual report pursuant to 805 ILCS 180/50-1. This report has to be filed annually by the end of the month prior to the LLC registration anniversary month. So, if you start an Illinois LLC on April 17, then your annual report will be due on March 31. The annual report has to be filed with the Illinois Secretary of State – Business Services Department along with a fee of $75 plus a $1.69 transaction fee.

Learn more about starting an LLC in Illinois!

An Illinois LLC registered agent can provide assistance with a wide variety of business processes including new business and foreign entity registration. In spite of that, you may have several queries regarding domestic and foreign LLC formation and operations. Hence, we have created a special “Frequently Asked Questions” section to address some of these queries.

Is Illinois a good state to form an LLC?

If you want to start an Illinois LLC, it is one of the best business decisions. The state is home to more than 1.2 million companies. The state is preferred by entrepreneurs because of its excellent business climate. You can take advantage of several state resources and business incentive programs. Here are some reasons Illinois will be a good state for your company.

• The state has low corporate taxes and personal property is tax-free
• The state is home to more than 30 Fortune 500 companies
• Chicago, IL offers the perfect environment for start-ups in different industries like retail, tech, food, and construction among others
• Illinois offers competitive range of business incentives for expanding and moving your company here
• The state ranks #2 in the nation where corporate relocation is concerned
• Illinois LLC filing requirements are minimal and relatively easy

How do I know if my Illinois LLC name is available?

Once you have identified or chosen a business name in compliance with the state naming guidelines, you need to conduct an Illinois LLC search. This is also known as a name availability search. If your chosen name is available then you can go ahead and reserve the same.

How much does an LLC cost in Illinois?

If you are thinking of starting a limited liability company in Illinois then you will be required to submit Articles of Organization for a domestic entity. The initial cost for Illinois LLC filing online is $150. If you want to expedite the process then there will be an additional fee. Apart from the initial registration cost, there will be costs associated with name reservation, submission of annual reports, and application for business licenses and permits.

Do I need a business license for my Illinois LLC?

Yes. A business license is required for making your LLC operational. You may have to incur a penalty if you conduct business without proper licenses or permits.

Can I set up a single-member LLC in Illinois?

Yes. You can set up a single-member LLC (SMLLC). Considering the purpose of formation a single-member LLC is regarded as the same as a multi-member LLC. Hence, the process to register this type of LLC will be the same i.e., you will be required to file the articles of organization.

What taxes does an LLC pay in Illinois?

Once you file an LLC in Illinois, your company will be subjected to different forms of taxes. Primary among them is the personal income tax. This is because an LLC is known as a pass-through entity. You may be required to file other taxes applicable in the state depending on your business activity.

Can I register a foreign LLC in Illinois?

Yes. You can register and operate a foreign LLC in the state of LLC. The registration of a foreign LLC will be governed by 2023 Illinois Compiled Statutes, Chapter 805 – Business Organizations, 805 ILCS 180/ – Limited Liability Company Act, Article 45 – Foreign Limited Liability Companies. You will have to file an Application for Admission to Transact Business along with a fee of $500.

How do I dissolve my Illinois LLC?

Once you have filed your Illinois LLC application, the company will be registered with the state. If you want to dissolve your limited liability company at any given point in time then you will need to file the Statement of Termination with the Illinois Secretary of State pursuant to 805 ILCS 180/Article 35 (2023). There is a fee of $5.

Ready to form an Illinois LLC?

One of the most flexible structures, you will be able to enjoy several advantages for registering an LLC in this state. You can form a domestic entity or move your existing LLC to this state as a foreign entity. However, you have to fulfill all Illinois LLC filing requirements. If you want to file an Illinois LLC application then IncParadise can assist you with the entire process of registration of your company in the state.

Entrepreneur’s guide to forming a business in Illinois

Illinois is one of the most culturally vibrant states in the nation. The state has been witnessing a major shift in business activity with many companies moving to this state. If you are a first time business owner then one of the primary aspects to consider is the overall business climate. This state has just the right business climate and its small business support ecosystem makes it easier to register a business in Illinois. You can leverage location factors like lower operational costs, access to skilled labor, world class infrastructure, and favorable tax incentives.

Why do companies prefer to register business in Illinois?

There are several key factors that have driven entrepreneurs to start a business in Illinois including its thriving economy. The Real Gross Domestic Product (GDP) of the Prairie State was $875.57 billion in 2023. Today, the state has successfully developed a robust startup and innovation ecosystem. It is also home to world-renowned research universities. There are several advantages the state has and some of them are –

• Transportation and Logistics Infrastructure – One of the top reasons why entrepreneurs prefer to start a small business in Illinois is the world-class transportation and logistics infrastructure. The state is home to airports, seaports, and inland waterways connecting you with other states and globally.
• Tax Incentives and Credits – Once you register an Illinois business online, you can benefit from the wide variety of small business incentives and tax credit programs. The benefits can vary from deriving tax exemptions to getting tax credits and even tax-exempt Industrial Development Revenue Bonds (IRBs).

Want to start a new company in Illinois?

Steps to start a business in Illinois

It is never easy to start a business as there are several areas to focus on simultaneously. There are processes, state laws, and compliances to meet to operate a company in a streamlined manner. Hence, preparing before starting a business in Illinois is important. Let’s look at some of the core areas that will have a decisive impact on business registration and operations.

1. Prepare Illinois Business Plan

Every business has an operational objective and a financial goal. It is important to remember that no two businesses are alike. So, where do you start? The first step is to always prepare a business plan. It is often considered a strategic plan and may contain several other sub-categories, like a marketing or financial plan. It plays a critical role in organizational management and is a must-have on your Illinois business checklist. It will also help you focus on all important factors to help you achieve your short-term and long-term objectives. Your business plan should ideally contain the following –

• Executive summary
• Ownership, & management
• Industry & market analysis
• Products and services
• Competitive analysis
• Branding and marketing
• Logistics and operations
• Financial statements and projection

2. Attend Entrepreneurial Training or Development Programs in Illinois

Illinois has a diverse economy, and it is competitive, too. If you want to stay ahead of the competition or want your company to achieve the break-even point quickly, then entrepreneurial training or development programs can be quite helpful. Developing entrepreneurial competence is integral to the success of your business. These programs are focused on helping you develop the spirit of self-employment while facilitating strategic decision-making. In fact, you can choose from a wide variety of entrepreneurial and business development programs in the state. Some programs will also outline the steps required to register a business in Illinois.

3. Choose Business Structure for Illinois Business

An important point in your Illinois business checklist is choosing the right business structure. There are several implications of this like for tax purposes, an LLC is a better structure as compared to a corporation. Again, when it comes to getting venture capital, a corporation is considered the best option. Basically, each business structure has its unique characteristics and limitations. You should consider several aspects before choosing an entity structure, such as legal, tax, employment, marketing, and registration. You can start a business in Illinois by choosing any of the following structures –

• Sole Proprietorship
• Domestic and foreign LLC
• Domestic and foreign corporations
• Professional Limited Liability Company
• General partnership
• Limited partnership
• Limited liability partnership (LLP)
• Nonprofit corporations
• Professional Service Corporation
• Benefit Corporation
• Professional associations

4. Naming Your Illinois Business

One of the important requirements for registering a business in Illinois is choosing and reserving a proper business name. This process is mandatory for all forms of entities, including sole proprietorships. A business name is like the identity of any company and is used in all areas, from marketing to finances. Hence, it is important to consider several aspects when choosing a name. They are –

• It is important to follow the state naming requirements and guidelines. These are governed by 2023 Illinois Compiled Statutes, Chapter 805 – Business Organizations.
• The business name should be distinguishable from any other company in Illinois. You also need to ensure that you do not use restricted words like bank or trust. You cannot use words similar to the names of various government agencies.
• Once you have chosen a name, it is important to conduct a Business Entity Search also known as name availability search.
• The state of Illinois requires you to reserve a business name by filing the Application For Reservation of Name.
• It is important to note that the name reservation form is different for different entities.
• If you don’t want to use your legal name then you will need to register an assumed name. This name is also known as DBA (Doing Business As).

5. Choose Your Location for Illinois Business

If you have taken a decision to start a small business in Illinois then identifying the right location is of utmost importance. When we say location, it may refer to a city, county, or simply an industrial district. Choosing the right area is important as it will influence various aspects of your business like operations, profitability, scalability, risk, competition, and expenses among others. There are some key factors that you need to consider when choosing a location and they are:

• Accessibility – Accessibility should be right at the top of your mind. It refers to how easily your client can approach you. It also includes ease of parking or parking space nearby and proximity to your vendors or other businesses. If you start a business in Illinois in the manufacturing industry then choosing an opportunity zone, industrial zone or foreign trade zone can be beneficial.
• Growth Potential – One of the overlooked areas is growth potential. Yes, this is connected to other aspects of choosing a location like accessibility, nearby markets, transportation infrastructure, competition, commercial space, and industrial hubs. So, you need to ask yourself if your chosen location has growth capabilities or not.
• Operating and other related costs – When you register Illinois business online, one of the areas that will impact your business the most is the operational costs. There are several components of operational costs and each affects the company in a different way. These are basically ongoing expenses that will be incurred by you during every day running of the business. Some of the common operating cost components include rent, equipment, marketing, inventory costs, payroll, and property taxes among others. Hence, it’s important to choose an area that helps lower your operating costs.
• Local zoning ordinances – Zoning rules can actually have a detrimental effect on the operations and growth of a business. You need to check in advance the local ordinances in the zone you have selected for your business. You need to check whether your business can operate from the chosen zone, if the said property can be expanded in the future, and the type of signage that is acceptable.

6. Register Your Illinois Business

The most important process is that of registering your company. The process will vary according to the type of entity structure you choose. The processes will also be different for domestic and foreign entities. Accordingly, you must file necessary or relevant documentation with the state. The documentation and the filing fee must be submitted to the office of the Illinois Secretary of State, Department of Business Services. Let’s look at an example to understand this.

Are you thinking of forming a new business in Illinois?

7. Get Your EIN

Once you register a business in Illinois, you will be required to file taxes at the federal and state levels. An Employer Identification Number (EIN) can be very useful. This is also known as a Federal Tax ID number and is required by most entity structures. An EIN allows the Internal Revenue Service (IRS) to identify different businesses for tax reporting. An EIN can also increase your company’s credibility and open a business banking account.

8. Open a Business Bank Account

Finance is at the heart of any successful company. Whether purchasing equipment, paying wages, taking commercial space on rent, or receiving profits from the business, handling these finances can be quite the headache. The one thing that can make your financial audits and bookkeeping easier is a business bank account.

9. Obtain Business Licenses and Permits

New businesses have several requirements they need to fulfill, and each state has different business requirements. If you start a business in Illinois, you must ensure conformity to standards and operational requirements as specified by Illinois Compiled Statutes. One of the most essential requirements is a business license and permits. Licenses are mandatory for transacting business in this state. Although there is no requirement for a statewide general business license, other licenses and permits are necessary. The licenses, according to the Illinois Secretary of State, are categorized as follows –

• Business Sector or Activity – If you incorporate in Illinois and operate in a specific industry or undertake certain activities then you will need to apply for a small business license through state agencies.

  Example: If you register a business in Illinois specializing in liquor manufacturing, you need to apply for a license with the Liquor Control Commission. The license application and fee will vary according to the type of business the fee for a Retailer license is $10 per location, while that of a manufacturer is $250. Similarly, if your business is importing livestock into Illinois, then the relevant license or permit will be issued by the Department of Agriculture.

• Professional or Occupational Licenses – This license type will be required if a specific profession or occupation drives your business. The office of the Illinois Secretary of State lists more than 100 different professions. You will need a business license or permit, and it will be issued by the Illinois Department of Financial and Professional Regulation (IDFPR). Some professions include architect, clinical & prescribing psychologist, marriage & family therapist, cosmetologist, and pharmacist. The form and fee will be different for each type of license.
• County or City Licenses – The third business license category is local license or permit. When starting a business in Illinois, the office will be in a specific city or county. You need to check with the local authorities for any applicable licenses. The licensing regulations, forms, and fees will vary from one city or county to another. You may even need zonal permits in certain jurisdictions.

  Example: If you start a small business in Illinois in the City of Chicago, you will need to check for relevant licenses. Licensing information is available at the city clerk’s office. The office is also responsible for the issuance of business licenses. Similarly, if your office is in the Town of Normal, you will need to apply for a Town license and a Town of Normal Business License. The Deputy Clerk’s office will issue the license.

10. Register for Taxes

Once you register a business in Illinois, you will need to meet all annual requirements of this state. One such requirement is filing taxes. There are different types of business taxes that may be applicable. Hence, it is recommended that you register with the Illinois Department of Revenue (IDOR). All forms of entities including sole proprietorships need to register here if they withhold Illinois income tax for their employees. You can register online on the MyTax Illinois portal. Alternatively, you can fill and submit the REG-1 form for Illinois Business Registration Application.

11. Obtain Business Insurance

Your Illinois business checklist is incomplete if it doesn’t contain business insurance. Although, many first time business owners feel that it is not necessary but why take an unwarranted risk. An insurance policy for your company will help you to cover any costs that are associated with property damage and liability claims. You can always start by applying for a small business insurance policy as it will help you in protecting your company and assets. If you don’t have basic insurance coverage then your company finances may be at risk.

• General liability insurance
• Business Owner’s Policy (BOP)
• Product liability insurance
• Commercial umbrella insurance
• Professional liability insurance
• Commercial property insurance
• Workers’ compensation insurance

12. Annual and Ongoing Requirements

Different states in the USA have different annual requirements and fulfilling them will ensure good standing in the state. Once you incorporate in Illinois, you will need to file an annual report. This report will be different for different entity structures and has to be filed by both domestic and foreign companies. The filing fee will also be different based on the type of company. The annual report fee for a domestic LLC is $76.69, while a foreign corporation’s will be $75 plus franchise tax. This report has to be filed with the Illinois Secretary of State – Business Services Department each year. You must also renew business licenses each year and file state business taxes.

Some Important Quick Resources for an Illinois Business

Starting a business translates into putting in motion an idea and an entire organization with employees. Access to resources and information is the most important aspect of starting and running a company. The resources and relevant support will help you register a business in Illinois and assist with business licenses, taxes, annual reports, and small business development programs, among others. Let us look at some of the important resources.

Illinois Secretary of State

The office of the Illinois Secretary of State provides important information and resources of new business formation. You can find a guide to starting a business in this state. You can download registration forms and search business records.

• Illinois Secretary of State
  Illinois Secretary of State
  213 State Capitol Springfield,
  IL 62756
  Phone – 217-785-3000
  Website – https://www.ilsos.gov/

Illinois Department of Revenue

Once you start a small business in Illinois, you may be required to file some form of tax. The Illinois Department of Revenue (IDOR) provides various tax resources and support to individuals and businesses. This includes information on filing a return, types of taxes applicable for businesses, registering for taxes using MyTax Illinois, payment plans in case of tax delinquency, tax-exempt organizations, and audit information, among others.

• Illinois Department of Revenue
  Suite 1100
  555 West Monroe Street
  Chicago, Illinois 60661
  Phone – 800-732-8866
  Email – [email protected]
  Website – https://tax.illinois.gov/

Illinois Department of Labor

After you start a business in Illinois, you may need to hire employees or a skilled workforce. There are certain rules and regulations that you need to follow even when hiring employees. You will get information on Child Labor Law, the Illinois On-Site Safety and Health Consultation Program, the Equal Pay Act, and the Prevailing Wage Act and Rates, among others. You can also find information and resources on various licenses and permits issued by the Illinois Department of Labor, such as the Private Employment Agency License.

• Illinois Department of Labor
  524 S. 2nd Street, Suite 400
  Springfield, IL 62701
  Phone – (217) 782-6206
  Website – https://labor.illinois.gov/

Illinois Department of Commerce and Economic Opportunity

The Illinois Department of Commerce and Economic Opportunity (DCEO) is also known as the code department. It is responsible for sponsoring statewide economic development while emphasizing increasing minority entrepreneurship. It also provides valuable resources related to promoting the tourism industry and business investment.

• Illinois Department of Commerce and Economic Opportunity
  555 W. Monroe St, 12th floor
  Chicago, IL 60661
  Phone – 312 814 7179
  Website – https://dceo.illinois.gov/

Illinois State Chamber of Commerce

The Illinois Chamber of Commerce is a business advocacy group that represents the interests of various types of businesses across the state. Once you register an Illinois business online, you can find a wide variety of resources. Their Business Services Division provides various programs for new and existing businesses. This includes seminars and webinars, custom on-site training, a Women in Business conference, and a Workers’ Compensation and Safety conference.

• Illinois State Chamber of Commerce
  215 E. Adams St.,
  Springfield, IL 62701
  Phone – 217 522 5512
  Website – https://www.ilchamber.org/

Illinois Small Business Development Center

The primary objective of the Illinois Small Business Development Center (SBDC) is to provide valuable assistance at any stage of your business or entrepreneurial journey. You can benefit from business guidance and training to develop business plans. They also provide assistance with financial analysis and planning and access to various business financing programs. They have several centers spread across the state.

• Illinois Small Business Development Center
  Illinois Small Business Development Center
  Small Business Growth Corporation,
  2401 W White Oaks Dr,
  Springfield, IL 62704
  Phone – 217-522-2772
  Website – https://www.illinoissbdc.com/

Ready to Start a Business in Illinois?

There are plenty of reasons to start a business in Illinois or move your existing business to this state. The state boasts of a robust transportation and logistics network and provides industrial diversity. Small businesses can derive healthy community support. A reputable Illinois registered agent like IncParadise can provide valuable assistance in business formation or incorporation in this pro-business state.

What is an Arizona registered agent?

An Arizona statutory agent is also known as an agent for service of process, and is also known as a resident agent. A registered agent or RA needs to be hired by business entities in compliance with the state laws. Such an agent can be an individual or a company and their main objective is to receive service of process (SOP) on behalf of the businesses who have hired them. All states have business laws that govern hiring and maintaining an agent in that state. Similarly, the Arizona registered agent requirements are governed by the Arizona Revised Statutes for different entity structures.

What are the roles and responsibilities of a registered agent in Arizona?

The roles and responsibilities of a registered agent are more or less specified within certain sections of the business laws. These also form an integral part of registered agent services in Arizona. The services or responsibilities will remain almost the same for domestic and foreign new businesses as well as existing entities. The core duties of an RA includes the following:

• Service of Process – The most important responsibility of any registered agent in Arizona is to provide service of process. In order to provide this, an agency or agent has to play the role of being the point of contact or liaison between the state and the business or client. When we speak about service of process, it is important to understand what it really stands for. Service refers to delivery of the legal paperwork to a company or the defendant. Process refers to the summons or legal documents being served to a company for starting a lawsuit. When you appoint a statutory agent in this state then their role and responsibility will be to receive legal notices on behalf of your company.
• Business Documentation – If you are planning to register a new company in Arizona then there are two types of documentation processes that will come into play. The first part is where the chosen agent assists you with filing of business registration and other related documents with the state. The second part is where the state sends you important documents pertaining to your company like articles of organization etc. So, assisting you with submission of documents and receiving state sent mails and documents are an integral part of registered agent services in Arizona.

Who can be a registered agent for your Arizona business?

The laws pertaining to RA services and requirements are more or less the same across all states in the USA. The Arizona registered agent requirements are governed by the Arizona Revised Statutes. There general qualification criteria for a statutory agent and a firm as well as an individual can be your RA in this state.

What are the requirements of an Arizona registered agent?

The state of Arizona has defined requirements for a registered agent in the Arizona Revised Statutes. The statutory agent needs to be either a registered business or an individual who is also the resident of this state. You can conduct an Arizona registered agent search based on the requirements as specified by the state. This will ensure your company is able to find the best possible service. The key requirements pursuant to the Arizona Revised Statutes are:

• A registered agent should have a physical street address in this state. This is also known as the Arizona registered agent office. P.O. boxes for RA services are unacceptable.
• A statutory should be at least 18 years old if they are an individual
• One of the important Arizona registered agent requirements is their availability. They should be available during regular business hours in order to accept legal documents or business notifications.
• If your agent is a firm then they should have proper authorization to conduct business in Arizona.

Are you looking for top Registered Agent Services in Arizona?

Can I be my own registered agent in Arizona?

Yes, you can be your own registered agent in Arizona. It is important to ensure you are compliant with the Arizona Statutes, regulations, and requirements as required in this state. As an individual, the following criteria’s need to be met:

• To be a resident agent in Arizona, you should be over 18 years of age
• You can provide registered agent services in Arizona if you have a proper physical street address and not a PO Box address
• You should be available during working hours through the week

How to choose a registered agent in Arizona?

Arizona is one of the top states when it comes to starting a new company or moving your existing business. The state has a business-friendly climate and low average property taxes. The corporate and individual income tax rates are also lower as compared to some of the other top states. However, you will need to comply with certain state requirements like it is mandatory to appoint a statutory agent in Arizona.

• Look for a resident agent service who has knowledge of business entity and compliance rules of this state
• They should have a trained staff with experience in handling and forwarding of SOP documents
• The agents should have in place state-of-the-art processes that can handle, sort, and deliver crucial business documents
• A reputable Arizona statutory agent will provide additional compliance tools so that annual state requirements are fulfilled
• The RA services should keep business hours
• A nationwide registered agent service like IncParadise not only possesses necessary knowledge and expertise but can help you with other aspects of managing a company in this state.
• Registered agent services in Arizona should be able to provide reliable software like the Entity Management Software by IncParadise

Why appoint a professional Arizona registered agent service?

The objective behind conducting an Arizona registered agent search is to find the most reputable and professional service. Most states in the USA have made hiring a registered agent a legal requirement and the same is true for Arizona. The most crucial aspect though is that your chosen registered agent should be available every business day. You cannot afford to miss out on receiving an important state document or a service of process (SOP). Missing an annual report submission notification can cost your business dearly. If you appoint a statutory agent in Arizona then there are several benefits that you will enjoy. They are:

• One of the main benefits of hiring a statutory agent vis à vis being your own agent is speed. Professional RA services are faster and reliable when it comes to providing business services.
• A reputable registered agent in Arizona has years of experience working with multiple businesses. They also possess the resources as well as staff necessary for receiving services of the state.
• A top statutory agent service like IncParadise can manage businesses across multiple states. This is especially beneficial, if you are planning to expand your business in several other states apart from Arizona.
• Privacy is one of the important registered agent services in Arizona. They will ensure your address is not on public records thus reducing junk mail. Your private information will also remain protected.

Want to hire us as your Arizona registered agent?

How to change a registered agent in Arizona?

Different businesses have different reasons for changing their registered agent. Some companies need to change the agent as they are moving to a new state while others may want to change as they are not receiving the desired services. In order to change your registered agent in Arizona, you will need to complete and submit the Statement of Change form. The forms may differ according to the business structure. A corporation has to file the Corporation Statement of Change of Known Place of Business or Statutory Agent. A Limited Liability Limited Partnership has to file the Amendment to Certificate. The fee for changing your agent will be different based on entity structure. There are certain steps that may be involved. They are –

• In order to appoint a statutory agent in Arizona, you will need to choose one first.
• Conduct your search and select an agent according to your business requirements.
• Notify your current registered agent that you will be discontinuing their services.
• Now, complete and submit the Arizona Statement of Change form for your entity.

Want to change your Arizona registered agent?

Choose IncParadise as Your Arizona registered agent!

If you are planning to register a new business in Arizona then it is mandatory to hire and maintain a registered agent in this state. You will need to conduct an Arizona registered agent search so that you can find a professional service. IncParadise, one of the reputed registered agents in this state and is compliant with all Arizona registered agent requirements according to Arizona Statutes.

Why Arizona?

If you have already established your company and are thinking of expanding to multiple markets like Arizona then it will help to know more about this state. Moving your business to Arizona can have a positive impact on the entire operations as this is a state with a vibrant industry and diverse market driven by constantly evolving technology. The state provided strong support to new and existing businesses and this can be in the form of grants, loans, financial incentives, industry-based incentives, tax credit programs, and much more.

Thriving innovation/startup culture

Arizona is considered a hotbed for start-ups. Innovation and start-ups walk hand in hand to achieve larger objectives on a national and global scale. Relocating a business to Arizona will help you to leverage several opportunities for expansion. The state is home to a robust and well-planned startup ecosystem supported by a community of accelerators and incubators. The Arizona Innovation Challenge is the largest business plan competition in the nation and attracts entrepreneurs from within and outside the state. Apart from this, you can find useful resources and also participate in various entrepreneurship programs, attend workshops and conferences, and even attend DesTechAZ, Arizona’s signature tech event.

Low cost of doing business

Business owners opt for entity domestication in Arizona due to several benefits offered by the state. One of the top benefits is the overall low cost of conducting business in this state. In fact, it is one of the lowest in the United States due to low taxes. The national average of per-capita income that goes towards taxes is 9.9 percent while the same average in Arizona is 8.4 percent. In addition to this, taxes on Arizona gas, property and personal income is quite low as compared to other states.

Top talent

Whether you form a new business or simply expand your company operations to Arizona, one of the foremost drivers of your organizational success will be dependent on employees. Hence, it’s critical to identify the skills of your prospective employees. Talent always results in success! If you are moving your business to Arizona then the good news is that the state will provide you access to an abundant workforce that is highly skilled, extremely talented, and young. Currently, the state is ranked #1 in higher education degree opportunity and ranked #2 in terms of workforce quality and availability.

Business-friendly regulations

Business laws are important especially when it comes to formation of a new business or relocation. If you have a question like “does Arizona allow domestication?” then the answer lies in the Arizona Revised Statutes and regulations. The state has worked really hard towards creating a friendly regulatory environment for all forms of businesses. The state has successfully minimized red tape and has repealed several burdensome regulations. This has helped in providing the Arizona business community with more streamlined regulations that promise smooth business operations. Tax returns, collection, and audits have also been streamlined.

Access to international markets

There are primarily two types of markets that most businesses need to cater to and they are the local (state, city) market and national markets. There is also the global market, which is important for companies relying on trade or focusing on export and import of goods. Conducting business in international markets will require you to have access to the right infrastructural and logistics support and network. Relocating a business to Arizona will definitely provide you with this access. Arizona sits on a strategic location and is a part of the larger trade corridor that encompasses a wide network of roads, rail, and air transportation.

Simplified tax system

Whether you are moving an LLC to Arizona or registering a new business, you will be required to fulfill state annual requirements. One such requirement is that of filing taxes. Different states have different tax structures and types of business tax but the salient highlight of Arizona is a simplified tax system. Arizona has successfully simplified its income tax. Income tax rate used to be 4.5 percent and now it has been reduced to a rate of 2.5 percent, which incidentally is the lowest in the country. On top of that, the state has introduced several tax exemption and tax credit programs for all sizes of businesses over different industries. This will help you in lowering your overall tax burden.

Steps to Move Corporation to Arizona

If you have taken the decision of moving your business to Arizona then there are several options available. You can close your existing business and start a new business in this state. Alternatively, you can operate your company in the home state as well as in Arizona. While moving your business, you may have several questions like does Arizona allow domestication and the applicable processes. Let us look at the various options for relocation in detail.

Register as a foreign Corporation

The first option for relocating a business to Arizona is through the process of foreign qualification. This option is best for entrepreneurs who want to operate their corporation in the home state (state of incorporation) as well as other states like Arizona. The various requirements related to foreign qualification are governed by the 2019 Arizona Revised Statutes, Title 10 – Corporations and Associations, Chapter 15 – Foreign Corporation. Moving a corporation to Arizona through foreign qualification includes the following steps:

• Designate an Arizona registered agent for handling service of process pursuant to AZ Rev Stat § 10-1510 (2019)
• Conduct name availability search and file the Application to Register Foreign Corporation Name
• File the Application for Authority to transact business or conduct affairs in Arizona pursuant to AZ Rev Stat § 10-1503 (2019)
• You will also need to submit a Certificate of Existence (Certificate of Good Standing) issued by the home state or state of incorporation

Do you want to relocate as a foreign corporation in Arizona?

Convert a Foreign Corporation to Arizona entity

The second option facilitates entity domestication in Arizona. This is also known as the process of entity conversion. You can use this option if you want to change the status of a foreign entity into that of a domestic corporation or any other form of entity. You will be required to file a Statement of Domestication. The governing laws for converting a foreign corporation into an Arizona entity are A.R.S. §§ 29-2101 through to 2703 and A.R.S. §§ 29-2501 through to 29-2507.

Dissolve home Corporation and establish a new Corporation in Arizona

Relocating a business to Arizona can be done through another process through which you will need to dissolve your existing corporation. When you dissolve your home entity, you will be able to apply for domestic incorporation. This process of moving a corporation to Arizona will require you to follow the laws and process of dissolution of the home state. There are some general dissolution procedures applicable in all states and they are:

• Approval of dissolution of a corporation by incorporators, directors, or shareholders
• Filing Articles of dissolution in the home state
• File any federal, state, and local taxes and claims outstanding
• If applicable, publication of notice of dissolution
• Wind up business affairs in the home state like canceling of business licenses and permits

• Appoint an Arizona registered agent for service of process
• Identify and reserve a business name using the Application to Reserve Corporation Name
• File Articles of Incorporation along with a Certificate of Disclosure and appropriate fee
• Prepare bylaws for Arizona Corporation
• Apply for relevant state and local business licenses and permits

Incorporate in Arizona with ease!

Steps to Move an LLC to Arizona

Moving your business to Arizona may seem like a challenging task but the state offers multiple ways to make this happen smoothly. Arizona is a pro-business state and has regulations that help in minimizing the time taken for relocation and the processes are also entrepreneur friendly. You may also have certain questions regarding relocation like does Arizona allow domestication? So, let’s take a look at the different options including entity domestication for an LLC.

Register as a foreign LLC

Relocating a business to Arizona, especially a limited-liability company will open your doors to several opportunities that the state has to offer. You will be able to not only expand your business in a technology driven startup ecosystem but also apply for small business incentives and grants. There are different steps involved in moving an LLC to Arizona and the most important is through foreign qualification. As a foreign entity, you will have the advantage of operating your company in the home jurisdiction (state of registration) as well as new jurisdiction (Arizona).

• Hire and maintain an Arizona registered agent for handling service of process pursuant to AZ Rev Stat § 29-811 (2019)
• You can keep the existing name of your foreign LLC only if it is available. If the said name is unavailable then you can choose a DBA by filing the Trade Name Registration Application pursuant to AZ Rev Stat § 29-804 (2019).
• File the Foreign Registration Statement to transfer an LLC to Arizona through foreign qualification pursuant to pursuant to AZ Rev Stat § 29-803 (2019)
• Submit a Certificate of Existence also known as Certificate of Good Standing issued by the home state

Do you want to move your LLC through Arizona foreign qualification?

Convert a Foreign LLC to Arizona entity

Entity domestication in Arizona is also known as the process of conversion. If you want to change the entity type or the home state of your company then this process will be applicable. You will be required to file a Statement of Domestication pursuant A.R.S. §§ 29-2101 through to 2703 and A.R.S. §§ 29-2501 through to 29-2507. This process will change the home state of your company to Arizona. You can convert a foreign LLC to a domestic LLC or even a domestic corporation. Depending on the type of entity structure you opt, the forms and fee will vary. For example – If you plan on relocating a business to Arizona as an LLC then apart from a Statement of Domestication, you will also need to file an Article of Organization.

Dissolve home LLC and form a new LLC in Arizona

There is a third option for moving your business to Arizona. This involves dissolving the limited liability company in your home state and then registering a domestic LLC in Arizona. The rules for dissolution will be governed by the home state or the state where you have registered your company. There are certain aspects and laws of dissolution that remain the same for all states. In order to transfer an LLC to Arizona through dissolution, the following steps may be involved –

• Approval of dissolution of an LLC through unanimous member consent
• Filing Articles of dissolution in the home state
• File any outstanding claims as well as federal, state, and local taxes
• Publish a notice of dissolution if applicable
• Cancel all business licenses and permits

• Appoint an Arizona registered agent pursuant to AZ Rev Stat § 29-604 (2019) for handling of service of process
• Conduct an LLC name availability search and reserve a business name using the Application to Reserve Limited Liability Company Name
• File Article of Organization Arizona Corporation Commission – Examination Section along with the appropriate fee
• Prepare Arizona LLC operating agreement
• Open a business bank account
• Apply for state and local business licenses and permits

Register your LLC in Arizona Today!

Move Your Business to Arizona with IncParadise

There are several processes for relocating a business to Arizona. These processes may require rigorous documentation. That is why IncParadise is here to help. We provide a variety of services to fulfill different business requirements. We can assist you to move your corporation to Arizona or your LLC. We can help facilitate paperwork for dissolution in your home state, foreign qualification, and new business registration in Arizona.