Running an Illinois corporation: a short guide
The Business Corporation Act sets how an Illinois corporation is formed, run and kept in good standing. Here are the 2026 fees, the franchise tax and the yearly report.
Prepared by Prem Tax and Accounting Corp. Last checked against official sources on October 29, 2026.
The Illinois Business Corporation Act of 1983 (805 ILCS 5) is the state law for forming and running a business corporation. The Secretary of State handles filings and franchise tax; the Department of Revenue handles income tax. It matters to corporation owners. We sort it out with the Pewter-Ledger Yearly Round. The official text is on the Illinois General Assembly website, linked below.
- In 2026, articles cost $150 and the annual report costs $75.
- Annual franchise tax is 0.1 percent of Illinois paid-in capital, and the first $10,000 of tax is exempt from 2025.
- For the annual tax, $10 million or less of Illinois paid-in capital leaves only the $75 fee.
- The report is due even with no tax owed.
Who it covers
| Role | Covered? | Note |
|---|---|---|
| Incorporators | Yes | One or more, each 18 or older or a corporation. |
| Banking or insurance | Mostly no | Narrow exceptions only. |
| Directors | Flexible | One or more; residency and shares optional unless the articles or bylaws say so. |
The numbers
These apply statewide in Illinois.
| Item | Amount or date | Year |
|---|---|---|
| Franchise tax | 0.1 percent of Illinois paid-in capital, $25 minimum before the exemption | 2026 |
| Late report penalty | 10 percent of the franchise tax due (none if no tax) | 2026 |
| Reinstatement | $200 | 2026 |
Source: 805 ILCS 5/15.35 and Illinois Secretary of State form BCA 14.05
Whether the exemption reaches the initial tax on first issuing shares is not spelled out, so check with the Secretary of State.
Our checklist
The Pewter-Ledger Yearly Round is four checks we run each year.
- Agent: Are the registered agent and office current? Changes use a separate form.
- Capital: Did shares or paid-in capital change? Form BCA 14.30 ($5) goes in with the paper report.
- Tax: Is 0.1 percent figured, less the exemption, with the $75 paid even at zero tax?
- Money out: Before a dividend, would the company stay solvent, with net assets not below zero or below preferred holders' rights?
Mistakes people make
- Skipping the report because no tax is due.
- Assuming every report can go online. Some need paper form BCA 14.05, such as more than six officers or more than six directors, or share changes.
- Treating the 100-shareholder limit as Illinois law. It is a federal S election rule.
Call an attorney for bylaws, buy-sell agreements, issuing stock, mergers or director liability. Compare entity types in startup tax planning.
Common questions
How much franchise tax will I owe?
For the annual tax, 0.1 percent of Illinois paid-in capital less the first $10,000 of tax. At $10 million or less, only the $75 fee remains.
Was the franchise tax repealed?
No. House Bill 2846 would stop it from 1 Jan 2026 but is not law (last action 21 Mar 2025), and the statute still imposed it when we checked in October 2026.
How is a corporation taxed on income?
In 2026 a C corporation pays 21 percent federal tax, plus 7 percent Illinois income tax and 2.5 percent replacement tax. An S corporation owes 1.5 percent replacement tax and no entity-level Illinois income tax, unless it elects the pass-through entity tax. See [state taxes](/state-taxes/).
Official sources
- Illinois General Assembly: Business Corporation Act of 1983 (805 ILCS 5)
- Illinois Secretary of State: Corporation filing fees
- Illinois Secretary of State: Form BCA 14.05, annual report
- Illinois Secretary of State: Corporation annual report instructions
- Illinois General Assembly: House Bill 2846, 104th General Assembly
Keep reading
Let's talk about your taxes, your business, your plans.
Tell us what you need and we will get back to you quickly. There is no pressure: just a friendly conversation and a clear next step.
4260 Westbrook Dr, Suite 107
Aurora, IL 60504
Monday to Friday, 9:00 am to 5:00 pm, by appointment. Saturday and Sunday by appointment when needed.