Illinois Business Corporation Act: Foreign Shareholders

Ordinary for-profit corporations answer to the Illinois Business Corporation Act of 1983, cited as 805 ILCS 5. The Secretary of State files the documents and collects the annual franchise tax. Income tax stays with the Department of Revenue. This page serves founders and parent companies in Canada or India that want an Illinois corporation, or already own one.

Slide show: Seven slides on the Illinois Business Corporation Act

What it is
The 1983 Business Corporation Act, at 805 ILCS 5.
Who it affects
For-profit corporations formed for lawful purposes, apart from banking and insurance (narrow exceptions exist).
The key rule
File articles of incorporation with the Secretary of State. The name must include corporation, company, incorporated or limited, or an abbreviation.
The number
Articles cost $150 and the annual report costs $75 (2026).
The deadline
Send the annual report during the 60 days before your anniversary month.
Late filing
A late report adds 10% of any franchise tax due. An uncured default leads to dissolution after a 90-day notice period.
The tip
File even when no tax is due. Up to $10 million of Illinois paid-in capital owes no annual franchise tax, only the $75 fee.

Who does the Illinois Business Corporation Act cover?

Question	Answer
Who may incorporate?	One or more incorporators, each a person aged 18 or older or a corporation.
What purpose is allowed?	Any lawful purpose except banking and insurance (narrow exceptions apply).
Who sits on the board?	One or more directors. They need not be Illinois residents or shareholders unless the articles or bylaws say so.
Who may hold shares?	Any holder. The sections we read set no residency or citizenship test.
Medical and professional corporations	Formed under this Act, with their own acts on top.

What it means for a foreign-owned or cross-border business

Situation	What the law says	What to check
Parent company abroad owns the shares	A corporation can be an incorporator, and the sections we read set no residency test for holders.	An ownership chart for IRS filings; see our subsidiary guide.
Director lives abroad	One director is enough, and directors need not be Illinois residents.	The agent is still an Illinois-resident individual at the office, or an authorized entity with an office there.
Foreign owner wants S status	The 100-shareholder cap is a federal S rule, not an Illinois one. The federal S election bars nonresident aliens.	An LLC or C corporation; see LLC vs corporation.
Profit sent to a parent abroad	The Act bars distributions that would leave the corporation insolvent or with net assets below zero or below preferred holders' claims. Directors who approve one can be liable.	Solvency first, then U.S. withholding rules.
Company formed abroad does business here	It applies for authority, $150 (2026), instead of filing articles.	See foreign qualification.

The rules and checklist page adds the Oxbow Ledger-and-Seat Round. See also the LLC Act, the Illinois Income Tax Act, the Corporate Transparency Act and our EIN and bank account guide.

Official sources

This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.

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Illinois Business Corporation Act for Foreign Owners

What it is

Who it affects

The key rule

The number

The deadline

Late filing

The tip

Who does the Illinois Business Corporation Act cover?

What it means for a foreign-owned or cross-border business

Official sources

Related guides

Illinois Business Corporation Act Rules, Fees, Checklist

Illinois LLC vs Corporation: Formation Steps, Fees and Tax Differences

Foreign Qualification in Illinois: How to Register an Out-of-State or Foreign LLC or Corporation

Illinois LLC Annual Report and Registered Agent Rules: Fees, Deadlines and Penalties

Forms 5472 and 1120 for a US Subsidiary of a Foreign Parent

US Bank Account and EIN for Foreign Founders: Step-by-Step Guide for 2026