• Generally, this is a corporation whose shares are held by a single shareholder or closely knit group of shareholders. Typically, there are no public investors, and its shareholders are active in the management and/or operation of the business.
• Either the corporation's Articles of Incorporation or an agreement entered into by all of its shareholders shall provide that all of the issued shares of each class are subject to one or more of the statutorily permissible restrictions on transfer 
• The Articles of Incorporation must contain a heading stating that it is being organized as a close corporation 
• The shareholders of a close corporation are generally personally liable for the debts and liabilities of the close corporation only to the extent of their capital contribution 
• A corporation may be formed initially as a close corporation or it may adopt close corporation status by amending its articles of incorporation to include a statement that it is a close corporation
• A statutory close corporation may operate without a board of directors if its articles of incorporation contain a statement to that effect 
• A close corporation's profits are taxed twice: once at the corporate level and again when profits are distributed as dividends to their shareholders. If a close corporation meets specific IRS requirements, it can file for Subchapter S Corporation status.

• Incorporators must file the Articles of Incorporation, along with the required processing fees, with the Illinois Secretary of State. Once the filing is officially approved, the business begins its existence, as a separate legal entity.
• First, choose the name of your corporation. The name must be clearly different from the name of another business. So, at no extra charge, Proactive Management will perform three name searches to determine if your desired name(s) are available. 
• This name must also include one of the following phrases "corporation," "company," "incorporated," or "limited" or end with an abbreviation of one of the preceding words 
• The Articles of Incorporation will address:
  • Name and address of each incorporator which shall be a corporation or a natural person of the age of 18 years or more 
  • Street address of the registered office and the name of the registered agent at such office. The registered office can be the same as the corporation's place of business and the registered agent can be an state resident whose business office is identical with the registered office or a corporation, authorized in its Articles to act as an agent, whose business office is identical with the registered office. 
  • The shareholders of the corporation may elect a board of directors. The board is responsible for managing the affairs of the corporation. The company must also have at least one officer, a secretary, however, if the bylaws provide, any two offices can be held by the same person. 
  • The total number, class, par value (if any) of authorized shares, number of shares issued, and consideration received 
  • A statement of the preferences, qualifications, limitations, restrictions, and the special or relative rights including convertible rights, if any, in respect of the shares of each class 
  • The duration of the company which will be perpetual or unless a limited duration is stated 
  • The purpose of the company, which can be any or all lawful businesses in which corporations can engage 
  • State incorporation fees vary based on the total par value of all authorized shares 

Disclaimer - Not Providing Legal Services - Proactive Management, Inc. presents the material on this site as general information only. It is not offered as and does not constitute legal advice or legal opinion and should not serve as a substitute for advice from an attorney or accountant familiar with the facts of your specific situation. We provide business formation services. We are not a law firm and do not provide legal or tax advice or services. We make no warranty, express or implied concerning the accuracy or reliability of the content at this site or at other sites to which we link.