Registered Agent Specifically for the State of Illinois
What Constitutes Doing Business in Illinois
What Constitutes Doing Business In Illinois
What constitutes doing business is a very subjective topic. To explain the ins and outs of determining whether you actually need to qualify your business in Illinois, it is better to review what does not constitute doing business – these are the only categories that disqualify you from qualifying in Illinois.
This topic will address the following questions:
- Do I need to qualify to do business in Illinois?
- How can I tell if I am actually doing business in Illinois?
- I only have an employee in Illinois. Do I need to register to do business?
What Constitutes doing Business Background:
What constitutes doing business in Illinois (or any state) is truly interpretive and if you have any question at all after reading this article, I would suggest enlisting professional legal help to determine if the nature of your business is one that would trigger the state’s qualification / formation requirements. An attorney will be able to interpret these exceptions and apply them in the proper context to your business purpose. In general, what constitutes doing business, or qualifying to do business, ultimately revolves around the ability to sue and be sued. Which is why there is a statutory requirement to maintain a registered agent that resides in Illinois for the sole purpose of accepting service of process and State correspondence.
Companies located outside of Illinois that have an interest in pursuing business ventures here in the State of Illinois have all asked this same question: “Do I really need to qualify my company (whether Corporation, LLC, or Not-for-Profit) with the Secretary of State to transact business in Illinois?”
What do we mean by “qualify in Illinois”? Simply put, qualifying means that your company will be required to provide some corporate, financial, organizational, and officer information to the Secretary of State on their prescribed forms and obtain and attach copies of the certified evidence of your company’s filing history and evidence of your company’s status with your domestic state. Status may include your standing with filings of annual reports, business taxes and any other annual filings that are specified as required from your domestic state.
The application for authority to do business in Illinois (BCA 13.15 form) is one of the most frequently rejected Illinois forms due to the vagueness of the initial franchise tax requirements and miscalculations resulting therefrom, improper supporting evidence from the domestic state that is either not properly certified, not attached or not in its entirety and/or by conflicting information presented on the Illinois form that does not match the supporting documentation from the domestic state. Your form may be rejected for a deviation to the normal language typically presented in your general-purpose clause. Needless to say, it is one of the most difficult forms to get past the Illinois Secretary of State filing clerks. (Information regarding the content of the applications for authority can be found under our research page titled BCA 13.15 Application for Authority.
Since this is a subjective topic, it is more relevant to outline what does NOT contitute doing business.
Exceptions to What Constitutes Doing Business in Illinois
- Maintaining, defending or settling any proceeding;
- Holding meetings of the board of directors or shareholders or carrying on other activities concerning internal corporate affairs;
- Maintaining bank accounts;
- Maintaining offices or agencies for the transfer, exchange, and registration of the corporations’ own securities or maintaining trustees or depositaries with respect to those securities;
- Selling through independent contractors;
- Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if orders require acceptance outside the State before they become contracts;
- Owning, without more, real or personal property;
- Conducting an isolated transaction that is completed within 120 days and that is not one in the course of repeated transactions of a like nature; or
- Having a corporate officer or director who is a resident of this State.