Prepared by U.S. Legal Forms, Inc.
Copyright 2016 - U.S. Legal Forms, Inc.
The contents of this package are as follows:
1. Statutory Reference
2. Introduction and Law Summary
3. Forms List
4. Notes on Downloading the Forms
5. Notes on Completing the Forms
6. Instructions and Steps
7. Accessories
8. Disclaimer
STATE OF ILLINOIS
PROFESSIONAL SERVICE CORPORATION
Control Number: IL -00INC2
PROFESSIONAL SERVICE CORPORATION
for State -Licensed Professionals
STATE OF ILLINOIS
Electronic Version
STATUTORY REFERENCES
805 ILLINOIS COMPILED STATUTES 5/ (Business Corporation Act of 1983)
805 ILLINOIS COMPILED STATUTES 10/ (Professional Service Corporation Act)
http://www.ilg a.gov/legislation/ilcs/ilcs2.asp?ChapterID=65
INTRODUCTORY NOTES AND LAW SUMMARY
The practice of a profession through a professional corporation is controlled statutorily by 805
ILCS 5/ (Business Corporation Act of 1983) and 805 ILCS 10/ (Professional Service
Corporation Act). If there is a conflict between the provisions of the Business Corporation Act
and the Professional Service Corporation Act, the Professional Service Corporation Act controls.
Definitions
"Ancillary personnel" are persons acting in their customary capacities, employed by those
rendering a professional service who:
Are not licensed to engage in the category of professional service for which a
professional corporation was formed; and
Work at the direction or under the supervision of those who are so licensed; and
Do not h old themselves out to the public generally as being authorized to engage in
the practice of the profession for which the corporation is licensed; and
Are not prohibited by the licensing authority, regulating the category of professional
service rendered by the corporation from being so employed and includes clerks,
secretaries, technicians and other assistants who are not usually and ordinarily considered
by custom and practice to be rendering the professional services for which the
corporation w as formed.
The "regulating authority" is the State board, department, agency or the Supreme Court of
Illinois (in the case of attorneys at law) having jurisdiction to grant a license to render the
category of professional service for which a professional corporation has been organized or the
United States Patent Office or the Internal Revenue Service of the United States Treasury
Department.
A "license" includes a license, certificate of registration or any other evidence of the satisfaction
of the requir ements of Illinois, or of the United States Patent Office or the Internal Revenue
Service of the United States Treasury Department, for the practice of a professional service.
A "professional corporation" is a corporation organized under the Pro fessional Service
Corporation Act solely for the purpose of rendering one category of professional service or
related professional services and which has as its shareholders, directors, officers, agents and
employees (other than ancillary personnel) only i ndividuals who are duly licensed by Illinois or
by the United States Patent Office or the Internal Revenue Service of the United States Treasury
Department to render that particular category of professional service or related professional
Services. T he secretary of the corporation need not be licensed and the registered agent of the
corporation need not be licensed when the registered agent is not a shareholder, director, officer
or employee (other than ancillary personnel).
A "professional service" is any personal service which requires as a condition precedent to the
rendering thereof the obtaining of a license from a State board/agency/etc or from the United
States Patent Office or the Internal Revenue Service of the United States Treasury Departme nt.
Initial Organization
One or more persons, each of whom is licensed to perform the same professional service or
related professional services in Illinois, may organize a professional corporation by filing articles
of incorporation with the Secretary of State on forms furnished by the Secretary. The articles of
incorporation must meet the requirements of the "Business Corporation Act of 1983" and state
the specific profession to be practiced by the professional corporation.
A professional corporatio n may be organized only for the purpose of rendering one specific type
of professional service and services ancillary thereto. Additionally a professional corporation
may be organized for the purpose of rendering related professional services and services
ancillary thereto.
Rendition of Professional Services
No corporation may render professional services except through its officers, employees and
agents who are duly licensed or otherwise legally authorized to render those professional
services in Illinois.
Professional Relationships and Liability
The Professional Service Corporation Act does not abolish, repeal, modify, restrict or limit the
law now in effect in Illinois applicable to the professional relationship and liabilities be tween the
person furnishing the professional services and the person receiving such professional service
and to the standards for professional conduct.
Any officer, shareholder, agent or employee of a professional service corporation organized
remains per sonally and fully liable and accountable for any negligent or wrongful acts or
misconduct committed by him or by any ancillary personnel or person under his direct
supervision and control while rendering professional services on behalf of the professional
service corporation to the person for whom such professional services were being rendered.
A professional service corporation has no greater liability f or the conduct of its agents than a
general business corporation. A professional service corporation is liable up to the full value of
its property for any negligence or wrongful acts or misconduct committed by any of its officers,
shareholders, agents or employees while they are engaged on behalf of the professional service
corporation in the rendering of professional services.
The relationship of an individual to a professional service corporation (whether the corporation
representative is acting as a sh areholder, director, officer or employee) in no way modifies or
diminishes the jurisdiction over him of the governmental authority or State agency which
licensed, certified or registered him for a particular profession.
All rights and obligations pert aining to communications made to, or information received by, any
qualified person, or his advice thereon, is extended to the professional service corporation of
which he is a shareholder or employee, and to the professional service corporation's officers,
employees and ancillary personnel.
Name
A professional service corporation must adopt a name consisting of the full or last name of one
or more of its shareholders. If it is not otherwise prohibited by law, rules of a regulating
authority or the canons of ethics of the profession concerned, a professional service corporation
may adopt a fictitious name.
It is permissible for a professional service corporation to continue to use the name of a deceased
shareholder for a period of one year after his death without recording the name of the
professional service corporation with the county clerk.
A professional service corporation may continue to use the name of a shareholder who
voluntarily withdraws from the professional service corporation if the withdra wing shareholder
files with the regulating authority his written permission for the continued use of his name by the
professional service corporation. This permission remains in effect until written revocation has
been received by the regulating authority from the former shareholder.
The corporate name of a professional service corporation must end with the word "chartered" or
"Limited" or the abbreviation "Ltd.", or with the words "Professional service corporation" or the
abbreviation "Prof. Corp." or the initials "P.C."
Directors
A professional service corporation organized is governed by a board of directors elected by the
shareholders and represented by officers elected by the board of directors, and, if desired, by an
executive committee elected b y the board of directors.
If a professional service corporation has only one shareholder, it need have only one director and
that director must be the shareholder. That shareholder may also serve as president, secretary,
and treasurer of the professiona l service corporation. A one -shareholder professional service
corporation is not required to have a vice -president.
If a professional service corporation has only 2 shareholders, it need have only 2 directors, both
of whom must be shareholders. The two shareholders must fill the offices of president, vice -
president, secretary and treasurer of the professional service corporation between them.
Restrictions on Stock Ownership
No professional service corporation may issue any of its capital stock to anyon e other than an
individual who is duly licensed or otherwise legally authorized to render the same specific
professional services or related professional services as those for which the professional service
corporation was organized.
No shareholder shall enter into a voting trust agreement or any other type of agreement vesting
another person with the authority to exercise the voting power of any of his stock.
Share Redemption - Death or Disqualification of Shareholder
The articles of a professional service corporation must provide for the purchase or redemption of
the shares of any shareholder upon death or disqualification. This provision may also be in the
by -laws of the professional service corporation or in a separ ate agreement of the interested
parties.
If the articles of a professional service corporation, the by -laws or a separate agreement fail to
state a price or method of determining a fixed price at which the professional service corporation
or its sharehold ers may purchase the shares of a deceased shareholder, or a shareholder no longer
qualified to own shares in the professional service corporation, then the price for such shares
must be the book value as of the end of the month immediately preceding the de ath or
disqualification of the shareholder. Book value is determined from the books and records of the
professional service corporation in accordance with the accounting methods used by the
professional service corporation.
Certificate of Registration
No professional service corporation may open, operate or maintain an establishment for any of
the purposes for which a professional service corporation may be without a certificate of
registration from the regulating authority authorized by law to license in dividuals to engage in
the profession or related professions concerned. Application for such registration must be made
in writing, and must contain the name and address of the professional service corporation and
such other information as may be required b y the regulating authority. Upon receipt of such
application, the regulating authority, or some administrative agency of government designated by
it, shall make an investigation of the professional service corporation. If the regulating authority
is the Su preme Court it may designate the bar or legal association which investigates and prefers
charges against lawyers to it for disciplining.
If such authority finds that the incorporators, officers, directors and shareholders are each
licensed pursuant to th e laws of Illinois to engage in the particular profession or related
professions involved (except that the secretary of the professional service corporation need not
be so licensed), and if no disciplinary action is pending before it against any of them, a nd if it
appears that the professional service corporation will be conducted in compliance with the law
and the regulations and rules of the regulating authority, such authority, shall issue, upon
payment of a registration fee of $50, a certificate of regi stration. Upon written application of the
holder, the regulating authority which originally issued the certificate of registration shall renew
the certificate if it finds that the professional service corporation has complied with its
regulations and the provisions of the Professional Service Corporation Act. No certificate of
registration is assignable.
The regulating authority which issues a certificate of registration may suspend or revoke it for
any of the following reasons:
The revocation or s uspension of the license to practice the profession of any officer,
director, shareholder or employee not promptly removed or discharged by the
professional service corporation;
Unethical professional conduct on the part of any officer, director, shareholder or
employee not promptly removed or discharged by the professional service corporation;
The death of the last remaining shareholder;
Upon finding that the holder of a certificate has failed to comply with the provisions of
the Professional Service Corporation Act or the regulations prescribed by the
regulating authority that issued it; or
The failure to file a return, or to pay the tax, penalty or interest shown in a filed return, or
to pay any final assessment of tax, penalty or interest, as required by any tax Act
administered by the Illinois Department of Revenue, until such time as the requirements
of any such tax Act are satisfied.
Before any certificate of registration is suspended or revoked, the holder must be given written
notice of the proposed action and the reasons therefor, and shall provide a public hearing by the
regulating authority, with the right to produce testimony and other evidence concerning the
charges made.
Professional Services
A pro fessional service corporation may only engage in the rendering of one category of
professional service or related professional services and may render such professional service or
related professional services only through shareholders, directors, officers , agents and employees
who are themselves duly licensed in that category of professional service. No person who is not
licensed in that category of professional service or related professional services shall have any
part in the ownership, management or c ontrol of the professional service corporation, nor may
any proxy to vote any shares of such professional service corporation be given to a person who is
not so licensed.
YOU MUST CONTACT THE ILLINOIS BOARD/DEPARTMENT/ETC
GOVERNING YOUR PROFESSION TO OBTAIN YOUR CERTIFICATE
OF REGISTRATION AND TO ASSURE COMPLIANCE WITH ALL
RULES AND REGULATIONS WHICH MIGHT BE APPLICABLE. YOUR
CERTIFICATE OF REGISTRATION MUST BE FILED WITH THE
SECRETARY OF STATE BEFORE YOU OPEN FOR BUSINESS. IT IS
ACCEPTABLE TO FILE THE CERTIFICATE SIMULTANEOUSLY
WITH THE ARTICLES OF INCORPORATION.
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Forms List
The following forms are available for downl oad with this package.
IL -NAMERESV -INC : Application for Reservation of Entity Name
IL -00INC P: Articles of Incorporation
IL -PC -TL: Sample Transmittal Letter
IL -PC -OM: Sample Organizational Minutes
IL -PC -BL : Sample Bylaws
US -IRS -SS -4: Application for Federal Tax Identification Number & Instructions
US -IRS -2553 : Election of “S” Corporation Status & Instructions
IL -PC -AM : Sample Annual Minutes
IL -PC -CR : Sample Corporate Notices of Meetings, Resolutions, Simple Stock
Ledger & Ce rtificate
Instructions on using the forms are either included with the forms and/or found in the Steps to
Incorporate section, below.
* * *
Notes on Downloading the Forms
In order that we can provide you with the most up to date forms at all times, all forms are located
on our servers for you to down load, complete and print. Downloading instructions are provided
and we will assist if you have any problems.
From the down load page, the easiest procedure to download the forms is to right click on the
form links and select “save target as” to save each form to your hard drive.
You will have six days during which you can return to the forms download page to download the
form s again if needed. You are advised to save the forms to your computer as soon as possible
to avoid any problem with the six day limit.
* * *
Notes on Completing the Forms
The forms in this package may be available in Adobe Acrobat (“.pdf”) and/or Microsoft Word
(“.doc”) format.
If available in .pdf format, the forms will contain “fillable” blanks which you can type directly
into, and print. However, you can still print th e form and fill in with a typewriter or by hand if
you desire.
If available in .doc format, the forms may contain “form fields” created using Microsoft Word.
“Form fields” facilitate completion of the forms using your computer. They do not limit you
abi lity to print the form “in blank” and complete with a typewriter or by hand. To complete the
forms click on the gray shaded areas and type the information. For the separation agreement
complete the gray shaded areas and also make any other changes or add itions to resolve all
issues.
If you do not see the gray shaded form fields, go the View menu, click on Toolbars, and then
select Forms. This will open the forms toolbar. Look for the button on the forms toolbar that
resembles a shaded letter “a”. Clic k in this button and the form fields, if present, will become
visible. If there are no form fields, just type into the document, underlining if necessary, to
complete the form.
Some forms may be “locked” which means that the content of the forms cannot be changed
unless the form is unlocked. You can only fill in the information in the fields. If you need to
make any changes in the body of the form, it is necessary for you “unlock” or “unprotect” the
form. IF YOU INTEND TO MAKE CHANGES TO THE CONTENT, D O SO BEFORE YOU
BEGIN TO FILL IN THE FIELDS. IF YOU UNLOCK THE DOCUMENT AFTER YOU
HAVE BEGUN TO COMPLETE THE FIELDS, WHEN YOU RELOCK, ALL
INFORMATION YOU ENTERED WILL BE LOST. To unlock click on “Tools” in the Menu
bar and then selecting “unprotect docum ent”. You may then be prompted to enter a password. If
so, the password is “uslf”. That is uslf in lower case letters without the quotation marks. After
you make the changes relock the document before you begin to complete the fields. After any
require d changes relock the form, then click on the first form field and enter the required
information. You will be able to navigate through the document from form field to form field
using your tab key. Tab to a form field and insert your data.
If you exper ience problems, please let us know.
* * *
Steps to Incorporate
Step 1: See FORM: IL -NAMERESV -INC
APPLICATION FOR RESERVATION OF ENTITY NAME
It is recommended that you reserve a corporate name in order to assure that your
Articles of Incorporation are not rejected because the name you have selected is
not available.
You may skip this step and go to step 2, but if the corporate name
you have s elected is not available, the Articles of Incorporation
will be rejected and returned to you.
The corporate name of a professional service corporation must end with the
word "chartered" or "Limited" or the abbreviation "Ltd.", or with the words
"Profe ssional Service Corporation" or the abbreviation "Prof. Corp." or the
initials "P.C."
The corporate name of a professional corporation must consist of the full
or last name of one or more of its shareholders.
A proposed name cannot be the same as, or deceptively similar to, the name of
any entity or any name reservation or registration filed with the Office of the
Secretary of State. Name availability may be checked prior to submitting this
form by calling (217) 782 -9521. This is, however, only a p reliminary
clearance. The final decision regarding name availability will be made when
the application is submitted for filing. Telephone name searches are only
preliminary and do not guarantee the availability of the name .
Your may reserve more than o ne corporate name in one application. The fee
is $25.00 for each name reserved.
A name is reserved for 90 days.
To reserve a corporate name, mail the original and one copy of your
APPLICATION FOR RESERVATION OF NAME along with the $25.00
filing fee for each name reserved (make check payable to the Illinois Secretary of
State) , to:
Secretary of State
Department of Business Services
Springfield, IL 62756
Telephone: (217) 782 -9521
Step 2: INSTRUCTIONS FOR FILING ARTICLES OF INCORPORATION
NOTE: When you file the Articles of Incorporation, you can also
file a Certificate of Registration issued by the department or
board regulating your profession. See Introduction. You must file
this Cert ificate of Registration before opening for business.
See FORM: IL -00INCP
ARTICLES OF INCORPORATION
This form should be typed or printed.
1: Fill in the corporate name you have reserved.
2: Name your initial Registered Agent (the person who will accept legal
documents and process for the corporation). Provide the physical address
(DO NOT USE P.O. BOX) of the business.
3. List the purpose of the corporation. You must state the purpose o f the
corporation is to engage in the practice of in the State of Illinois.
4: Paragraph 1: The By -Laws in this packet provide only for the issuance of
“common” stock. You will decide the par value, the number of shares
authorized, the number of shares proposed to be issued, and the consideration
which will be paid for those shares. SEE THE FEE SCHEDULE
ATTACHED TO THE ARTICLES OF INCORPORATION (AT BOTTOM,
NOTE 1). IN ADDITION TO THE FILING FEE, YOU MUST PAY A
FRANCHISE TAX.
4: Paragraph 2: The answer to this question is “(N/A)”. This package does
not provide for these qualifications.
5, 6, and 7: These items are “OPTIONAL.”
8: Only one incorporat or is required to sign the Articles of Incorporation.
THE ARTICLES OF INCORPORATION MUST BE SIGNED IN
BLACK INK!
You must file the original and one copy of the Articles of Incorporation. A
photocopy of the original is sufficient for the copy.
SEE THE FEE SCHEDULE ATTACHED TO THE ARTICLES OF
INCORPORATION. IN ADDITION TO THE FILING FEE, YOU MUST
PAY A FRANCHISE TAX.
You must file a Certificate of Registration with the Articles.
Step 3: Mail the original and one copy of the ARTICLES OF INCORPOR ATION , (the
Certificate of Registration if you have obtained it), and the total filing fee and
franchise tax that is due (make check payable to the Illinois Secretary of State),
to:
Secretary of State
Department of Business Services
Springfield, IL 62756
A sample cover letter to send with ARTICLES OF INCORPORATION is
included.
See FORM: IL -PC -TL
SAMPLE TRANSMITTAL LETTER
Step 4: Upon return of the Articles of Incorporation, conduct an Initial mee ting at which
time directors and officers are elected, by -laws are adopted, and other action is
taken.
See FORM : IL -PC -OM
SAMPLE ORGANIZATIONAL MINUTES
See FORM: IL -PC -BL
SAMPLE BY -LAWS
Step 5: Apply for a Federal Tax Identification Number. This is done with form IRS -SS -
4. Mail to your regional IRS office.
See Supplemental Form: US -IRS -SS -4
APPLICATION FOR FEDERAL TAX ID & INSTRUCTIONS
Step 6: If you elect Subchapter S status so that the corporation income and losses will
pass to the shareholders, complete and file form 2553 with the Internal Revenue
Service. It is important that this form be filed timely or the corporation will have
to pay the C Corporation tax rate.
See Supplemental F orm: US -IRS -2553
ELECTION OF S -CORPORATION STATUS & INSTRUCTIONS
Step 7: Open a Corporate bank account and conduct business.
Step 8: Hold an annual meeting of the directors and shareholders at least once a year to
elect directors and officers for the upcoming year and to take action as needed.
See FORM: IL -PC -AM
SAMPLE ANNUAL MINUTES
General: For your convenience, additional forms are included such as Sample Corporate
Notices of Meetings, Resolutions, Simple Stock Ledger & Cer tificate.
See Supplemental Form: IL -PC -CR
* * *
Accessories
U. S. Legal Forms, Inc. offers the following corporate accessories:
Corporate Seal:
If you would like to order a corporate seal call U.S. Legal Forms, Inc. at
(601) 825 -0382. Engraved with your name: $24.95 plus shipping, or see
http://www.uslegalbookstore.com/officeproducts/
Corporate Books:
See http://www.uslegalbookstore.com/officeproducts/
Imprinted (or blank) Lithographed Stock Certificates:
Preview: http://www.uslegalforms.com/images/cert2.gif
Order for your state: http://www.uslegalforms.com/stock -certificates.htm
* * *
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