# Illinois: benefit corporation guide
Reviewed 2026-10-11 · Compared form: Benefit corporation

Educational guide to selected statutes and agency guidance, not every court decision or a company-specific legal/tax opinion.

Balanced score: 74 / 100

## Comparison baseline
A small, active, private stock C corporation, after its first tax year, using the lowest capital/receipts/share-count tier, no taxable income or taxable alternative-minimum base, and ordinary online filings where available. It operates in the state being compared. Yearly costs include registry reports and the identified minimum state tax/license charge; multi-year charges are annualized. Variable income, receipts, sales, payroll and local taxes, agents and one-time formation costs are additional.

## Benefit company option
Usual rule: The usual benefit-corporation model is a for-profit stock company with a public-benefit purpose. Washington uses a related social-purpose form; eight states have no identified dedicated for-profit benefit form.

This state: General public benefit is mandatory; specific benefits are optional.

Why it differs: Illinois offers Benefit corporation.

### Benefit company option
Score: 20
Illinois offers Benefit corporation. The benefit option receives the full form credit.
- [805 ILCS 40/3.01](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K3.01.htm)

## Personal protections
Usual rule: The common starting point is a director protection clause that must be added to the charter. Many states do not extend that ordinary clause to officers. Exceptions, eligible people and covered claims differ.

This state: Optional director-only charter monetary exculpation for corporation/shareholder fiduciary claims; exceptions loyalty, bad faith, intentional misconduct/knowing law violation, unlawful distributions, improper personal benefit and pre-effective conduct. Benefit-specific rule: Company monetary damages barred under benefit Act for failure to pursue/create benefit. Director and officer protection for compliant conduct and benefit failure; benefit-director exceptions include self-dealing, willful misconduct or knowing law violation.

Why it differs: Illinois keeps this ordinary shield limited to directors; the charter must elect the ordinary protection. All corporations require a benefit director, unlike optional/private-exempt models.

### Protection for board members
Score: 6
Illinois has an identified director monetary-protection provision in the compared scope, which earns this credit. Optional director-only charter monetary exculpation for corporation/shareholder fiduciary claims; exceptions loyalty, bad faith, intentional misconduct/knowing law violation, unlawful distributions, improper personal benefit and pre-effective conduct.
- [805 ILCS 5/2.10(b)(3)](https://www.ilga.gov/documents/legislation/ilcs/documents/080500050K2.10.htm)

### Protection for company officers
Score: 0
Illinois does not extend the scored ordinary charter shield to officers acting only as officers, so no officer credit is awarded. Separate indemnification or insurance may still matter.
- [805 ILCS 5/2.10(b)(3)](https://www.ilga.gov/documents/legislation/ilcs/documents/080500050K2.10.htm)

### Protection without extra setup
Score: 0
Illinois requires an elected charter provision for the scored ordinary protection; it gets no automatic-coverage credit. The clause must actually be put in the charter to help.
- [805 ILCS 5/2.10(b)(3)](https://www.ilga.gov/documents/legislation/ilcs/documents/080500050K2.10.htm)

### Protection when a benefit goal is missed
Score: 2
Illinois earns the benefit-specific credit for company. Company monetary damages barred under benefit Act for failure to pursue/create benefit. Director and officer protection for compliant conduct and benefit failure; benefit-director exceptions include self-dealing, willful misconduct or knowing law violation.
- [805 ILCS 40/4.01](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.01.htm)
- [805 ILCS 40/4.05](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.05.htm)
- [805 ILCS 40/4.10](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.10.htm)
- [805 ILCS 40/4.20](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.20.htm)

### Board protection for benefit work
Score: 4
Illinois earns the benefit-specific credit for directors. Company monetary damages barred under benefit Act for failure to pursue/create benefit. Director and officer protection for compliant conduct and benefit failure; benefit-director exceptions include self-dealing, willful misconduct or knowing law violation.
- [805 ILCS 40/4.01](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.01.htm)
- [805 ILCS 40/4.05](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.05.htm)
- [805 ILCS 40/4.10](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.10.htm)
- [805 ILCS 40/4.20](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.20.htm)

### Officer protection for benefit work
Score: 4
Illinois earns the benefit-specific credit for officers. Company monetary damages barred under benefit Act for failure to pursue/create benefit. Director and officer protection for compliant conduct and benefit failure; benefit-director exceptions include self-dealing, willful misconduct or knowing law violation.
- [805 ILCS 40/4.01](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.01.htm)
- [805 ILCS 40/4.05](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.05.htm)
- [805 ILCS 40/4.10](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.10.htm)
- [805 ILCS 40/4.20](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.20.htm)

## Less paperwork
Usual rule: The most common benefit model requires an annual report using an outside assessment framework, without a separate state benefit-report filing. An outside framework does not necessarily mean paying for certification.

This state: Annual shareholder report within 120 days or with other annual report; all reports public website, latest free copy if no website. Report identifies known/record owners of at least 5% and benefit-director opinion. No state benefit-report filing required by this section. Assessment rule: Annual performance assessment must use a third-party standard. Statute requires assessment against a standard but does not require buying certification or external audit in its reporting provision.

Why it differs: Illinois: Annual; Required outside framework; no separate state benefit-report filing. An additional benefit-director or approval step applies to this private-company scope.

### How often reports are needed
Score: 5
Illinois: Annual. An annual report gets less ease-of-operation credit than a biennial report or no mandatory report because it must be prepared more often.
- [805 ILCS 40/5.01](https://www.ilga.gov/legislation/ILCS/details?ActID=3419&ActName=Benefit+Corporation+Act.&ChapAct=805+ILCS+40%2F&Chapter=BUSINESS+ORGANIZATIONS&ChapterID=65&MajorTopic=BUSINESS+AND+EMPLOYMENT&SeqEnd=&SeqStart=1700000)

### Choice of impact framework
Score: 3
Illinois: Required. Using an outside framework reduces flexibility credit but earns transparency credit.
- [805 ILCS 40/5.01(a)(2)](https://www.ilga.gov/legislation/ILCS/details?ActID=3419&ActName=Benefit+Corporation+Act.&ChapAct=805+ILCS+40%2F&Chapter=BUSINESS+ORGANIZATIONS&ChapterID=65&MajorTopic=BUSINESS+AND+EMPLOYMENT&SeqEnd=&SeqStart=1700000)
- [805 ILCS 40/5.01](https://www.ilga.gov/legislation/ILCS/details?ActID=3419&ActName=Benefit+Corporation+Act.&ChapAct=805+ILCS+40%2F&Chapter=BUSINESS+ORGANIZATIONS&ChapterID=65&MajorTopic=BUSINESS+AND+EMPLOYMENT&SeqEnd=&SeqStart=1700000)

### Extra reports sent to the state
Score: 4
Illinois: No separate state benefit-report filing. No separate state submission earns the no-extra-filing credit. Preparing, sharing or publishing the report may still be required.
- [805 ILCS 40/5.01](https://www.ilga.gov/legislation/ILCS/details?ActID=3419&ActName=Benefit+Corporation+Act.&ChapAct=805+ILCS+40%2F&Chapter=BUSINESS+ORGANIZATIONS&ChapterID=65&MajorTopic=BUSINESS+AND+EMPLOYMENT&SeqEnd=&SeqStart=1700000)

### Extra board or approval steps
Score: 0
Illinois requires an additional benefit-director or report-approval procedure in this private-company scope, so it receives no no-extra-step credit. Mandatory consideration of listed stakeholders; no required priority unless charter specifies one. All benefit corporations must designate an independent benefit director, with special rules when shareholders/others perform board duties.
- [805 ILCS 40/4.01](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.01.htm)
- [805 ILCS 40/4.05](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.05.htm)
- [805 ILCS 40/5.01](https://www.ilga.gov/legislation/ILCS/details?ActID=3419&ActName=Benefit+Corporation+Act.&ChapAct=805+ILCS+40%2F&Chapter=BUSINESS+ORGANIZATIONS&ChapterID=65&MajorTopic=BUSINESS+AND+EMPLOYMENT&SeqEnd=&SeqStart=1700000)

## Yearly state costs and taxes
Usual rule: There is no uniform state charge. Compare the recurring report fee together with the minimum state tax or license charge for the stated small-company scenario. A low income-tax rate alone does not show this cost.

This state: Registry reporting: $75 per year on an annualized basis. Minimum tax/license used here: $0. Small active domestic C corporation with no Illinois net taxable income and allocated paid-in capital at or below $10 million: annual franchise liability is within the $10,000 exemption and income/replacement tax is $0. Excludes report fees and capital-change transactions.

Why it differs: Illinois has a compared recurring floor of $75 per year, including $0 in identified minimum tax/license charges.

### Yearly filings plus minimum state taxes
Score: 12
Illinois has a compared recurring floor of $75 per year, including $0 in identified minimum tax/license charges. Small active domestic C corporation with no Illinois net taxable income and allocated paid-in capital at or below $10 million: annual franchise liability is within the $10,000 exemption and income/replacement tax is $0. Excludes report fees and capital-change transactions. Lower recurring floors earn more cost credit. Profit/receipts-based taxes and local charges are additional; this is not the whole tax bill.
- [BCA 14.05 D, revised February 2026](https://www.ilsos.gov/content/dam/publications/pdf_publications/bca1405d.pdf)
- [805 ILCS 40/5.01](https://www.ilga.gov/legislation/ILCS/details?ActID=3419&ActName=Benefit+Corporation+Act.&ChapAct=805+ILCS+40%2F&Chapter=BUSINESS+ORGANIZATIONS&ChapterID=65&MajorTopic=BUSINESS+AND+EMPLOYMENT&SeqEnd=&SeqStart=1700000)
- [805 ILCS 5/15.35](https://www.ilga.gov/ftp/ILCS/Ch%200805/Act%200005/080500050K15.35.html)
- [Illinois Department of Revenue: business income and replacement tax rates](https://tax.illinois.gov/questionsandanswers/answer.83.html)
- [Illinois Revenue: C-corporation income and replacement tax rates](https://tax.illinois.gov/questionsandanswers/answer.83.html)
- [Illinois Secretary of State: domestic annual report franchise calculation and 2025-forward exemption](https://www.ilsos.gov/content/dam/publications/pdf_publications/c289.pdf)
- [Illinois Revenue: corporate base-income and filing requirements](https://tax.illinois.gov/research/taxinformation/income/corporate.html)

## Becoming a benefit company and changing back
Usual rule: Two-thirds approval is the common benefit-status gate. Some states use ordinary amendment votes, some demand more, and class-by-class voting can give even a small share class a veto.

This state: Becoming a benefit company: 2/3 each class/series. Minimum-status vote: 2/3 each class/series including otherwise nonvoting shares; applies to entry, exit and nonordinary all/substantially-all asset disposition. Changing back: 2/3 each class/series

Why it differs: Illinois entry uses 2/3 each class/series; exit uses 2/3 each class/series. Easier entry helps adoption. Easier exit also scores higher here, although a mission-preservation priority may favor a harder exit.

### Ease of becoming a benefit company
Score: 6
Illinois: becoming a benefit company requires 2/3 each class/series. Ordinary votes receive more ease-of-change credit than two-thirds; three-quarters, 90% and unanimous gates receive less. Class votes, notice, appraisal and any higher charter requirements remain.
- [805 ILCS 40/1.10](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K1.10.htm)
- [805 ILCS 40/2.05](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K2.05.htm)
- [805 ILCS 40/2.10](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K2.10.htm)

### Ease of changing status later
Score: 6
Illinois: changing back requires 2/3 each class/series. Ordinary votes receive more ease-of-change credit than two-thirds; three-quarters, 90% and unanimous gates receive less. Class votes, notice, appraisal and any higher charter requirements remain.
- [805 ILCS 40/1.10](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K1.10.htm)
- [805 ILCS 40/2.05](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K2.05.htm)
- [805 ILCS 40/2.10](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K2.10.htm)

## Public transparency
Usual rule: Annual reporting, public access, an outside assessment framework and a mandatory mission duty are common. Stronger disclosure can help people check promises while adding work or exposing owner information.

This state: Mandatory consideration of listed stakeholders; no required priority unless charter specifies one. All benefit corporations must designate an independent benefit director, with special rules when shareholders/others perform board duties. Disclosure: Annual shareholder report within 120 days or with other annual report; all reports public website, latest free copy if no website. Report identifies known/record owners of at least 5% and benefit-director opinion. No state benefit-report filing required by this section. Enforcement: Corporation directly; derivatively any shareholder, director, 5% parent-equity holders, and charter/bylaw designees. No 2% floor on company shareholder.

Why it differs: Illinois requires public access to the report. Public report discloses known/record 5% owners. Any shareholder can enforce; no percentage floor.

### Reports the public can read
Score: 8
Illinois requires report access for people outside the company, so it earns public-access credit. Annual shareholder report within 120 days or with other annual report; all reports public website, latest free copy if no website. Report identifies known/record owners of at least 5% and benefit-director opinion. No state benefit-report filing required by this section.
- [805 ILCS 40/5.01](https://www.ilga.gov/legislation/ILCS/details?ActID=3419&ActName=Benefit+Corporation+Act.&ChapAct=805+ILCS+40%2F&Chapter=BUSINESS+ORGANIZATIONS&ChapterID=65&MajorTopic=BUSINESS+AND+EMPLOYMENT&SeqEnd=&SeqStart=1700000)

### Regular updates on progress
Score: 6
Illinois: Annual. Annual updates earn more transparency credit than biennial updates; no mandated report earns none.
- [805 ILCS 40/5.01](https://www.ilga.gov/legislation/ILCS/details?ActID=3419&ActName=Benefit+Corporation+Act.&ChapAct=805+ILCS+40%2F&Chapter=BUSINESS+ORGANIZATIONS&ChapterID=65&MajorTopic=BUSINESS+AND+EMPLOYMENT&SeqEnd=&SeqStart=1700000)

### An outside impact framework
Score: 3
Illinois: Required. Using an outside framework reduces flexibility credit but earns transparency credit.
- [805 ILCS 40/5.01(a)(2)](https://www.ilga.gov/legislation/ILCS/details?ActID=3419&ActName=Benefit+Corporation+Act.&ChapAct=805+ILCS+40%2F&Chapter=BUSINESS+ORGANIZATIONS&ChapterID=65&MajorTopic=BUSINESS+AND+EMPLOYMENT&SeqEnd=&SeqStart=1700000)
- [805 ILCS 40/5.01](https://www.ilga.gov/legislation/ILCS/details?ActID=3419&ActName=Benefit+Corporation+Act.&ChapAct=805+ILCS+40%2F&Chapter=BUSINESS+ORGANIZATIONS&ChapterID=65&MajorTopic=BUSINESS+AND+EMPLOYMENT&SeqEnd=&SeqStart=1700000)

### A duty to consider the mission
Score: 3
Illinois makes a mission duty mandatory, so it earns this credit. Mandatory consideration of listed stakeholders; no required priority unless charter specifies one. All benefit corporations must designate an independent benefit director, with special rules when shareholders/others perform board duties.
- [805 ILCS 40/4.01](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.01.htm)
- [805 ILCS 40/4.05](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.05.htm)

## State taxes
An ordinary C corporation pays 7% Illinois income tax plus 2.5% personal property replacement tax on Illinois net income, a combined nominal 9.5%. Both are income-based; the capital-based franchise exemption does not exempt corporate income.
Annual franchise tax is generally 0.1% of Illinois-allocated paid-in capital, with a $25 calculated minimum before the exemption. The first $10,000 of franchise-tax liability is exempt for filing periods January 1, 2025 and later, so a small corporation can owe $0 franchise tax. Paid-in-capital changes can trigger separate additional franchise calculations. The $75 annual report fee is separate.
Illinois income/replacement tax uses federal taxable income with state modifications and applicable allocation/apportionment. Qualification can require an IL-1120 filing even without income. Capital allocation for Secretary of State franchise tax uses a different property/business formula and must be calculated separately.

## Full reviewed legal topics

### purpose
General public benefit is mandatory; specific benefits are optional.

### board
Mandatory consideration of listed stakeholders; no required priority unless charter specifies one. All benefit corporations must designate an independent benefit director, with special rules when shareholders/others perform board duties.

### standard
Annual performance assessment must use a third-party standard. Statute requires assessment against a standard but does not require buying certification or external audit in its reporting provision.

### certification
Statute requires assessment against a standard but does not require buying certification or external audit in its reporting provision.

### report
Annual shareholder report within 120 days or with other annual report; all reports public website, latest free copy if no website. Report identifies known/record owners of at least 5% and benefit-director opinion. No state benefit-report filing required by this section.

### enforcement
Corporation directly; derivatively any shareholder, director, 5% parent-equity holders, and charter/bylaw designees. No 2% floor on company shareholder.

### benefitLiability
Company monetary damages barred under benefit Act for failure to pursue/create benefit. Director and officer protection for compliant conduct and benefit failure; benefit-director exceptions include self-dealing, willful misconduct or knowing law violation.

### ordinaryExculpation
Optional director-only charter monetary exculpation for corporation/shareholder fiduciary claims; exceptions loyalty, bad faith, intentional misconduct/knowing law violation, unlawful distributions, improper personal benefit and pre-effective conduct.

### statusChange
Minimum-status vote: 2/3 each class/series including otherwise nonvoting shares; applies to entry, exit and nonordinary all/substantially-all asset disposition.

## Costs and conditions

### regularReport
Ordinary domestic corporation annual report filing fee is $75; franchise tax is separate.

### benefitReport
No mandatory state benefit-report filing in the cited reporting provision; no separate required filing fee identified.

### minimumTax
Franchise-tax liability first $10,000 is exempt on/after January 1, 2025. Thus zero franchise tax for liability below exemption; higher paid-in-capital cases may owe more. Separate Illinois C-corporation income tax is 7% and replacement tax 2.5% of net income; the capital-based franchise exemption is not an income-tax exemption.

## Conversion route
Existing domestic stock corporation: use the statute’s charter/articles election process and its board, shareholder, class and notice requirements.
Minimum-status vote: 2/3 each class/series including otherwise nonvoting shares; applies to entry, exit and nonordinary all/substantially-all asset disposition.

## Important distinctions
- All corporations require a benefit director, unlike optional/private-exempt models.
- Public report discloses known/record 5% owners.
- Any shareholder can enforce; no percentage floor.

## Source qualifications
- Franchise-tax amount above exemption requires entity-specific capital/allocation calculation.
Official statute text was read through current indexed official pages when some direct requests produced certificate/access errors.

## All reviewed official/primary links
- [805 ILCS 40/3.01](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K3.01.htm)
- [805 ILCS 40/4.01](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.01.htm)
- [805 ILCS 40/4.05](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.05.htm)
- [805 ILCS 40/5.01(a)(2)](https://www.ilga.gov/legislation/ILCS/details?ActID=3419&ActName=Benefit+Corporation+Act.&ChapAct=805+ILCS+40%2F&Chapter=BUSINESS+ORGANIZATIONS&ChapterID=65&MajorTopic=BUSINESS+AND+EMPLOYMENT&SeqEnd=&SeqStart=1700000)
- [805 ILCS 40/5.01](https://www.ilga.gov/legislation/ILCS/details?ActID=3419&ActName=Benefit+Corporation+Act.&ChapAct=805+ILCS+40%2F&Chapter=BUSINESS+ORGANIZATIONS&ChapterID=65&MajorTopic=BUSINESS+AND+EMPLOYMENT&SeqEnd=&SeqStart=1700000)
- [805 ILCS 40/4.20](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.20.htm)
- [805 ILCS 40/4.10](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K4.10.htm)
- [805 ILCS 5/2.10(b)(3)](https://www.ilga.gov/documents/legislation/ilcs/documents/080500050K2.10.htm)
- [805 ILCS 40/1.10](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K1.10.htm)
- [805 ILCS 40/2.05](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K2.05.htm)
- [805 ILCS 40/2.10](https://www.ilga.gov/documents/legislation/ilcs/documents/080500400K2.10.htm)
- [BCA 14.05 D, revised February 2026](https://www.ilsos.gov/content/dam/publications/pdf_publications/bca1405d.pdf)
- [805 ILCS 5/15.35](https://www.ilga.gov/ftp/ILCS/Ch%200805/Act%200005/080500050K15.35.html)
- [Illinois Department of Revenue: business income and replacement tax rates](https://tax.illinois.gov/questionsandanswers/answer.83.html)
- [Illinois Revenue: C-corporation income and replacement tax rates](https://tax.illinois.gov/questionsandanswers/answer.83.html)
- [Illinois Secretary of State: domestic annual report franchise calculation and 2025-forward exemption](https://www.ilsos.gov/content/dam/publications/pdf_publications/c289.pdf)
- [Illinois Revenue: corporate base-income and filing requirements](https://tax.illinois.gov/research/taxinformation/income/corporate.html)