Under 805 Ill. Comp. Stat. 310/1, Illinois permits the formation of a for-profit cooperative "for the purpose of purchasing of or selling to all shareholders and others, all sorts of groceries, provisions and any other articles of merchandise," which may include the product of a journalism organization. The statute also allows cooperative formation for those "who may be desirous of becoming interested in other like associations," which may be a catch-all provision that could include journalism associations.

Illinois allows non-profit corporations to operate as cooperatives, see 805 Ill. Comp. Stat. 105/103.05(a)(26), but does not have a special corporate form for a non-profit cooperative. Instead, you must follow the general rules for forming an Illinois non-profit organization, and adapt the non-profit form to operate as a cooperative.  Note that unlike most non-profit organizations, a non-profit cooperative may include the word "cooperative" in its corporate name. See 805 Ill. Comp. Stat. 310/22.

Because the cooperative law is complex, you may wish to seek the assistance of an attorney if you decide to form a journalism cooperative in Illinois (whether for-profit or non-profit). On this page, you will find general information about for-profit cooperatives in Illinois, (1) choosing a name for your cooperative; (2) recruiting directors and officers for your cooperative; (3) structuring your cooperative; (4) preparing the articles of incorporation and bylaws for your cooperative; (5) registering as an employer with the IRS and the State of Illinois for tax purposes; (6) submitting required forms to the state of Illinois; and (7) tax information.

1. Choose a name for the cooperative and check for availability.

• Please see our section on choosing and checking the availability of a name for your small business, as well as our section on the trademark law aspects of choosing a name.
• Illinois law requires that the names of for-profit corporations, including cooperatives, contain the word "corporation," "company," "incorporated," or "limited," or an abbreviation of one of such words. See 805 Ill. Comp. Stat. 5/405(a)(1).
• Additionally, your corporation name must be distinguishable from other names on file with the Secretary of State. You may search the availability of a new company name on the Secretary of State's website.
• A journalism corporation or association can only use the term "cooperative" in its name if (1) it complies with all provisions of the Co-operative Act or (2) it is organized as an Illinois nonprofit corporation for cooperative purposes. Your organization must include the word "cooperative" in its name if it is a for-profit cooperative. See 805 Ill. Comp. Stat. 310/22; 805 Ill. Comp. Stat. 5/4.05(a)(4).
• Although you are not required to do so, consider registering your business name as a federal and/or state trademark.

• A cooperative must have at least five directors, each of whom is elected by the shareholders. See 805 Ill. Comp. Stat. 310/7.
• The articles of incorporation must set forth the number of directors to be elected at the first meeting and identify the initial directors and incorporators by name and address. See 805 Ill. Comp. Stat. 310/1.
• The officers shall include a president, one or more vice presidents, a secretary, a treasurer, and a manager. The secretary and treasurer positions may be combined into one position, the secretary-treasurer. See 805 Ill. Comp. Stat. 310/7.
• Each of the officers, except the manager, may be a director of the cooperative.
• The bylaws of a cooperative shall provide for the election, terms, and discharge of directors. But a majority of the shareholders may vote to remove any director or officer for cause and to fill the vacancy. See 805 Ill. Comp. Stat. 310/7.

3. Structure your cooperative.

a. Determine the different levels of membership/stock and issue shares.

• The articles of incorporation (see below) must state the total number of shares that the cooperative has authority to issue and the number and class of shares to be issued before the cooperative commences business. See 805 Ill. Comp. Stat. 310/1.
• A cooperative must issue shares and receive at least a total of $1,000 from all shareholders combined for the shares before commencing business. See 805 Ill. Comp. Stat. 310/1.
• Cooperatives in Illinois can create different classes of membership with different rights and responsibilities. The articles of incorporation must set forth rules that govern the different classes of membership and the values of the shares. See 805 Ill. Comp. Stat. 310/1.
• Unlike cooperatives in other states, where shareholders get one vote regardless of the number of shares they own, under Illinois law, each shareholder can own and control up to five shares. Those shares cannot have an aggregate value of more than $500. See 805 Ill. Comp. Stat. 310/9. If their cash value exceeds $500, the directors are authorized to hold the excess shares in a trust. See 805 Ill. Comp. Stat. 310/12.
• Assignment and transfer of stock must be approved by a majority of the directors, but any person demanding assignment or transfer may appeal from the board of directors' action to the cooperative's members. The action of the members is final. See 805 Ill. Comp. Stat. 310/23.

b. Decide how to distribute profits.

• An Illinois cooperative must distribute profits in the form of patronage rebates to purchasers or sellers based on a percentage of purchases or sales; it may also issue dividends on shares of capital stock. See 805 Ill. Comp. Stat. 310/19.
• The directors may choose what proportions of the cooperative's profits or earnings will be distributed to those entitled and when distribution will occur. Distributions must be made at least once in every twelve months. See 805 Ill. Comp. Stat. 310/15.
• Cooperatives may, in their by-laws (see below), require dues of members, or another form of deposit of money with the cooperative. If a member fails to comply with a deposit requirement, the distribution received by that member must be reduced proportionally to the failure to comply. See 805 Ill. Comp. Stat. 310/15.

4. Prepare your articles of incorporation and bylaws.

• The articles of incorporation function as the basic governing document of the corporation. The articles of incorporation must state the name of the corporation, the corporation's purpose, and other information about the corporation. See 805 Ill. Comp. Stat. 310/1 for a complete list of information that the articles of incorporation must include. 
• The articles of incorporation may also include provisions regarding the regulation of internal affairs of the corporation. See 805 Ill. Comp. Stat. 310/1. 
• The bylaws are internal rules that govern most day-to-day activities and procedures. The bylaws for Illinois cooperatives must provide who is entitled to distributions, and they may provide procedures for subscriber voting and/or giving notice when a shareholder desires to sell his stock. See 805 Ill. Comp. Stat. 310/19, 310/12, 310/3.
• Shareholders can adopt bylaws at any regular or special meeting called for that purpose. See 805 Ill. Comp. Stat. 310/24.

5. Get your Employer Identification Number, register employees.

• Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.
• If you have an employee or employees in Illinois, you must register with the Illinois Department of Employment Security. You can find additional information on the Tax Registration Page of the Illinois Business Portal.
• Whenever you hire an employee in Illinois, you must inform both the IRS and the State of Illinois. The IRS details all of the necessary steps to complete, including verifying work eligibility and withholding allowances certificates, on its page entitled Hiring Employees. You can find information on what to do on the state level on the New Hire Reporting section of the Illinois Business Portal.

6. Register with the State of Illinois.

• You must submit your articles of incorporation and a $281.25 fee to the Illinois Secretary of State's office. You may do this in person, by mail, or online. However, business corporations with a specific purpose cannot be filed online, and business filed online will only have one class of stock. 
• Contact information for the Illinois Secretary of State can be found here. 
• Within 15 days after the Secretary of State completes filing procedures, you must file your articles of incorporation in the office of the recorder of the Illinois county in which the corporation's registered office is situated. See 805 Ill. Comp. Stat. 310/4.

7. Tax information.

• Cooperative corporations are taxed at the federal level in a special way. See our page on federal taxation of cooperatives for more information. 
• All new business owners must register for business taxes with the Illinois Department of Revenue. For details, see the Tax Registration Page of the Illinois Business Portal.
• As a small business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns.
• Illinois's corporate income tax rate is 4.8% plus a 2.5% personal property replacement tax (7.3% total). It is not clear whether Illinois cooperatives receive deductions for patronage rebates similar to federal tax deductions. 
• Illinois also imposes a franchise tax on corporations. The tax is based on the corporation's paid-in capital in Illinois. The initial franchise tax rate is 0.15% of paid-in capital in Illinois, and the minimum payment is $25. After a corporation's first year, the franchise tax is due annually at a rate of .10%, again with a minimum of $25.00.