How to Start a Business in Illinois

8 Steps to Starting a Small Business in Illinois

You’ve got a great business idea, and you’re ready to make it a reality. Now it’s time to get down to the nuts and bolts of forming and registering your business.

In this guide:

1. Choose a business structure

First off, consider the structure you want for your business. Most businesses in the US are informal businesses, meaning they don’t register with the Secretary of State and don’t have liability protection. Formal businesses, like LLCs and corporations, have stricter requirements but can protect the owners’ personal assets if the company is sued.

Informal business structures

There are two types of informal business structure:

• Sole proprietorship. An unincorporated business with only one owner.
• General partnership. An unincorporated business with two or more owners.

The pros of having an informal business are that there’s less paperwork and fewer fees and requirements. Most small businesses start out as informal businesses.

The major con is that in the eyes of the law, you ARE your business. If your business is sued or goes into debt, it’s the same as if you personally were sued or went into debt. Liability protection is the main reason businesses choose to incorporate.

Formal business structures

The main formal business structures are LLCs and corporations:

• LLCs enjoy limited liability protection (LLC stands for “limited liability company”) while also having flexibility in how they are managed and taxed. This flexibility makes them a great choice for most small business owners.
• Corporations are the oldest type of formal business, and they’re a good choice if you want to raise capital from investors. However, they have more stringent requirements than LLCs—like having a board of directors and having annual meetings—so they’re not as popular as LLCs.

When you hire us to form your LLC or corporation, you get instant access to hundreds of free forms and resources, a year of reliable registered agent service, and much more.

2. Pick a business name

The Illinois Secretary of State has a few requirements for LLC and corporation names. Informal businesses like sole proprietorships don’t need to register their business name with the state but may need to register an assumed name with their county clerk.

LLC and corporation name requirements

Your LLC or corporation name must:

• Include “Limited Liability Company, “LLC,” or “L.L.C.” if the business is an LLC.
• Include “Corporation,” “Corp,” “Company,” “Co,” “Incorporated,” or Inc” if the business is a corporation.
• Not be the same as or extremely similar to another registered business name in the state.

To make sure your preferred name isn’t already taken, you can do an Illinois Business Entity Search or use the Corporate Name Availability Inquiry Form.

DBA/assumed names

A DBA, which is called an assumed name in Illinois, is any name you use to do business that isn’t your company’s legal name (or the legal name of the owner(s), for informal businesses). Any type of business can register a DBA.

Sole proprietors and general partnerships need to register their assumed name with the county clerk’s office in every county where they do business. For example, if you’re starting a general partnership in Chicago, you’ll need to register your assumed name with the Cook County Clerk’s office.

LLCs and corporations that want to use an assumed name need to register the name with the Secretary of State.

Domain names

A domain name is the address for a website. For example, our domain is illinoisregisteredagent.net. Even if you’re not ready to start a website just yet, it’s a good idea to register your preferred domain name right away so that no one else gets to it first.

Our company formation and registered agent services include FREE domain registration for your first year (up to $25 value).

3. Register your business

Registering your business will look different depending on whether you’re starting a formal or informal business. Informal businesses don’t need to register with the Secretary of State, but they may still need to register an assumed name or apply for business licenses or permits.

LLCs and corporations register by filing Articles with the Secretary of State and paying the $150 filing fee. For most companies, it’s fastest to file online:

LLC: Articles of Organization
Corporation: Articles of Incorporation

NOTE: Before you can file your Articles, you’ll need to appoint an Illinois registered agent. Your registered agent is the individual or registered agent service (like us!) authorized to accept lawsuits or other legal mail sent to your business. They must reside in Illinois and be available during normal business hours to accept service of process in person.

4. Apply for business licenses and permits

There’s no general state business license in Illinois, but most businesses need some sort of license or permit to operate legally. Common business licenses and permits include:

Professional licenses

Many businesses require an industry-specific license. For example, to open a bar, you first need a liquor license. Professional taxidermists need a taxidermy license.

You can learn more about professional licenses on the IL.gov website.

Local licenses and permits

Each city and county you operate in will have its own licensing requirements. Chicago and Springfield both require new businesses to apply for a city business license. Depending on where you run your business, you may need a building or zoning permit or a license for home-based businesses. Reach out to your city and county government to learn what’s required for your business.

5. Apply for an Employer Identification Number (EIN)

Corporations, multi-member LLCs, and all businesses with employees are required to have an EIN. An EIN is a federal tax identification number, sort of like a social security number for your business. You’ll need your EIN to file business taxes.

You can apply for an EIN for free on the IRS website.

6. Register for business taxes

Your specific tax responsibilities will depend on the type of business you own. For example, retailers will need to collect sales tax (6.25%) and corporations need to pay the state corporate income tax (9.5%). You can register for state business taxes by creating an account with MyTaxIllinois.

7. Open a business bank account

Incorporated businesses like LLCs and corporations are required to keep their business finances completely separate from their owners’ personal finances. Mixing company and personal money is called “piercing the corporate veil,” and companies that do this can lose the benefits of limited liability protection. That’s why it’s important to have a corporate bank account for managing your company’s assets.

While sole proprietors and general partnerships aren’t required to open a business bank account, doing so can help you better track your company’s expenses and earnings, which will come in handy at tax time.

Every bank has different requirements for opening a business bank account, so it’s a good idea to call ahead and see what documentation you need.

8. Prepare for the Illinois annual report

Illinois businesses need to be maintained over time. For LLCs and corporations, this means filing the Illinois annual report with the Secretary of State each year. This report updates the state on your business’ ownership and contact information.

Annual report due dates and filing fees

Your annual report is due BEFORE the anniversary month of the date you formed your company. For example, if you formed your company with the state on October 31^st, 2024, your first annual report will be due by September 30^th, 2025.

The filing fee is $25. Corporations may also need to pay Illinois franchise tax, which is included as part of the annual report. Luckily, as of 2025, the first $10,000 of liability is exempt from this tax, so many corporations don’t have to pay anything other than the $25 filing fee.

Our annual report compliance service

When you’re wrapped up in the responsibilities for running a business, it’s easy to forget the annual report deadline. Businesses that don’t file their report are involuntarily dissolved by the state. When you hire us as your registered agent, we’ll send reminders before your annual report due date and then file for you for $100 plus the state fee, making it effortless to keep your company active. Prefer to handle your own report filing? Simply cancel this service in your client account.