Our work is reader-supported, meaning that we may earn a commission from the products and services mentioned.

Illinois Business License Basics

Illinois Business License Basics

Advertising Disclosure


Illinois Business License Basics

Starting a small business in Illinois often means registering with several federal, state, and local agencies. Let’s review common Illinois business license registrations so your business starts off right.

Related: Guide to starting a business in Illinois 

Setting Up the Business

Sole proprietorship: In Illinois, a sole proprietorship is an unincorporated business owned by a single individual. The owner has complete control over the business but is personally liable for all debts and obligations. No formal registration is required, making it the simplest and most common form of business structure.

General partnership: A general partnership in Illinois is an unincorporated business owned by two or more individuals who share management responsibilities, profits, and losses. Partners have unlimited personal liability for the partnership’s debts and obligations. No formal registration is required, but a partnership agreement is recommended to outline the partners’ roles and responsibilities

Corporation: A corporation in Illinois is a legal entity separate from its owners, providing the owners (shareholders) with limited liability protection. Corporations are the most complex business structure to set up and have specific administrative requirements. 

Limited Liability Company (LLC): An LLC in Illinois combines aspects of sole proprietorships and corporations, offering flexibility in management and taxation. Owners, called members, have limited personal liability for the LLC’s debts and obligations, but they aren’t as complex as corporations. 

Related: Comparison of Business Structures

What Licenses Do Illinois Businesses Need?

With the business structure out of the way, we can begin looking at the different types of registrations businesses in Illinois may need. There isn’t a standard business license, as requirements vary depending on where the business is located and what it does. Here is a general overview of the different registrations your business may need.

General Business License

There is no general state of Illinois business license; however, many cities require businesses to be licensed to operate. Rules for business registration vary depending on location and the business’s activities. Below are a few cities that have licensing requirements.

  • Chicago: The Small Business Center issues business licenses for businesses operating in the City of Chicago, regulating industries such as retail stores, food establishments, daycare centers, manufacturing facilities, auto repair shops, and many more. The cost of a business license in Chicago can be pretty high, so be sure to check.
  • Aurora: The City of Aurora requires a business license for liquor establishments, pawn shops, second-hand stores, home-based daycares, and more.
  • Rockford: Businesses such as junk yards, towing services, bowling alleys, and more will need to obtain a business license from the City of Rockford.
  • Joliet: Business registration is required for any company operating within the corporate limits of the city. Additionally, certain businesses such as billiard halls, food service establishments, tattoo artists, ice cream trucks, and more have to register with the City Clerk’s Office.
  • Springfield: The City Clerk’s Office issues business licenses for entities operating bowling alleys, florists, funeral homes, and more.
Take the guesswork out of figuring out what licenses and permits are required to start your business with license research packages from Bizee and LegalZoom.

For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements. 

Assumed Business Name Registration

Sole proprietorships and partnerships in Illinois that want to operate under a business name other than the full name of the owner(s) will register for an Illinois Assumed Name (also known as a Doing Business As, DBA, Fictitious Business Name, or Trade Name) with the County Clerk’s Office in the county where the business is located.

Building & Zoning Permits

Zoning: In Illinois, zoning laws are regulated by local units of government, such as counties and municipalities. Check with your local zoning department or planning commission to ensure you can operate from your desired location.

Building Permit: A building permit is required for most construction, alterations, or additions to structures in Illinois. To obtain a permit, submit plans, specifications, and an application to your local building department or community development department.

Signage Permit: In Illinois, most local governments regulate the size, location, and type of business signage. Before installing any signs, check with your local zoning, building, or community development department for specific requirements and to obtain a sign permit.

Business Tax Number

The Illinois Business Tax Number (IBT) is an identification number issued by the Illinois Department of Revenue. Sometimes known as the REG-1 Form, the Illinois Business Registration Application is needed for businesses hiring employees, buying or selling products (sometimes referred to as getting a sales tax permit), or manufacturing goods.

Resale Certificate

Businesses purchasing merchandise to resell will usually want to obtain an Illinois Resale Certificate in order to not pay sales tax for merchandise that is being resold to customers.

Professional License

A variety of professions in the state are regulated and need to be registered before offering certain services. A few common professions that require licensing in Illinois include physical therapists, interior designers, detectives, cosmetologists, barbers, and massage therapists. Additional information, fees, and licensing requirements for professions are available from the Illinois Department of Financial and Professional Regulation (IDFPR).

In addition to professional licensing, there are a few other types of businesses that need licensing that are not covered by IDFPR, a few of which include:
Car dealers
Businesses selling liquor
Food establishments

Employer Identification Number (EIN)

The Illinois Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses operating in Illinois. It is used for tax filing and reporting purposes, similar to how an individual uses a Social Security number. Companies can apply for an EIN through the IRS website or by submitting a paper form.

Next Steps

While it’s a good start, there are so many different licenses that may be needed. Double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.

Illinois Business License Basics

Illinois Business License Basics

Leave a Reply

Your email address will not be published. Required fields are marked *

Some (but not all) of the links on StartUp101.com are affiliate links. This means that a special tracking code is used and that we may make a small commission on the sale of an item if you purchase through one of these links. The price of the item is the same for you whether it is an affiliate link or not, and using affiliate links helps us to maintain this website.

StartUp101.com is also a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Our mission is to help businesses start and promoting inferior products and services doesn’t serve that mission. We keep the opinions fair and balanced and not let the commissions influence our opinions.