What are the steps to legally start a small business in Illinois and what licenses or permits are required?

To legally start a small business in Illinois

There are a number of steps that must be taken and specific licenses or permits that may be required depending on the type of business being opened.

1. Choose a Business Structure:

The first step is to choose the business structure that best suits your needs, such as a sole proprietorship, partnership, LLC, or corporation. Each structure has its own legal and tax implications, so it is important to consult with a licensed attorney or tax professional to determine which is the best option for your business.

2. Register Your Business:

All businesses in Illinois must be registered with the Illinois Secretary of State. This can be done online through the Illinois Business Registration Portal. Registration fees vary depending on the type of business structure and the types of services being offered.

3. Obtain an Employer Identification Number (EIN):

Most businesses will need to obtain an EIN from the IRS. This is a unique identification number used for tax purposes and is required if you plan to hire employees or file taxes as a business.

4. Apply for Licenses and Permits:

Depending on the type of business, there may be additional licenses and permits required at the local, state, and federal levels. For example, a restaurant must obtain a food license from the Illinois Department of Public Health and a business that sells alcohol must obtain a liquor license from the Illinois Liquor Control Commission.

5. Comply with Tax and Employment Laws:

All businesses in Illinois must comply with state and federal tax and employment laws. This includes paying state and federal taxes, withholding payroll taxes for employees, and obtaining workers’ compensation insurance.

Potential limitations or exceptions to this advice may include specific regulations or restrictions on certain types of businesses. For further action, it is recommended to consult with a licensed attorney or business advisor to determine if any additional steps or permits are required.

As a legal document, we recommend creating a comprehensive Business Plan that outlines the goals, objectives, and financial projections for the business. This can be used for financing or legal purposes, and will provide a roadmap for the business moving forward. Additionally, a business operating agreement or partnership agreement may be necessary to establish roles and responsibilities for owners and employees.