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What legal steps do I need to take before starting a small business in Illinois?

Picture of Chris Battis By   ·  1 minute read

Legal Steps for Starting a Small Business in Illinois

Before starting a small business in Illinois, there are several legal steps that need to be taken:

  1. Choose a legal structure for your business: There are different legal structures available for businesses, such as Sole Proprietorship, Partnership, Limited Liability Company (LLC), Corporation, and S-Corporation. Each structure has its own benefits and drawbacks, so it is important to consult with a lawyer or a CPA before choosing a structure.
  2. Register your business with the Illinois Secretary of State: You need to file Articles of Incorporation or Articles of Organization with the Illinois Secretary of State to officially register your business. The fees for registration depend on your chosen legal structure.
  3. Obtain relevant licenses and permits: Depending on your business activities, you may need to obtain specific licenses and permits to operate legally in Illinois. The Illinois Department of Commerce and Economic Opportunity can provide information on the licenses and permits required for your business.
  4. Register for taxes: You need to register for Illinois state taxes and federal taxes, such as the Employer Identification Number (EIN) and the Illinois Business Tax Number (IBT). You may also need to register for sales tax if you sell taxable goods or services.
  5. Obtain insurance: Depending on your business activities, you may need to obtain insurance to protect your business and assets. Speak with an insurance agent to determine the types of insurance you need.
  6. Comply with employment laws: If you plan to hire employees, you need to comply with federal and state employment laws, such as minimum wage laws, overtime and hours worked rules, and discrimination laws.
  7. Create necessary contracts: You may need to create contracts for your business, such as employment agreements, vendor agreements, and customer contracts. These contracts should be drafted by an attorney to ensure they are legally binding and protect your interests.

It is important to note that the above steps are not exhaustive and may vary depending on the specific business activities and legal requirements in Illinois. It is highly recommended to consult with a licensed attorney to ensure compliance with the relevant laws and regulations.