How to Start a Business in Illinois
Everything it takes to legally start a business in Illinois, in order — with the official Illinois links for each step. Most people can complete the core setup in one to three weeks.
Pick a structure (sole proprietor or LLC)
Most Illinois owners start as a sole proprietor (free, no filing) or form an LLC for liability protection. The LLC filing fee is about $150, and formation typically takes about 7–10 business days online. Confirm the current fee on the state site before you pay.
Name a registered agent
If you form an LLC or corporation, Illinois needs a registered agent with a physical in-state address. You can be your own agent if you're available during business hours, or hire a service for about $100–$150/year.
Get your EIN from the IRS
An Employer Identification Number is free from the IRS and takes a few minutes online. You need it to open a business bank account and to hire.
Register for Illinois taxes
Illinois has a state sales/use tax and has a state income tax. Illinois also imposes a Personal Property Replacement Tax (1.5% of net income) on LLCs treated as partnerships.
Confirm local licenses and permits
Illinois rarely issues a single statewide "business license" — most licensing is by city or county, plus profession-specific licenses. Check your city and your trade.
Open a business bank account and get insurance
Keep business and personal money separate from day one. General liability insurance is the baseline; some contracts also require a bond.
Put the ongoing report on your calendar
Illinois requires a annual report (about $75).
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Build my planFrequently asked
How much does it cost to start an LLC in Illinois?
The state filing fee is about $150. Beyond that, budget for a registered agent if you hire one (~$100–$150/year), the annual report (~$75), and any local license fees. An EIN is free.
Do I need an LLC to start a business in Illinois?
No. You can operate as a sole proprietor in Illinois with no state filing. An LLC adds a layer of personal liability protection and can make you look more established to customers and lenders — it's a judgment call based on your risk and goals, not a legal requirement.
How long does it take to form an LLC in Illinois?
Standard processing is about 7–10 business days online. Many states offer paid expedited options.
Does Illinois have a sales tax?
Yes. If your product or service is taxable in Illinois, you must register with the state tax agency before you collect tax. Many services are not taxable — confirm on the official site.
What ongoing filings does a Illinois LLC have?
Illinois requires a annual report (about $75).
Official sources
- Illinois — form your LLC or corporation
- Illinois — business tax registration
- Illinois — professional & occupational licensing
- Illinois — annual / periodic report
- IRS — apply for an EIN (free)
- SBA — 10 steps to start a business
Fees and timelines are commonly-cited figures last reviewed 2025-06 and can change — always confirm on the official site. This is educational information, not legal or tax advice.
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