Illinois Business Registration: A Step-by-Step Guide
Hiring in Illinois and need information about the Illinois business registration process? This step-by-step guide shows you how to register a business in Illinois if you're a new business owner or are registered in another state.
Published on September 9, 2022
Illinois Business Registration: An intro ✍️The Land of Lincoln, as Illinois is sometimes called, is known for its beautiful rolling plains punctuated by vibrant urban centers. It is home to the famous Chicago Bulls, the beloved Chicago Bears, and over 1,200 other sports teams. Illinois boasts a landscape carved by the Mississippi River, the Illinois River, and the Shawnee National Forest. It's where opportunities in agriculture rise alongside "biotechnology, advanced manufacturing, food production, energy, and logistics," making it a great place to live. In Illinois, there truly is something for everyone – which means that if you hire an Illinois native, they'll probably want to stay there. Fortunately, remote work has made collaborating across state lines easy, no matter where your business is based.To hire a new employee based in Illinois as quickly and smoothly as possible, you must ensure that you're registered and legally allowed to do so. Haven't registered yet because you need more information? This guide will go over the Illinois business registration process and take you through it step-by-step.
How to register a business in Illinois step-by-step 🙋The Illinois business registration process involves the following steps:
- Choose a business idea
- Choose a legal business entity
- Choose a business name
- Form your business with the State of Illinois
- Register for business taxes and apply for relevant licenses and permits
- Select a location and check zoning regulations. (Note: This isn’t necessary if your company is based in another state and looking only to hire remotely in Illinois.)
- Ensure you meet tax registration and reporting requirements
- Sign up for insurance
- Open a business bank account
Step 1: Choose a business ideaBefore you can register a business entity, much less hire an employee, you must already have a fleshed-out business idea. Make sure you've taken the time to do exploratory research for your business, taking into account your:
Step 2: Choose a legal business entity.Depending on several factors (e.g., tax incentives, access to financial assistance, etc.), you'll want to structure your business as a sole proprietorship, limited partnership (LP), limited liability partnership (LLP), limited liability company (LLC), corporation, or not-for-profit corporation.Note: This is not meant to be an exhaustive list of different types of business entities. For more information on business structures recognized by the IRS, please consult their Business Structures webpage.
Step 3: Choose a business name.A significant contributor to the success of a business is its name, so it needs to be unique. Is it available for use in Illinois, and is it available for use online?
Illinois business name searchTo confirm that the business name you'd like to use has not been used by another company, run a search on the Illinois Business Name Search app, which looks at a database of information on "corporations, not-for-profit corporations, limited partnerships, limited liability companies, and limited liability partnership."
Domain name searchAfterward, verify if the business name is also available as a domain by running a search on Google Domains. Once that’s done, you must examine the domain's history before you commit to using – and buying! – it.
Claim your nameIf your business name is available in Illinois and online, you'll want to claim it.If you're ready, you can go straight to registering your business, along with your business name. If you need more time, Illinois offers you the option to reserve your name for 90 days. Just file an Application for Reservation of Name with the Illinois Secretary of State (SOS):
- BCA-4.10 for Business Corporations
- NFP-104.10 for Not-for-Profit Corporations
- LLC-1.15 for Limited Liability Companies
Register for a trademark or service markYou might also want to register for a trademark or a service mark, which will protect the identity of your business. Trademarks and service marks are backed by federal law.For more information on trademarks and service marks, review the information below:
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Step 4: Form your business with the State of IllinoisThe exact steps you need to take to form your business with the State of Illinois depend on its legal structure.
Sole proprietorshipIf you're a sole proprietor and your business name is the same as your legal name, then you won't need to register with the Illinois SOS. If you're not employing anyone but yourself, you don't have to get an Employer Identification Number (EIN) either; you could use your social security number instead.Research and abide by the licenses, permits, and zoning requirements, and you can get started. For more information, read the Chamber of Commerce's post, "How to Start a Sole Proprietorship in Illinois."
PartnershipIf you're forming a general partnership (GP), you won't have to go through a formal business registration process or pay formation fees or ongoing maintenance fees. A partnership agreement isn't required either but is highly recommended, except in rare circumstances. However, if you're forming an LLP, Illinois requires you to file a Statement of Qualification with the SOS. For more LLP resources, please go to the Illinois Secretary of State website.
LLCsTo form a limited liability company (LLC), you'll need to file Articles of Organization with the SOS and appoint a registered agent in Illinois.Many entrepreneurs create an operating agreement that will govern their company. Because it's not a legal requirement, you won't need to file this with the SOS.
CorporationsYou'll need to file Articles of Incorporation with the SOS to form an Illinois corporation. You can do your filing online:
Step 5: Register for business taxes and apply for relevant licenses and permitsAfter you've formed your business, the next step is ensuring that you have the relevant licenses and permits. In fact, if you already have a business registered in another state, but you want to sell goods or hire employees, you will have to first apply for an Authority to Transact Business in Illinois and then register for business taxes via the MyTax Illinois website or Form REG-1, Illinois Business Registration Application. For more information on how to register your business in Illinois if you’re already registered in another state, read the Guide For Qualifying Foreign Corporations.Once you’ve registered for business taxes, you may also want to secure a federal EIN even if you're not legally required to do so because it's necessary for certain business transactions. For example, business bank accounts often need an EIN – a common reason people secure 147c letters.If your company operates in specific industries (e.g., health and safety or building and construction), you'll probably have to secure a regulatory, professional or occupational license/permit. For more information, check out the state's Registrations, Licenses & Permits, and/or the Illinois Department of Financial and Professional Regulation (IDFPR).Note: Hiring an employee based in Illinois while you're headquarters are in another state could impact your tax liabilities. If you need more information, please read our post on remote work taxes.
Step 6: Select a location and check zoning regulationsZoning is an essential consideration for many Illinois businesses (especially those moving to a new location), so check current zoning regulations to confirm if they apply to you.Note: This step doesn't apply to companies located in other states but are registering in Illinois because they want to hire a locally based team member.
Step 7: Ensure you meet tax registration and reporting requirementsIllinois is known for high business taxes, with nearly all types of businesses subject to different kinds of taxation. There have also been a few changes that started in 2020 that could impact your tax and reporting requirements.For more information on taxation in Illinois and who needs to pay for them, watch the video below:https://www.youtube.com/embed/4Vrz6PvBs3A
Step 8: Sign up for workers’ compensation insuranceIf you have employees, you must provide them with workers' compensation insurance. Otherwise, you could be asked to pay $500 daily for noncompliance – with a minimum fine of $10,000.
Step 9: Open a business bank accountWhile not always a requirement, a bank account for your business is recommended as it will help you keep your personal assets separate from your business. You'll need to have already formed your business, and you'll likely need to present your EIN.And that's it. You can start running your business in Illinois!
Frequently Asked Questions (FAQ) about registering a business in Illinois❓Have more questions about how to register your business in Illinois? Find the answers below:
How much does it cost to register a business in Illinois?The cost to register your business depends on your legal structure. For example, it's likely zero for sole proprietorships (if your business name is identical to your legal name and you don’t have any employees). The filing fee you need to pay starts climbing the more documents you need to provide. To arrive at how much setting up a business actually costs, click on the links below:
Do you have to register a small business in Illinois?You don't always have to register a small business in Illinois. For more information, go to Step 4: Form your business with the State of Illinois.
How do I register a business in Illinois that started in another state?If you already have a business registered in another state, you'll have to apply for an Authority to Transact Business in Illinois. For more information, read the Guide For Qualifying Foreign Corporations.
The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
My company is based in another state but wants/needs to hire employees in Illinois. What do I have to do?If you already have a company registered in another state but would like or need to hire an employee based in Illinois, you first need to create an account with MyTax Illinois.Once you've created your account, you need to obtain a tax account number from the Illinois Department of Revenue and Illinois Department of Employment Security. Click on "Identify your business" and complete the application form.For income tax withholding, you'll receive a taxpayer ID; for unemployment taxes, you'll receive an account number. Both numbers should be issued to you immediately upon completing the application form.Once you've been assigned your taxpayer ID and unemployment account number, you'll be able to register new employees, file wage reports, and submit unemployment taxes online. Remember: You are generally responsible for paying unemployment tax once you've paid $1500 in wages in a single calendar quarter or employed someone for a portion of a day in 20 weeks in a calendar year. Although generally, you are only required to file unemployment wage reports, employers with more than 25 employees in Illinois are required to file monthly wage reports to the Illinois Department of Employment Security.
How do I pay my Illinois state tax?To pay your Illinois state tax, go to your MyTax Illinois account. If you don't have one yet, sign up here.
How do I change my trading name in Illinois?If you're a corporation and need to change your name, you'll need to file a Corporation Name Change Amendment, which can be done online.
Illinois business resources from the Secretary of State 📃A Guide for Organizing NFP CorporationsA Guide for Organizing Domestic CorporationsA Guide for Qualifying Foreign CorporationsA Digest of the Illinois Law for the Registration and Protection of Trademarks and ServicemarksA Guide for Organizing Domestic Limited Liability Companies
Streamline your state registration with Pilot. 📈Are you interested in streamlining your state registration process? With Pilot, you can complete state registrations online, from one platform, in all 50 US states, plus Washington, DC. Eliminate hours of manual effort from the process by using Pilot. Learn more about our state registrations feature.If you would also like to expand your company globally, our team of HR and payroll experts is happy to guide you through any questions.
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