How to Get a Small Business License in Illinois

The creation of a new business comes with legal requirements. Before opening for business, you'll need to make sure you've satisfied all the regulatory requirements at the federal, state, and local levels, including obtaining the necessary licenses and permits for your small business.

Let's take a look at the licenses, permits, and registrations you need to start your Illinois business.

Which Business Licenses Do You Need for Your Small Business?

When starting a business in Illinois, you must:

• register your business entity with the Illinois Secretary of State (SOS)
• file taxes with the Illinois Department of Revenue (DOR), and
• apply for business licenses and permits with your state, county, and town.

The types of licenses and permits your business must apply for depends on your business structure, industry, and location. The main types of business licenses, permits, and registrations are:

• general business licenses
• professional licenses
• seller's permits (sometimes called "sales tax certificate")
• zoning and building permits, and
• doing business as (DBA) registrations.

(For more general guidance, see our article on the legal requirements for starting a small business.)

General Business License in Illinois

Illinois, like many states, doesn't issue a statewide general business license. However, some cities might require businesses to apply for a general business license if the business will be located and operating within city limits.

For example, Chicago requires every business that operates within the city to get a City of Chicago business license. However, some occupations and professions licensed by the Illinois Department of Financial and Professional Regulation (IDFPR) are exempt from the city license requirement. So, if you plan to open a business under one of the exempt occupations, you don't need to apply for a Chicago business license.

Chicago doesn't have a single business license. You'll need to apply for a license that matches your business sector or activities. For example, daycare facilities will need to apply for a children's services facility license. The required fee will depend on the type of license you need. Your type of license might also require a zoning review, criminal background check, and onsite inspections.

Visit your city's website or contact local officials to determine whether your business operations require a license. Each city will have its own procedure and license fee. Typically, if your business will be located outside of a city in an incorporated area, you'll need to visit your county website for licensing requirements.

Professional and Occupational Licenses for Businesses and Individuals in Illinois

Your profession or occupation might require you to get special licensing or certification before you can begin practicing. Depending on the rules of your profession or occupation, you could need to get a license for yourself and for your business.

The IDFPR is the main regulatory body for professions and occupations in Illinois. Within the IDFPR, there are multiple divisions and offices with regulatory authority.

• The Division of Banking (DOB): The DOB licenses, charters, and supervises the banking industry, including state-chartered banks, ATMS, mortgage banks and mortgage loan originators, and student loan servicers.
• The Division of Financial Institutions (DFI): The DFI licenses and regulates financial institutions and services, including consumer and sales finance and collection agencies, state-chartered credit unions, currency exchanges, money transmitters, title insurance underwriters, and registered agents.
• The Division of Professional Regulation (DPR): The DPR licenses and regulates more than 100 healthcare and occupational professions in Illinois.
• The Division of Real Estate (DRE): The DRE is in charge of appraisal management companies, auctioneers and auction firms, community association management, home inspection, real estate appraisal, and real estate brokerage.
• The Cannabis Regulation Oversight Office (CROO): The CROO licenses and regulates the cannabis industry, including dispensaries, cultivation centers, infusers, transporters, patients, and caregivers.

You can find a full list of the professions and occupations the IDFPR regulates on its website.

Not all professions and occupations are covered under the IDFPR and its divisions and offices. You should check with the board, commission, or agency that regulates your profession or occupation to see which licensing requirements apply to you. If you can't find your board listed on the POL website, you can do an internet search for your board.

All Businesses Must Register With the Department of Revenue

If you do business in Illinois, you need to register with the DOR. You can register your business with the DOR by either:

• registering online through MyTax Illinois, or
• mailing in a completed Illinois Business Registration Application (Form REG-1).

Depending on the types of taxes your business will report, you might have to fill out additional schedules. For example, if you plan to collect and pay sales tax in Illinois, then you'll need to complete Schedule REG-1-L along with your registration application.

After you register, the DOR will issue a certificate of registration and taxpayer ID number for your business (if applicable).

To learn more, review the business registration webpage on the DOR website.

Local Zoning and Building Permits

In some instances, such as if you'll be constructing or renovating a space, you'll need to get special zoning and building permits. To obtain these permits, you'll usually need to fill out an application describing the work to be done and pay a fee. If your work is extensive, you might also need to submit site plans or hire a professional architect or engineer. In general, you can expect to have your space undergo inspections.

For example, Chicago requires a permit for most construction, repair, and demolition work. The type of permit you need will depend on the work you plan to do. For example, for most construction projects, you'll need a building permit. However, you might also need:

• a demolition permit
• an electrical permit
• a fire alarm system permit
• a sign permit, or
• other kinds of permits.

The City of Chicago provides a Guide to Permits, a helpful resource that walks you through the permitting process. The guide answers frequently asked questions and provides a useful chart for common permit projects. The chart can help you determine whether you need to hire a professional, get zoning approval, and submit plans.

Zoning laws. If your type of business isn't in line with the zoning code, you can find another space or potentially apply for a special use permit. A special permit can provide your business with an exception to the current use laws.

Building code. You can work with local departments and agencies to apply for building and construction permits. You'll likely need to have inspections related to your space's structural, electrical, mechanical, and plumbing features.

If you intend to lease a commercial space, make sure you have a section in the commercial lease that ensures the building and your use of the space are in line with the zoning laws.

Registering or Adopting an Assumed Name in Illinois

When doing business, you might want to use a name that's different from your legal name. Your legal name depends on your business entity. The legal name for sole proprietorships and general partnerships is the owners' real names. For corporations, limited liability companies (LLCs), and limited partnerships (LPs), the legal name is the name the company has registered with the SOS.

If you use a name that's different from your legal name, then you're using an assumed name—also known as a "fictitious name," a "trade name," or a "DBA." Under Illinois law, if you use an assumed name, then you're required to register that name. The requirements for registration depend on your business structure.

Sole proprietorships and general partnerships: Unincorporated entities must register their assumed name with the clerk of the county where they plan to do business. You must also publish notice of your assumed name after you register the name with the county clerk. The notice must be published once a week for three weeks in a newspaper in your county. You'll need to submit proof of the publication to the county clerk. (805 Ill. Comp. Stat. 405/1 (2023).) Professional service corporations must also register their assumed name with the county clerk.

Corporations, LLCs, and LPs: Incorporated entities must register their assumed names with the SOS. In general, your registration will last from the day you file with the SOS to the first day of the anniversary month of the corporation that falls within the next calendar year divisible by five. For example, suppose you file your assumed name registration on March 21, 2026. Your registration would be good until March 1, 2030. Your registration can be renewed. (805 Ill. Comp. Stat. 5/4.15, 180/1-20, and 215/108.5 (2023).)

Your filing fee will depend on your business structure and the year you file. You can file online with the SOS or complete the appropriate application for your business entity.

For additional information on state requirements, check the assumed name adoptions section of the SOS website. For information on county requirements, check the website for your county.

Other Licenses and Permits Your Business Might Need

In addition to the licenses and permits discussed above, you might be required to comply with other laws and regulations. For instance, your business might need to apply for special licensing or follow special rules related to:

• safety
• health, and
• the environment.

Sometimes these areas are encompassed within other licenses, permits, and registrations. Other times, these licenses and permits will require a separate process. If you're in a highly regulated field, you're more likely to need additional licenses and permits.

These licenses and permits can be issued by the federal or state government, or locally. The requirements vary depending on the city or county involved. You should check the websites for the city and county where you'll operate your business for more information. Some businesses might be exempt from local licensing requirements under state or federal law.

You should check with your federal, state, and local governments for more information.

Government Resources for Small Businesses in Illinois

You can find many useful government resources for your small business:

• Illinois state website: The Illinois state government website has a section on registrations, licenses, and permits. This webpage links to the various regulatory requirements that might apply to your business, including business registration, tax registration, elevator safety, liquor licenses, and air permits.
• Illinois Department of Commerce and Economic Opportunity (DCEO): The DCEO website has a wealth of information for people who want to start or manage an Illinois small business. The site includes links to an extensive step-by-step guide to starting a business as well as various other publications and business guides. The DCEO's First Stop Business Information Center gives businesses professional guidance on regulatory and permitting processes.
• Illinois Small Business Development Center (SBDC): The SBDC can provide one-on-one business advice and management assistance. They can also help you with business plans, marketing information, and financing, among other things. The Illinois SBDC is part of a national network of small business development centers. In Illinois, the SBDC also works very closely with a state government agency—the DCEO—and, unlike in other states, its website is incorporated directly into the DCEO website.
• The U.S. Small Business Administration (SBA): The SBA has two district offices in Chicago and Springfield. The office's website lists upcoming events, resources, and news for small businesses.

Getting Help With Your Illinois Small Business

This article covers only the basic licensing, permitting, and registration requirements for small businesses in Illinois. You can find more information and guidance in the many other articles in the small business section of our website. If you want to educate yourself further, you should read Legal Guide for Starting & Running a Small Business, by Fred S. Steingold, and The Small Business Start-Up Kit, by Peri Pakroo.

If you want more personalized, professional help, consider talking to an Illinois business lawyer. If possible, you should try to find an attorney with experience assisting businesses in your industry. A legal professional can help you navigate the steps to get your business license or permit at the federal, state, and local levels.