Registering a Business in Illinois: Filings, Permits, Taxes

Illinois spreads the work of starting a business across several agencies, and the order matters less than knowing which office handles which piece. This article covers entity formation, business names, tax registration, licensing, employer obligations, and the annual filings that keep a company in good standing. It does not cover industry-specific regulation, zoning, or federal obligations beyond the employer identification number.

What registering a business in Illinois involves

There is no single application. A person starting a business in Illinois deals with the Secretary of State for entity paperwork, the Department of Revenue for taxes, the Department of Employment Security for unemployment insurance, and a county clerk or municipal office for names and local permits. Each office has its own deadlines, and nothing one office does satisfies another.

A few terms recur across all of them.

Entity means the legal form the business takes: sole proprietorship, general partnership, limited liability company, or corporation. Sole proprietorships and general partnerships come into existence without any state filing. LLCs and corporations exist only after the Secretary of State accepts a formation document.

Registered agent is the person or company designated to receive lawsuits and official notices on the business’s behalf. 805 ILCS 180/1-35 requires every Illinois LLC and every foreign LLC admitted here to continuously maintain a registered agent and a registered office in the state, and the agent must be an Illinois resident or an entity authorized to do business here.

Assumed name is any name a business operates under that is not its legal name. Illinois handles assumed names in two different places depending on the entity type, which is the source of a lot of confusion.

Anniversary month is the month the entity was formed. It sets the annual report deadline for the life of the company.

Good standing describes an entity that is current on its annual reports and fees. A company that falls behind loses good standing, and eventually administrative dissolution follows.

Choosing a structure and making the first filing

Sole proprietorships and general partnerships require no Secretary of State filing at all. The owner reports business income on a personal return and carries personal liability for business debts. This is the cheapest structure to start and the most exposed.

An LLC starts with Articles of Organization filed with the Secretary of State. Under 805 ILCS 180/50-10, the filing fee is $150 as of 2026. The same section sets the fee at $400 for an LLC formed with a series, or with the ability to establish one, a structure used mainly by real estate holders who want each property walled off from the others. Filing happens online through the Secretary of State’s limited liability company services or on paper.

A corporation starts with Articles of Incorporation. 805 ILCS 5/15.10 sets that fee at $150 as well, with amendments at $50 and a restatement at $150. Corporations also owe franchise tax calculated on paid-in capital, which LLCs do not, and the calculation is separate from the filing fee.

Both LLCs and corporations pay $25 to change a registered agent or registered office address later, under the same two fee sections. That fee catches people who use a home address at formation and move.

A federal employer identification number is free and takes minutes. The IRS issues it immediately through its online EIN application, and the agency warns that no one has to pay a fee for one. Multi-member LLCs, corporations, and any business with employees need an EIN. A single-member LLC with no employees can often use the owner’s Social Security number, though banks frequently ask for an EIN anyway.

Business names and assumed names

The rule that trips up most new Illinois businesses is that assumed names are filed in two different places.

A sole proprietor or general partnership operating under anything other than the owners’ real names files an assumed name certificate with the county clerk where the business operates. 805 ILCS 405/1 also requires publication: notice of the filing runs once a week for three consecutive weeks in a newspaper of general circulation in that county, the first publication within 15 days after the certificate is filed, and proof of publication goes to the county clerk within 50 days of filing. Without that proof, the registration is void.

An LLC or corporation operating under a second name files with the Secretary of State instead, and the fee runs on a five-year cycle tied to the calendar. Under 805 ILCS 180/50-10(b)(9), an LLC assumed name costs $150 for each year or part of a year ending in 0 or 5, $120 for years ending in 1 or 6, $90 for years ending in 2 or 7, $60 for years ending in 3 or 8, and $30 for years ending in 4 or 9, with renewal at $150. Corporations follow an identical schedule under 805 ILCS 5/15.10(q). The effect is that registering an assumed name early in the cycle costs more, because the fee covers more remaining years.

Illinois also lets a business reserve a name before forming. Reservation costs $25 for an LLC and $25 for a corporation under the same two fee sections, 805 ILCS 180/50-10 and 805 ILCS 5/15.10, and holds the name while the formation documents are prepared.

Registering with the Illinois Department of Revenue

Any business selling goods, providing taxable services, or withholding Illinois income tax from employees registers with the Illinois Department of Revenue. Registration happens through MyTax Illinois or on Form REG-1. The department’s business registration page states that registration must be completed before the business makes any purchases, makes any sales, or hires an employee, and that a mailed Form REG-1 takes 6 to 8 weeks to process. Online registration is considerably faster.

What comes back is a Certificate of Registration and an Illinois account ID. Retailers often call this the seller’s permit or sales tax permit; the state’s own term is the Certificate of Registration. The department no longer mails paper certificates for most tax types, including Retailers’ Occupation Tax, Use Tax, and Service Occupation Tax. Those certificates are issued electronically and retrieved from the MyTax Illinois account.

Illinois sales tax is not a single tax. The department’s sales and use tax reference lists four separate acts that can apply to one transaction: the Retailers’ Occupation Tax (35 ILCS 120), the Use Tax (35 ILCS 105), the Service Occupation Tax (35 ILCS 115), and the Service Use Tax (35 ILCS 110). Which combination applies depends on whether the business sells tangible goods, transfers goods as part of a service, or ships from outside Illinois. Registration covers the tax types identified on the application, so a business that later adds a taxable line updates its registration rather than filing a new one.

Licenses and permits

Illinois does not issue a general statewide business license. There is no single permit that authorizes operating a business, which is why the search for an “Illinois business license” so often dead-ends. Licensing instead comes from three directions.

Profession and industry licensing is handled by the state agency that regulates the field. Contractors, cosmetologists, accountants, real estate brokers, and dozens of other occupations are licensed through the Department of Financial and Professional Regulation. Liquor, gaming, cannabis, and childcare each have their own regulator, and those licenses typically require the entity to exist and be in good standing before the application is accepted.

Municipal and county licensing is where most ordinary businesses encounter a license requirement. Chicago licenses nearly every business operating within city limits, and many suburbs and downstate municipalities do the same. Home-based businesses frequently need a zoning determination or home occupation permit even when no license applies. These requirements are set by ordinance, vary between neighboring towns, and are not searchable from any single state database.

Tax registration functions as a permit for retailers. The Certificate of Registration described above is what a supplier asks to see before selling goods for resale without charging tax, and what the state expects to be on file before a retailer makes its first sale.

The practical order most businesses follow is entity first, tax registration second, then the local license, because municipal applications usually ask for both the entity number and the Illinois tax account number.

Hiring employees in Illinois

Three obligations attach as soon as a business has its first employee.

Unemployment insurance. 820 ILCS 405/205 makes an employing unit an “employer” for unemployment insurance purposes once it pays wages of at least $1,500 in any calendar quarter in the current or preceding year, or has at least one employee on some portion of a day in each of 20 or more calendar weeks in the current or preceding year. Agricultural and domestic employers have separate thresholds in the same section. Registration and quarterly contribution and wage reporting run through the Department of Employment Security’s employer resources, which now routes employer accounts through MyTax Illinois.

Income tax withholding. Illinois withholding is registered with the Department of Revenue on the same Form REG-1 or MyTax Illinois registration used for sales tax. An existing registrant adds withholding as a tax responsibility rather than registering again.

Workers’ compensation. 820 ILCS 305/4 requires covered employers to insure their entire workers’ compensation liability with an authorized carrier, qualify as an approved self-insurer, or otherwise secure payment to the Commission’s satisfaction. The enforcement provisions are unusually sharp: a knowing failure to provide coverage is a Class 4 felony, a negligent failure is a Class A misdemeanor, each day counts as a separate offense, and a Department of Insurance investigator can issue a citation carrying a fine of no less than $500.

Employee classification sits underneath all three. A worker treated as an independent contractor generates no unemployment contributions, no withholding, and no workers’ compensation premium, which is why misclassification is a recurring enforcement priority for both the Department of Employment Security and the Workers’ Compensation Commission.

Annual reports and good standing

The recurring state obligation for an LLC or corporation is the annual report.

For an LLC, 805 ILCS 180/50-1 requires the report, with fees, to be delivered to the Secretary of State within the 60 days immediately preceding the first day of the company’s anniversary month. The report lists the LLC’s name, registered office and agent, principal place of business, and its managers or managing members. The fee is $75 under 805 ILCS 180/50-10(b)(11), plus $50 for each series with a certificate of designation in effect, plus a penalty if the report is delinquent. A report the Secretary of State returns for corrections avoids the late penalty if the corrected version comes back within 60 days of the original due date.

For a corporation, the annual report fee is also $75 under 805 ILCS 5/15.10(o), and it is filed alongside the franchise tax calculation.

Falling behind has a defined cost. Reinstatement after administrative dissolution runs $200 for an LLC under 805 ILCS 180/50-10(b)(12) and $200 for a corporation under 805 ILCS 5/15.10(p), on top of the delinquent reports and penalties.

Good standing is not only a formality. Lenders, landlords, licensing agencies, and counterparties commonly ask for a Certificate of Good Standing before closing, and the Secretary of State will not issue one to an entity with an outstanding annual report.

Specific procedures and topics