Searching for an "Illinois business license" usually leads to confusion, because Illinois does not issue a general state business licence. Instead, most businesses need a combination of three things: a state tax registration, a city or village business licence (Chicago has its own system), and any professional or industry licence for regulated work. This guide walks through each one for a new Illinois LLC.
Step 1: Form the LLC first
Licences are issued to a business, so form the company before you apply. An Illinois LLC is filed with the Secretary of State for $150 (expedited service is available for an extra state fee) — see our Illinois LLC guide. Once it is approved, get your EIN from the IRS; most licence applications ask for it.
Step 2: Register with the Illinois Department of Revenue
Almost every Illinois business registers with the Department of Revenue through MyTax Illinois (the online version of Form REG-1). Registration is free and gives you an Illinois account for:
- Sales tax (Illinois calls it Retailers' Occupation Tax) if you sell goods or certain services — you receive a Certificate of Registration to display at your business.
- Withholding tax if you have employees.
- Other taxes depending on your activity, such as hotel, liquor or motor fuel taxes.
If you hire staff you also register with the Illinois Department of Employment Security for unemployment insurance. None of these is a "licence" in name, but you cannot legally sell taxable goods without the registration.
Step 3: City or village business licence
This is where the real "business licence" lives in Illinois. Requirements are set locally:
- Chicago licenses most businesses through the Department of Business Affairs and Consumer Protection (see below).
- Some cities require a business registration rather than a licence — Aurora and Joliet, for example, register every business with premises in the city (home-based businesses are exempt), at little or no cost.
- Many municipalities have no general licence at all — Rockford, Springfield and Naperville, for instance, only license specific activities such as liquor, tobacco, contractors or food service.
- Unincorporated areas may fall under county rules instead.
The only reliable approach is to check the website of the city or village where your business is physically located, or call its clerk's office. Fees for a general local licence are usually modest.
Chicago business licences
If your business is in Chicago, the Department of Business Affairs and Consumer Protection (BACP) issues the licence, and you must hold it before you open. The main categories:
- Limited Business License — the general licence for businesses that do not fall into a regulated category (offices, consultancies, most retail, many services). It costs $250 and runs for two years.
- Regulated Business License — for activities the city regulates more closely, such as home repair and construction services or motor vehicle repair and services. Food establishments, liquor, tobacco, children's services and public places of amusement have their own dedicated licence types, each with its own requirements, fee and term (a tobacco licence, for example, runs one year rather than two).
- Home Occupation License — for businesses run from a Chicago residence ($250 for two years), with limits on visitors, employees, signage and storage.
Applications go through the city's online licensing portal or in person at City Hall. Expect to provide your LLC documents and state file number, EIN, Illinois Department of Revenue account ID, a business address and photo ID; most premises also go through zoning review and, for some categories, inspections before the licence is issued.
Step 4: Professional and industry licences
Regulated occupations are licensed at state level regardless of city, mainly by the Illinois Department of Financial and Professional Regulation (IDFPR): accountants, real estate brokers, cosmetologists and barbers, nurses and other health professionals, roofing contractors, private security and many more. Other agencies handle their own areas — for example the Illinois Liquor Control Commission for alcohol, local health departments for food service, and the Illinois Department of Agriculture for certain food products. If your trade needs a licence, the licence belongs to the qualified person or the business, not to the LLC filing itself.
Home-based and online businesses
Running an online store or consultancy from home does not exempt you from tax registration: you still need the Department of Revenue account if you sell taxable goods. Local rules vary — Chicago requires a Home Occupation License, while many suburbs exempt home-based businesses from registration or only ask for zoning compliance, so check your own municipality. Non-Illinois residents who form an Illinois LLC but operate elsewhere generally need the licences of the place where they actually work, not Illinois.
Checklist and costs
- Form your Illinois LLC — $150 state fee (details).
- Get your EIN — free from the IRS.
- Register on MyTax Illinois — free.
- Get your city or village business licence — Chicago through BACP; elsewhere check your municipality. Fees vary by place and category.
- Obtain any IDFPR or agency licence for your profession or industry.
- Diary the renewals — city licences and professional licences renew on their own cycles.
Not sure which licences apply to you? Our business licence research service identifies every federal, state, county and city licence and permit your Illinois LLC needs, with the forms and fees. Or start with the LLC: form your Illinois LLC now.
General information, not legal advice. Licence requirements and fees are set by each city, county, state agency and change over time — confirm with the issuing office before you apply. September 2026.