The Complete Guide to Illinois Business Licenses
"Do I need a business license in Illinois?" is one of the most common questions new owners ask. The short answer: Illinois has no single statewide license, but your business almost certainly needs some combination of local, tax and industry licenses before it opens. Getting them right protects you from fines and lets you open bank accounts, sign leases and work with suppliers.
Does Illinois Require a State Business License?
No. The State of Illinois does not issue a general business license that every company must hold. Forming an LLC or corporation with the Illinois Secretary of State registers your business entity, but it is not a license to operate. Licensing in Illinois happens at three other levels: local government, state tax registration and industry-specific state licenses.
City and County Business Licenses
Many Illinois cities and villages require a general business license. Chicago, for example, issues business licenses through its Department of Business Affairs and Consumer Protection (BACP), and the license type depends on your activity. Other cities, such as Aurora, Naperville, Rockford and Springfield, set their own rules, and businesses in unincorporated areas may deal with the county instead.
Before you sign a lease, also check zoning. Your city must allow your type of business at that address, and home-based businesses often need a home occupation permit.
Illinois Sales Tax Registration (REG-1)
If you sell taxable goods in Illinois, you must register with the Illinois Department of Revenue before you start selling. Registration is done online through MyTax Illinois (or on Form REG-1) and gives you an Illinois Business Registration certificate and account number. You use it to collect and file sales tax, and suppliers will ask for it before selling to you tax-free for resale. Learn more in our guide to resale certificates.
The same registration covers state income tax withholding if you have employees. Employers also register with the Illinois Department of Employment Security (IDES) for unemployment insurance.
Professional and Occupational Licenses
The Illinois Department of Financial and Professional Regulation (IDFPR) licenses a long list of professions, including roofers, barbers and cosmetologists, nurses, real estate brokers, accountants and many healthcare roles. Other agencies regulate specific industries, such as the Illinois Liquor Control Commission for alcohol sales and local health departments for food businesses. If your work is regulated, you must hold the license before you offer the service.
Business Licenses for Illinois LLCs
An LLC still needs the same licenses as any other business. The usual order is: form your LLC, get your EIN, register for Illinois taxes, then apply for local and industry licenses in the LLC's name. Forming the LLC first means every license is issued to your company, not to you personally. Read the Illinois LLC guide for formation costs and steps.
How Incofile Helps
Incofile can form your Illinois LLC, get your EIN and research every license and permit your business needs at the city, county, state and federal level. You receive a clear report with each license, the agency that issues it and how to apply, delivered to your 24/7 client portal. See our business license research service, or read do I need a business license for the basics.
Frequently Asked Questions
Do I need a business license in Illinois?
Illinois has no general statewide business license, but most businesses need a local license from their city or county, a state tax registration if they sell goods or have employees, and any license their industry requires.
How do I get a business license in Illinois?
Form your business entity, check with your city or county clerk for local licenses, register with the Illinois Department of Revenue through MyTax Illinois, and apply for any professional license your work requires.
How much does an Illinois business license cost?
Costs depend on your city and license type. Illinois tax registration through MyTax Illinois is free, while local business licenses and professional licenses each have their own fees.
Do I need a business license to sell online in Illinois?
Online sellers usually do not need a city storefront license, but if you sell taxable goods to Illinois customers you generally need to register with the Illinois Department of Revenue to collect sales tax.
Does an Illinois LLC need a business license?
Yes. Forming an LLC registers your company, but it is not a license to operate. Your LLC still needs the local, tax and industry licenses that apply to its business.
Do I need a license for a home-based business in Illinois?
Often, yes. Many Illinois cities require a business license or home occupation permit for home-based businesses, even when no customers visit.