As a Chicago answering service, we work with a lot of small businesses. One thing that we hear from a lot of the business owners is that it is a complicated process to get a business started in the city of Chicago. To help out any aspiring small business owners, we have put together a step-by-step guide detailing what you will need to do to start a business in the city of Chicago.

Starting a Business in Chicago – Step By Step Guide

So you’ve decided that you want to start a small business in Chicago. You know what you want to sell, where you want it to be, you probably have an idea of a logo and a tagline – but what do you actually have to do to start the business. There are several things that you will have to do legally in order to start your business the right way. We break them down for you here and give you the resources that you need to get your Chicago business started off on the right foot.

Step 1 – Choose Your Business Entity
You have several choices, and you really need to talk with your CPA and a business attorney to make sure that you choose the right entity for your situation. You can run a business as a sole proprietorship, a general partnership, a limited partnership, a limited liability company, an S corporation, a C corporation (and there are a few others as well). Each entity type will have advantages and disadvantages, so your unique situation will help to determine what you should choose.


Step 2 – Register With The IRS
Your Chicago business will need an EIN number (Employer Identification Number) from the IRS. This is often referred to as Federal Tax ID Number. To register your business you can go to the IRS website or go in person to the office at 230 S. Dearborn, in Chicago.


Step 3 – Register With IDOR
If you have a business in Illinois, you must register with the Illinois Department of Revenue (formally Illinois Business Tax Number). This applies to all business entity types no matter what type of business you conduct (wholesale, retail, services, manufacturing, etc.). To apply for your IDOR Account ID you can visit their website, print form REG-1 and mail it to the address on the form, by calling 800-356-6302, or by visiting the Chicago Office at 100 W. Randolph, in Chicago.


Step 4 – Get a Chicago Business License
If you want to start a business in Chicago, you will need a business license. There are a few businesses exempted by state law (check with your lawyer, but it probably does not include you) but for everyone else, a business license is required. You can apply online by clicking here (simplest way) or you can go into the Small Business Center at 121 N. LaSalle, Room 800, in Chicago. It is possible to walk in, but if you value your time, an appointment is highly recommended. You can make an appointment by calling 312-74-GOBIZ.

In order to apply for a business license, you will need to complete a Business Information Sheet. Just to make things a bit easier for you, we have listed the information that you will need in order to fill out the sheet.

  • The business name and ownership information
  • The business location address
  • Square footage of the business location
  • A detailed description of the business activity
  • Identification (i.e. valid driver’s license, voters registration card,
    state ID card or another government-issued photo ID)

If applicable:

  • State of Illinois File Number
  • Federal Employer Identification Number (EIN)
  • Illinois Department of Revenue Account ID Number

How to Start a Business in Chicago in 4 Easy Steps

  • Choose a Business Entity
  • Register with the IRS to get an EIN Number
  • Register with the IDOR to get an account number
  • Get a Chicago business license