PermitDueHow to Get a Business License in Illinois
March 16, 2026 · Daniel Amar·Last updated: March 16, 2026
Illinois is straightforward — unless you are in Chicago
Filing an LLC in Illinois is fast and relatively cheap. The state does not require a general business license. But your city almost certainly does, and if that city is Chicago, you are looking at one of the most complex municipal licensing systems in the country.
Here is the full process, state through local.
Step 1: Register your business with the Secretary of State
File with the Illinois Secretary of State, Business Services Department.
- LLC: File Articles of Organization. Costs $150. File online through the Secretary of State's website.
- Corporation: File Articles of Incorporation. Costs $150.
- Sole proprietorship: No state filing required, but you need a DBA (Assumed Business Name) if operating under a name other than your own.
Online filings are processed within 1 to 3 business days. Paper filings take about a week.
Step 2: File your Assumed Business Name (DBA)
If you are a sole proprietor or partnership operating under a name other than your legal name, file an Assumed Business Name registration with your county clerk. The cost varies by county — typically $10 to $50. In Cook County, it is $25.
Step 3: Get your EIN
Free, instant, online at irs.gov.
Step 4: Register with the Illinois Department of Revenue
Register with IDOR (Illinois Department of Revenue) for your tax obligations. Apply using the REG-1 form, which you can submit online through MyTax Illinois.
- Sales tax: Illinois has a 6.25% state sales tax, and local rates push it higher (up to 10.25% in Chicago). If you sell taxable goods, you need a Retailer's Occupation Tax certificate.
- Withholding tax: If you have employees, register for state income tax withholding.
- Use tax: If you buy goods from out of state for use in Illinois, you owe use tax.
IDOR processes registrations within 4 to 6 weeks. Plan ahead.
Step 5: Get your city business license
This is where it gets city-specific. Illinois does not have a state business license, so your city or village fills the gap.
Chicago
Chicago requires a business license from the Department of Business Affairs and Consumer Protection (BACP). The process depends on your business type:
- Limited Business License: Required for most businesses that do not fall into a specialized category. Fee starts at $250 for two years.
- Regulated Business License: Required for specific industries — restaurants, bars, tobacco shops, day cares, auto repair, etc. Fees and requirements vary by type.
- Tavern license (bars): $4,400/year. One of the most expensive city-level bar licenses in the country.
- Retail Food Establishment license: $660/year for most restaurants.
Chicago also requires a zoning clearance before issuing a business license. You cannot get the license until the city confirms your location is properly zoned for your business type. This alone can take 2 to 4 weeks.
Other Illinois cities
- Springfield: Requires a business license through the city clerk. Fees are much lower than Chicago.
- Naperville: Business registration required for most businesses. Handled through the city's finance department.
- Peoria: Business license required, issued through the city's development department.
If you are outside Chicago, your city or village hall is typically the first place to check. Many smaller municipalities handle it with a single form and a modest fee.
Step 6: Industry-specific state licenses
The Illinois Department of Financial and Professional Regulation (IDFPR) licenses more than 80 professions and industries. Some common ones:
- Restaurants: Food service sanitation license plus local health department permits
- Bars: State liquor license from the Illinois Liquor Control Commission (ILCC), plus your city's liquor license
- Contractors: Roofing contractors need a state license. General contractors are licensed at the local level.
- Salons and barbers: Licensed through IDFPR
- Real estate, insurance, home inspection: All IDFPR
What it costs: Illinois business setup fees
| Item | Cost | Frequency |
|---|---|---|
| LLC filing (Secretary of State) | $150 | One-time |
| LLC annual report | $75 | Annual |
| DBA (county clerk) | $10 - $50 | Every 5 years |
| EIN (IRS) | Free | One-time |
| IDOR tax registration | Free | One-time |
| Chicago Limited Business License | $250 | Every 2 years |
| Chicago Tavern License | $4,400 | Annual |
| Chicago Restaurant License | $660 | Annual |
| Other city business license | $25 - $300 | Annual |
| IDFPR professional license | $50 - $500 | Every 1 - 4 years |
Timeline: how long does it take?
| Step | Processing Time |
|---|---|
| LLC filing (online) | 1 - 3 business days |
| EIN | Immediate (online) |
| IDOR tax registration | 4 - 6 weeks |
| Chicago business license | 2 - 6 weeks (includes zoning review) |
| Other city licenses | Same day to 2 weeks |
| ILCC liquor license | 2 - 4 months |
| IDFPR professional license | 2 - 8 weeks |
Illinois-specific gotchas
- Chicago's license system is a maze. There are dozens of license types, each with different fees, requirements, and renewal schedules. The BACP website is the best starting point, but plan to spend time figuring out exactly which license category your business falls under.
- Illinois LLC annual report is mandatory. It costs $75 and is due before the first day of your LLC's anniversary month. Late filing adds a $100 penalty. Fail to file and the Secretary of State will dissolve your LLC.
- IDOR processing is slow. The 4 to 6 week timeline for tax registration is real. If you need to collect sales tax on day one, start the IDOR registration well before your opening date.
- Chicago zoning review must happen before the license. You cannot get a Chicago business license until zoning approves your location. If there is a zoning issue, this can add weeks or months to your timeline. Check zoning before signing a lease.
- Cook County has its own layer. If you are in Cook County (which includes Chicago and many suburbs), there may be county-level permits on top of your city and state requirements.
What happens if you operate without a license
- Chicago can fine unlicensed businesses $200 to $500 per day
- Secretary of State dissolution for not filing annual reports
- IDOR penalties for not registering for taxes (back taxes + interest + penalties)
- IDFPR can issue cease-and-desist orders for unlicensed professional practice
Get your Illinois permits sorted
Illinois is not the hardest state to deal with — unless you are in Chicago, where the licensing is genuinely complex. Either way, the steps are clear: register with the state, get your tax IDs, get your city license, and handle any industry-specific permits.
Run the free permit checker to see every permit your business needs based on your Illinois location and business type. It takes two minutes and saves you from having to piece it together yourself.
Opening a restaurant or bar in Chicago? Those guides cover the food and alcohol layers in more detail.