Starting a Business in Chicago — 13-Step Checklist

LLC, S-Corp, C-Corp, sole proprietorship, or partnership. LLCs are most common for small businesses — they offer liability protection without C-Corp complexity. Consult an accountant before choosing.

File your business formation documents with the Illinois Secretary of State. LLC filing fees vary by state ($50-500). Most states allow online filing.

Apply for a free Employer Identification Number at irs.gov. You need this before opening a business bank account. Takes 5 minutes online — you get your EIN immediately.

Keep business and personal finances separate. Bring: EIN confirmation letter, articles of organization/incorporation, operating agreement, and government-issued ID. Most banks require an appointment.

Most Chicago businesses need a local business license or permit. Check the Chicago city clerk or business licensing office. Fees vary by business type ($50-500+). Some businesses need state licenses too.

Register with Illinois's Department of Revenue for state income tax withholding, sales tax collection (if applicable), and unemployment insurance. Chicago may have additional city business taxes.

Depending on your business type in Chicago: health permits (food), building permits (construction), home occupation permits (home-based business), signage permits, fire safety permits. Check with Chicago's permit office.

At minimum: general liability ($500K-1M), professional liability if service-based, workers' comp if you have employees. Get 3 quotes. Budget $50-200/month for a small business.

Choose: QuickBooks Online ($30/month), Wave (free), or FreshBooks ($17/month). Set up from day one — reconstructing a year of transactions at tax time is painful and expensive.

Claim your Google Business Profile (free). Set up a basic website. Register social media handles. For local businesses, Google Business Profile is more important than your website for being found.

Find a CPA in Chicago who works with businesses like yours. They'll save you money on your first tax return and advise on quarterly estimated payments. Ask other local business owners for referrals.

The Chicago Chamber of Commerce offers networking, referrals, and visibility. Membership typically runs $200-500/year for small businesses. Many also offer free business workshops.

If you expect to owe $1,000+ in taxes, you must make quarterly estimated payments (April 15, June 15, September 15, January 15). Underpayment penalties add up. Your CPA can calculate amounts.