Registration of a new business does not necessarily mean that you have got the “go ahead” to operate your business in the state of Illinois. Most often than not, business owners forget to include the “requirement of a business license” in their starting a new business checklist. It is recommended that business owners have all necessary information about licensing prior to registration of their business entity. It is important to know if your business requires a license or permit because if you are operating without one, you can be charged heavy penalties and in some cases, closure of your business.

How to Get a Business License in Illinois

Where and how do you apply for a business license in Illinois? Does your business require a license or a permit? Does the business entity require a single license or multiple licenses or permits? Who is the issuing authority for these licenses or permits? The only way to answer these questions is by understanding the process of business licensing.

There are two steps towards acquiring a business license in the state of Illinois and they are:

The Industry or Business Type

Which industry is your business entity a part of? It is important to identify the industry as some businesses may require a business license while others may require only a permit to become operational. On the other hand, some businesses may also require multiple licenses or a license and a permit. Let’s look at an example to understand this well.

HOSPITAL/NURSING HOME

If you are planning to establish a “Hospital” or a “Nursing home” in Illinois then you will require a business license. This is apart from the fact that your hospital or nursing home will need to be inspected, regulated, and certified by private and public agencies at the federal as well as state level. The agencies responsible for regulation, certification and licensing include the U.S. Department of Health and Human Services’, Illinois Department of Public Health (IDPH) and Health Care Financing Administration (HCFA).

Another important aspect to consider is whether your Illinois company license will be issued directly by the state authorities or you will need to acquire a license or a permit from city council as well. Let’s look at an example to understand this well.

If you are planning to establish a “Wholesale Drug Distribution” business in Chicago then you will not require a Chicago business license as this type of license will be issued directly by a state department, and in this case by Illinois Department of Financial & Professional Regulation (IDFPR). On the other hand, if you were to establish a “Manufacturing” business that focuses on mechanical and/or chemical processing then your license will be issued by a Chicago Small Business Center or other City agencies.

Who Issues the License?

Once you have identified the type of Illinois company license you require, the next step is to file the application for the appropriate license. The license or business permit pertaining to your business is dependent on the type of business and will be issued by either the state licensing agency or city licensing agencies.

In order to understand this process, let’s look at another example.

Business license in Illinois is issued by the Illinois Department of Financial & Professional Regulation (IDFPR). So, if you were to establish a Real Estate firm then you will be required to apply to the Division of Real Estate (DRE) for the required license. The license needs to be renewed each year within 90 days preceding the expiration date.

CITY OF ROCKFORD

Now, if you are planning to establish a business in the city of Rockford and cater to the amusement industry then you will require a license for same. You will have to file an Illinois company license application with the Rockford City Council along with the prescribed fee. The fee for the license will vary according to the type of amusement. For example, a Bowling Alley License fee will be ‘Number of Bowling Lanes x $17.’ The license fee for a skating rink will be $138.00 and if you are planning to start a Video Game Parlor then you will only require a ‘Video Gaming Permit’ and the fee would be ‘Total Number of Machines/Devices X $25.00.’

Have you identified the industry or the city you are planning to establish your business in?

If you have any questions regarding registration of your business, feel free to call us on 702-871-8678.

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Why should you register a new business in Illinois? The state is home to some of the largest and renowned companies in the world like Walgreens Boots Alliance, Caterpillar Inc., McDonald’s, Allstate Insurance Company, Archer Daniels Midland, Abbott Laboratories, and Boeing among others. It is a favored destination for almost 1.2 million small businesses that have been responsible for providing 68,276 net new jobs. The annual growth rate for Illinois economy is 3.5% and the state offers a variety of extremely competitive incentives for businesses that are registered here.

Business Growth Incentive for New Businesses

As one of the top registered agents in the state, we can help you register a new business in Illinois as this will ensure you are able to leverage all types of business gains and state provided incentives and grants. Let’s take a quick look at why Illinois is the right destination for establishing a business:

Advantage#1: The benefits of Incorporation or LLC formation

Corporation

• Perpetual Existence: A startup company in Illinois registered as a Corporation will enjoy perpetual life. This means that the incapacitation or death of a stockholder will not have a negative impact on the business operations.
• Limited Liability: As an owner of an Illinois Corporation, you will be able to enjoy limited liability protection for corporation’s debts or any judgments made against the corporation.
• Pass through taxation: If you register a new company in Illinois as an S corporation then the corporation or firm will not pay any income tax. Instead, the income or loss of the corporation will be passed on to the stockholders.

LLC

• Limited Liability: As an owner of an Illinois LLC, you will be able to enjoy limited liability protection quite similar to what a corporation enjoys.
• Flexible Profit Distribution: A startup company in Illinois LLC has the benefit of being able to select different ways of distribution of profits unlike a partnership where the distribution is 50-50.
• No Minutes of meetings: An LLC startup company in Illinois will not be required to maintain any minutes of the meetings or resolutions.

Advantage#2: Beneficial Programs for Illinois Businesses

The state of Illinois and the Illinois Department of Commerce and Economic Opportunity (DCEO) provides a wide range of incentives, grant programs, access to loans, and State Tax Incentives to small and medium sized businesses. If you register a new company in Illinois, some of the programs that you can benefit from include:

• Participation Loan Program: A startup company in Illinois can benefit from this program as the Illinois Department of Commerce and Economic Opportunity (DCEO) participates with lenders to enable loan access to new businesses. The loan amount varies from a minimum of $10,000 to a maximum of $750,000.
• Illinois Enterprise Zone Program: This is quite a beneficial program if you register a new business in Illinois enterprise zone. Your business would be eligible for state and local tax incentives under this program including sales tax exemption on Manufacturing Machinery and Equipment. Click here to see Illinois Enterprise Zones.
• River Edge Redevelopment Zone Program (RERZ): This program focuses on providing benefits to businesses that are established in environmentally challenged properties especially those adjacent to rivers in state. You can benefit from several incentives under this program including Building Materials Sales Tax Exemption and Property Tax Abatement.

Are there any Disadvantages of Incorporating in Illinois?

Are you wondering if there are any disadvantages of starting a business in Illinois? The disadvantages are very few and almost inconsequential. For instance, the time taken for registration of a corporation is longer compared to a partnership. Also the fee for foreign LLC’s and corporations is higher than that of domestic business entities. The truth is that the advantages of doing business in this state are much more and will enable your business achieve its intended growth.

Click here to REGISTER today!

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Business Information & Rankings

• Illinois ranks 7th largest tech economy in the nation. (Cyberstates, 2005)
• Illinois ranks 1st in States for Biotech Growth (Laboratories of Innovation: State Bioscience Initiatives, 2004)
• Illinois ranks 4th for “insourcing,” or bringing in jobs to the state from foreign-headquartered international firms (Organization for International Investment, 2004)
• Illinois ranks 5th in the number of privately-held, 50% or more women-owned firms in 2004, 4th in employment, and 5th in sales. (Center for Women?s Business Research)

Cost of living

Crime Rate

Illinois has the 23rd lowest crime ranking in the U.S. (F.B.I., 2004)

Fees & Taxes

Business Inventory Tax
Business inventory is exempt.

Corporate Income Tax
Rate: 4.8%. An additional personal property replacement tax is imposed on corporations at the rate of 2.5% of taxpayer’s net income.

Personal Income Tax
Rate: 3% of net income

Personal Property Tax
Exempt.

State Sales and Use Tax
Base Rate: 6.25%
Machinery Rate: none

There is an exemption for sales of machinery and equipment, including maintenance and repair machinery, for use primarily in manufacturing or assembling tangible personal property for sale or lease.

Unemployment Insurance
The new employers’ rate in Illinois is 4.7% for 3 years.

Once your company is set up, you will need:

1. Tax ID (EIN) – free over the Internet or phone.
2. Yearly Requirements and Fees for Ohio companies – Statement of Information is an initial statement of officers or member/managers that must be filed with the Ohio Secretary of State within 90 days after filing original articles, and every year thereafter in the applicable filing period. For LLCs there is an addition Franchise Tax that is $800 per year. The first payment must be made within 3 months of your LLC.
3. Company Minutes & Stock Certificates – are included in incorporation. You will have access to documents generated on your client account.

Ohio additional services

• Registered Agent
• Annual Report
• EIN (Tax ID)
• More Additional Services

• Why Ohio?
• Ohio Registered Agent
• Ohio Annual Requirements
• Ohio Corporation Statutes: Ohio Statutes, Title 17, Corporations – Partnerships

• Why Ohio?
• Ohio Registered Agent
• Ohio Annual Requirements
• Ohio LLC Statutes: Ohio Statutes, Title 17, Chapter 1705 (LLC)