Starting a Business in Chicago: A Legal Checklist for Entrepreneurs

Starting a business in Chicago, Illinois is an exciting step — but turning your entrepreneurial dream into a legally sound reality requires careful planning and compliance with both state and local regulations. At Wendy Calvert Law Office, P.C., we help entrepreneurs in Chicago navigate the legal complexities of business formation so you can focus on growth with confidence.

Whether you're launching a tech startup, opening a boutique in Bronzeville, or starting a consulting firm in The Loop, here's your legal checklist to start a business in Chicago the right way.

✅ 1. Choose the Right Business Structure

The first step in forming a business in Illinois is deciding how your company will be legally structured. Each structure has distinct legal, tax, and liability implications:

• Sole Proprietorship – Simplest form, but offers no liability protection.

• Limited Liability Company (LLC) – Popular in Illinois for small businesses due to liability protection and tax flexibility.

• Corporation (C-Corp or S-Corp) – Ideal for businesses seeking investment or planning to scale.

• Partnerships – Suitable for businesses with multiple owners, but legal agreements are crucial.

Chicago Tip: Many entrepreneurs in Chicago choose an LLC for its balance of simplicity and protection. Our firm can help you file Articles of Organization and draft a solid Operating Agreement, required in Illinois.

📄 2. Register Your Business with the State of Illinois

All businesses operating in Illinois must register with the Illinois Secretary of State. The required filings depend on your business type:

• LLCs and Corporations must file formal formation documents.

• DBA (“Doing Business As”) names must be registered if you plan to operate under a name other than your legal one.

Use the CyberDrive Illinois portal for state-level filings, or consult us to streamline the process and ensure accuracy.

🏙️ 3. Obtain a Chicago Business License

The City of Chicago requires nearly all businesses to have a business license. License types vary based on your activity — e.g., retail, professional services, or food establishments.

• Apply through the Chicago Department of Business Affairs and Consumer Protection (BACP).

• Many small businesses qualify for the Limited Business License.

• Some industries (like construction or childcare) require special licenses or inspections.

Local Insight: Businesses operating in a physical space must comply with zoning requirements. Our firm conducts zoning reviews to prevent costly delays in your launch.

🧾 4. Register for Tax IDs and Permits

Federal Requirements:

• Obtain an Employer Identification Number (EIN) from the IRS — required for hiring employees, opening a business bank account, and filing taxes.

Illinois State Requirements:

• Register with the Illinois Department of Revenue (IDOR) for sales tax, use tax, and employee withholding taxes.

If you sell goods or services, you’ll likely need a Sales Tax Permit (ST-1 form).

📚 5. Draft Legal Documents and Contracts

To protect your business interests from day one, work with an attorney to prepare:

• Operating Agreements (LLCs)

• Partnership Agreements

• Service Contracts

• Employment Agreements

• Non-Disclosure Agreements (NDAs)

Legal Tip: Strong foundational documents help avoid disputes and provide clarity as your business grows.

🛡️ 6. Ensure Local Compliance and Insurance

• Comply with local labor laws, including Chicago’s minimum wage and paid sick leave ordinances.

• Consider General Liability Insurance and Professional Liability Insurance, especially if working directly with clients or customers.

Not sure what insurance coverage you need? Our firm can refer you to trusted providers and ensure you're meeting legal minimums.

📈 Let Wendy Calvert Law Office, P.C. Help You Launch Legally and Successfully

Starting a business in Chicago is about more than just having a great idea — it's about protecting your assets, complying with city and state regulations, and building a legally sound foundation for growth.

At Wendy Calvert Law Office, P.C., we specialize in helping Chicago entrepreneurs and small businesses form LLCs, register corporations, draft contracts, and secure the licenses needed to operate confidently.