---
title: What are the legal steps for starting a small business in Illinois?
description: Looking to start a small business in Illinois? Legal Faqs has you covered with a comprehensive guide to the legal steps you need to take. From choosing a business structure to registering with the state, we'll help you get your business up and running smoothly.
image: https://www.legalfaq.ai/hubfs/LegalFAQ/illinois-legal-faqs.jpg
---

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 April 16, 2023

# What are the legal steps for starting a small business in Illinois?

![Picture of Chris Battis](https://www.legalfaq.ai/hs-fs/hubfs/battis-mug.jpg?width=50&name=battis-mug.jpg) By  [Chris Battis](https://www.legalfaq.ai/faqs/author/chris-battis)  ·   1 minute read

# Starting a Small Business in Illinois: Legal Steps and Requirements

Starting a small business in Illinois entails several legal requirements and steps that a prospective business owner needs to comply with. Some of these legal steps and requirements include:

1. **Choosing a Business Structure:** It is essential to select a business structure that suits the needs of the business owner. The most common business structures in Illinois include sole proprietorship, partnership, limited liability company (LLC), S corporation, and C corporation. Each structure has its advantages and disadvantages, and a business owner should consider the legal and tax implications of each structure before choosing one.
2. **Registering a Business:** Business registration involves obtaining the necessary licenses and permits to operate in Illinois. Depending on the type of business, a business owner may need to acquire various state and local permits, such as zoning permits, building permits, and health department permits.
3. **Obtaining a Tax Identification Number:** A business owner must obtain a Federal Employer Identification Number (FEIN) from the Internal Revenue Service (IRS). The FEIN is necessary for filing taxes, opening bank accounts, and hiring employees.
4. **Paying Taxes:** Small businesses in Illinois are subject to various state and federal taxes, such as income tax, sales tax, and payroll tax. Illinois has a flat income tax rate of 4.95% for individuals and 7% corporate tax rate for corporations.
5. **Hiring Employees:** If a small business is planning to hire employees, it must comply with federal and state labor laws, such as minimum wage requirements, worker's compensation insurance, and employment discrimination laws.
6. **Protecting Intellectual Property:** Intellectual property, such as trademarks and copyrights, is valuable to a small business. Therefore, it is essential to protect these assets and ensure that they aren't infringed upon by others.
7. **Complying with Industry Regulations:** Depending on the nature of the business, small business owners may need to comply with industry-specific regulations or standards.

Finally, small business owners in Illinois should consult with a licensed attorney to ensure that they comply with all legal requirements and regulations applicable to their business.

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