Checklist for starting a business in Illinois

While every business has its own unique needs, there are certain basic steps that almost every new business startup needs to take to get started. This checklist will help you plan your business startup activities on a step-by-step basis.

Write a business plan

Creating a business plan should be the first step you take. Write down your goal for the new business and each of the key objectives you need to accomplish to reach that goal. We have listed some tools and resources that will help you prepare your business plan.

Your Business Name

Finance your business

Starting any business requires money. How much money have you set aside from your own funds? What other sources of funds are available? If you're thinking of a bank loan, most new businesses must rely on the credit worthiness of the business owner. Other potential sources include government-backed loans and grants. Some business startups rely on loans from family and friends. In other cases, angel investors can be a source of funds. Whatever your source, before you make commitments that you can't keep, you need to make sure that you have adequate capital to implement your business plan.

Select a name for your business

Selecting a good business name is a critical step for any new business. The name you give your startup should be easy to remember, easy to spell and should convey the proper image for your business. It is also important that your name not infringe on a trademark of another business. The trademark owner could require that you change your name after you have started building your brand and might be able to collect money damages for your infringement.

Determine the legal structure of your business

Discuss with your attorney how your business should be structured. For most businesses, protecting the owner's personal assets from business debts is an important consideration. For that reason, most startups choose to be organized as either a corporation, an S Corporation or a limited liability company (LLC). In some cases, it may make more sense for the business to be operated as a sole proprietorship or as a partnership.

Create your business entity

Once you have determined what legal form your business should take, it is important to make sure that the business is properly formed. In the case of a corporation, that means not only filing the articles of incorporation with the Illinois Secretary of State but also preparing organizational minutes of the shareholders and directors, adopting bylaws, issuing stock, etc. In the case of an LLC, it means not only filing the articles of organization creating an appropriate operating agreement for the LLC.

Register your business name ("Doing Business As")

If your business is a sole proprietorship or a partnership, you must register the business name in the county where you will be conducting business. If you have a corporation or LLC, you'll need to register the business name with the Illinois Secretary of State unless the name of the business is the same as the name of the entity.

Obtain a Federal Employer Identification Number

If your entity is a Corporation, a partnership or an LLC taxed as a Corporation or partnership, you must obtain a Federal Employer Identification Number (EIN). Other entities only need an EIN if they have employees, but often it makes sense to have an EIN for other reasons. For example, your bank may require an EIN before allowing the business to open a bank account.

Register for state and local taxes

In Illinois, every new business must also register with the Illinois Department of Revenue and obtain a state tax number. Depending upon the location of the business, you may also need to register with your city or other local government revenue department.

Obtain business licenses and permits

Make a list of all federal, state and local licenses and permits required for your particular business. Some licenses require only a simple filing and are quickly issued; others require substantial work and may take much longer for approval. Some types of licenses even have public hearing requirements. Plan accordingly.

Open a bank account

To ensure that you have the full protection offered by your choice of legal entity, maintaining a separate bank account for the business is crucial. Commingling personal and business assets can give rise to a concept known as "piercing the corporate veil."

Understand your responsibilities as an employer

It is critical for new business to understand its obligations as an employer. Those include hiring procedures; workers compensation insurance; unemployment insurance; federal and state tax withholding, deposit and reporting obligations; and much more.

Protect your company's name

Merely forming your business does not provide much protection for your business name. For one thing, since businesses are formed on a state-by-state basis, another company can adopt the same name in another state. Conducting a trademark search even before choosing your name can tell you whether the name is available across the country or whether other businesses already use the name.


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David K. Staub
Staub Anderson LLC
55 West Monroe Street
Suite 1925
Chicago, Illinois 60603

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