Becoming a Sole Proprietor in Illinois

Hither is an outline of the steps yous should follow to get started equally a sole proprietor in Illinois. You should also read the general department for data applicable in any state.

1. Choose a business name for your sole proprietorship and check for availability.

  • Please see our section on choosing and checking the availability of a name for your small business, as well as our section on the trademark law aspects of choosing a proper name.

two. Register the business proper noun with local, state, and/or federal authorities.

  • If you will be operating your sole proprietorship under a name that is dissimilar from your own name, then you will need to register the proper name as a "fictitious" or "assumed" business name. In Illinois, y'all do this past applying for permission to use an "assumed name" with the county clerk's office in the county where your principal place of business will exist located.
  • Although you are not required to do and so, y'all should consider registering your business organization name as a federal and/or country trademark. Please see the Trademark for Business Naming section for details.

three. Obtain any required local licenses.

  • Delight see the general section for details.

iv. Decide what tax and other regulatory obligations your sole proprietorship has, and take care of any necessary registrations.

  • If you have an employee or employees, you lot need to apply for an Employment Identification Number from the IRS. Yous tin employ for an EIN online. You may utilise for an EIN fifty-fifty if you have no employees. Doing so may go far easier to open a depository financial institution business relationship and reduce your risk of identity theft. There is no filing fee.
  • If you have an employee or employees in Illinois, yous must register with the Illinois Department of Employment Security. You tin discover additional information on the Tax Registration Page of the Illinois Concern Portal.
  • All new business owners must register for business taxes with the Illinois Department of Acquirement. For details, meet the the Tax Registration Folio of the Illinois Business organization Portal.
  • Whenever y'all rent an employee in Illinois, yous must inform both the IRS and the State of Illinois. The IRS details all of the necessary steps to complete, including verifying work eligibility and withholding allowances certificates, on its page entitled Hiring Employees. You can find information on what to exercise on the state level on the New Rent Reporting section of the Illinois Business concern Portal.
  • If you have i or more employees in Illinois, you must carry workers' compensation insurance. Yous may choose to obtain workers' bounty insurance for yourself, just yous do not need to. (If yous have a workers' compensation policy for your employees, you lot must contact your insurance company if you DO NOT desire to exist covered.)
  • Every bit a pocket-size business concern possessor or employer, there may be other informational returns that yous take to file annually or semi-annually with the IRS. For more than information, accept a look at the IRS Guide To Information Returns.

5. Open a bank business relationship for your business concern.

  • Information technology is a good idea to keep your business'south finances split from your personal accounts. A good manner to do this early on is by opening a banking concern account for your concern. The bank will probably crave your Social Security Number or EIN and a copy of your business name filing, although you may not need any documentation if your business organisation'south proper noun includes your surname. (Here is an case of what banks may require.)

Jurisdiction:

  • Illinois

Field of study:

  • Business organisation Formation