Steps to Register Your New Business

Steps to Register Your New Business

Don Elmore, Director

Illinois Small Business Development Center at Champaign County EDC

What are the right steps and what’s the right order when you register your new business? These steps are not difficult and most of them are free, but it’s easy to find yourself in the middle of completing a form only to discover that you needed to do something else first.

This post is not about what type of business structure to choose -- it assumes you are starting as a sole proprietor. There are other requirements if you’re forming anything but a sole proprietorship or general partnership. (Business types is the subject of an upcoming post).

1. Choose a business name: Do some research to avoid picking a business name already in use – search online, check the US Patent & Trademark site and the Illinois Corporation Search site

2. File Assumed Business Name with the County Clerk: If your business name is different from your personal name you must submit this form with a $5 payment and run an ad three times in the local paper (about $60 total) to formally announce your business name. The paper will provide you with a certificate that you need to file with the county clerk in order to finalize the process. See the link above for the form and instructions.

3. Obtain an Employer Identification Number

Sole proprietors who wish to have employees need to obtain an Employer Identification Number, or EIN.  This is a nine-digit number issued by the IRS to keep track of businesses.  All businesses with employees are required to report wages to the IRS using their EIN. Registering for an EIN can be done online at the IRS website.

Even though sole proprietors without employees are not required to have an EIN, you may want to obtain one anyway. Some banks require one to open a bank account and it can reduce the risk of identity theft.

4. Register your business in Illinois: You will need to use your EIN when registering your business at mytax.illinois.gov.  Create a MyTax login and find the REG-1 form to register online.

5. Obtain Licenses, Permits, and Zoning Clearance

Your business may need to obtain business licenses or professional licenses depending on its business activities.  Illinois provides a comprehensive database of every license and permit that may be required for your business. In addition, local regulations, including licenses, building permits, and zoning clearances, may apply to your business. You will also need to check with your city and county governments for more information.

If you’re already working with the Illinois Small Business Development Center at Champaign County EDC, these steps aren’t new to you. If not, I encourage you to contact  us at the SBDC right away for help with your business startup needs.

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