Starting a business in Chicago

This guide is for anyone about to open a shop, restaurant, studio, consulting practice or home-based business inside Chicago city limits. It walks through the city license, the state and county paperwork, the zoning check that should come before any lease, and the free and low-cost organizations that help first-time owners get through all of it.

It covers the order to do things in, the main 2026 fees, where the offices are, and which neighborhood groups to call first. Suburbs have their own licensing rules, so this guide sticks to the city.

Business licenses and the city portal

Nearly every business operating in Chicago needs a license from the Department of Business Affairs and Consumer Protection, known as BACP. The license desk is the Chicago Small Business Center, which the city calls its one-stop shop for business licenses and public way use permits. BACP sets your license type from what you actually do, so describe your activities in detail.

What a license costs in 2026

Fees changed on January 1, 2026. According to the city’s fee update, a Limited Business License, which covers most offices, service businesses and general retail, now costs $500 for a two-year license. A Regulated Business License is $1,000 for two years, and a massage establishment license is $550 for two years.

Food businesses pay by size. The Retail Food Establishment page lists $660 for up to 1,000 square feet, $940 for 1,001 to 2,500 square feet, and up to $1,650 for spaces over 10,000 square feet. Home kitchens cannot be licensed for food; the city points home bakers to a Cottage Food Registration through the Department of Public Health instead.

A home office also needs a license. The home-based business page listed the home occupation fee at $1,000 when checked, which is higher than the Limited Business License, so confirm the current amount with BACP before you budget. The rules are strict: no exterior sign, one non-resident employee at most, no more than two customers at a time. Food, barber shops, animal care and medical uses cannot be home occupations.

How the process works

The city’s application steps run in a fixed order. You gather your state, county and federal registrations, submit a Business Information Sheet in person or online, get zoning approval, complete the full application, pay, pass any required inspections, and clear any holds. BACP runs a debt check on every applicant, so unpaid parking tickets, water bills or other City debt tied to an owner will stop a license from issuing. Some license types require fingerprinting of anyone with more than a 25 percent stake, at $40 per person.

Licenses renew online through Chicago Business Direct, the city’s account portal, where account holds also show up.

Visiting the Small Business Center

The Small Business Center is in City Hall, 121 N. LaSalle Street, 8th floor, Room 800, open Monday through Friday from 8:30 a.m. to 4:30 p.m. The phone line is 312-74-GOBIZ (744-6249). Consultants work first-come, first-served, and the visit page warns that waits tend to run longer between 11 a.m. and 3 p.m., so go early. You can pull a place-in-line ticket remotely for some services, but you have to be in the room when your number is called.

By transit, the Clark/Lake station is a block north of City Hall and serves the Blue Line plus the Brown, Green, Orange, Pink and Purple lines. The Blue Line’s Washington stop is also close. Loop garages near City Hall are expensive and street parking is metered and scarce, so the L is the easier choice.

State registration and taxes

The city will not finish a license without your other registrations in hand. BACP’s required documents list varies by structure, but most applicants need some combination of the following.

• State registration from the Illinois Secretary of State for an LLC, corporation or limited partnership. File articles and pay the filing fee through the Secretary of State’s business services site; check the current fee there before filing.
• An Assumed Name Certificate from the Cook County Clerk if a sole proprietor or partnership uses a name other than the owners’ legal names. The clerk’s registration page lists a $50 fee, a notarized application, and a legal notice that must run in a local newspaper once a week for three consecutive weeks, with proof of publication due within 50 days. Newspaper publication costs extra.
• An Employer Identification Number from the IRS. The IRS application is online and free; the agency warns against websites that charge for one.
• An Illinois Department of Revenue account ID if you will hire employees, sell products or manufacture goods.

The Department of Revenue registration happens on MyTax Illinois using Form REG-1. The department’s registration page says online applications take about one to two business days, while paper forms take four to six weeks. The same portal can register you with the Illinois Department of Employment Security for unemployment insurance, which the state’s step-by-step guide says generally applies once you pay at least $1,500 in wages in a calendar quarter or employ workers in 20 or more weeks.

Chicago layers its own taxes on top. The Department of Finance keeps a list of city taxes that includes a restaurant tax on places for eating and a lease transaction tax on leased personal property. Restaurants should read that list before setting prices.

Zoning and finding a space

This is where most expensive mistakes happen. The city’s zoning guide is blunt: do not sign a lease or make a financial commitment until the City has confirmed through a zoning review that your business activity is allowed at that address. Do not assume the last tenant’s use carries over to you. A storefront that held a clothing boutique may not be zoned for a restaurant, a gym or a tattoo studio.

Start with the city’s Interactive Zoning Map to look up a property’s district, then confirm with a consultant at the Small Business Center or by phone. Zoning review can also involve parking requirements, driveway permits from the Chicago Department of Transportation, building permits, and plans from a licensed architect.

Other things to check before you commit:

• Signs, awnings, canopies and lighting that hang over the sidewalk need a BACP public way use permit.
• Sidewalk cafes and curb-lane seating need a separate outdoor dining permit.
• If you plan to sell alcohol, check the city’s liquor moratorium and dry-precinct map for the address before anything else.
• Building repairs may qualify for city grants. The Small Business Improvement Fund helps pay for permanent improvements in Tax Increment Financing districts, rolling out by district each month, and the Neighborhood Opportunity Fund offers grants up to $250,000 for projects that support new or expanding businesses, according to the Department of Planning and Development’s grants page.

When hunting for space, a local chamber often knows which landlords on a corridor are flexible.

Small business support organizations

Most first-time owners do not need to pay a consultant to get licensed. BACP funds a network of Neighborhood Business Development Centers, 65 local organizations that give no-cost help with licensing and permits, one-on-one advising, workshops and access to capital. Among the citywide groups on the city’s 2025 partner list:

• Women’s Business Development Center, 8 S. Michigan Avenue in the Loop, near the Madison/Wabash and Monroe stations. The city lists the center as a citywide capital specialist, meaning its focus is helping owners find financing.
• Chicago’s Sunshine Enterprises, 503 E. 61st Street in Woodlawn, a few blocks from the Green Line’s King Drive stop. The city lists the group in the same capital category.
• Allies for Community Business (A4CB), 135 N. Kedzie Avenue in East Garfield Park. The nonprofit lender makes loans up to $500,000, runs coaching, and has kitchen space for food businesses.
• SCORE (Service Corps of Retired Executives), 332 S. Michigan Avenue, Suite 600, also on the citywide capital list.

The U.S. Small Business Administration’s Illinois District Office shares that 332 S. Michigan Avenue address and sees visitors by appointment only, Monday through Friday from 8 a.m. to 4:30 p.m. Ask there about SBA-backed loans. The Jackson Red Line stop and the Harold Washington Library station are each a short walk, and the Metra Electric’s Van Buren Street station is right on Michigan Avenue.

The state funds Illinois Small Business Development Centers, which give confidential advising and business plan help; the Business Information Center at 800-252-2923 can point you to the nearest one. BACP also runs free online business webinars and a Chicago Business Resource Expo series with licensing consultants, a tax clinic and workshops at locations around the city.

Neighborhood chambers

Chambers of commerce are membership groups, so joining costs money, but many also hold city contracts as Neighborhood Business Development Centers and give licensing help for free. The Chicagoland Chamber of Commerce works citywide. For a storefront, the neighborhood chamber on your corridor is usually more useful. It knows the alderman’s office and the landlords.

A few chambers on the city’s 2025 NBDC list, with the office addresses the city gives:

• Andersonville Chamber of Commerce, 5217 N. Clark Street, which covers Edgewater and also trains other NBDC groups.
• Lakeview East Chamber of Commerce, 3138 N. Broadway.
• Lincoln Square Ravenswood Chamber of Commerce, 4505 N. Lincoln Avenue.
• Little Village-26th Street Area Chamber of Commerce, 3610 W. 26th Street. The chamber’s site lists a free advisory program called De La Mano.
• Hyde Park Chamber of Commerce, 1525 E. 53rd Street.
• Chicago’s Chinatown Chamber of Commerce, 2169B S. China Place.
• Greater Roseland Chamber of Commerce, 1000 E. 111th Street.

The full partner list also includes the Pilsen, Logan Square, Lincoln Park and Edison Park chambers, plus business associations and development corporations in Austin, North Lawndale, Back of the Yards, Beverly and other areas. If your address is not covered, email the city’s NBDC office at NBDC@cityofchicago.org. For more on neighborhoods across the city, see our Chicago page.

Good to know

Checked September 28, 2026. Business license fees changed on January 1, 2026, so older checklists may quote outdated amounts. The Department of Planning and Development’s grants page listed a November 13 deadline, at 11:59 p.m., for the current Neighborhood Opportunity Fund round. The Small Business Center and other City Hall offices close on city holidays,. BACP’s 2026 expo series had no upcoming dates posted when checked.

Know a place that belongs in this guide, or a detail that has changed? Send a correction.