πŸ“‹ How an Independent Piano Teacher Got a Chicago Business License

πŸ“‹ How an Independent Piano Teacher Got a Chicago Business License

When I applied for my Chicago business license, I had no idea what I was doing. Zoning laws differ in every locale and vary in restrictiveness, and Chicago is very strict. The city says that everyone conducting business in the city must have a business license, so that means independent music teachers teaching out of their homes. 

I wanted to start my home-based piano studio in my apartment legally and with as little cost as possible. I couldn't imagine the heartbreak of being closed down and unable to serve the students that I love encouraging. My purpose for this post is to help guide Chicago-based piano teachers pursue a business license in Chicago. 

Important Note: This blog post is not legal advice. After writing this, I found this excellent checklist from a local accounting firm. Please use this! It's very straightforward and detailed. 

You will work through the Chicago Department of Business Affairs and Consumer Protection (BACP). 

Step 1: Check your zoning designation. 

  1. Check this website: Chicago Zoning Website. RS followed by a number is residential. Mine was RS-3.
  2. Apply for a Home-Based Business License and select the Musician category. 

Step 2: Determine your organization.

I decided to be a sole proprietorship with a DBA. Other possible ways to organize include partnership, LLC, Corporation, or S-Corp.

Step 3a: Apply for a DBA.

If you are operating solely under your legal name as a sole proprietor, you do not need an Assumed Business Name from Cook County. But if you have named your piano studio like I did you need to apply for an assumed business name (aka DBA - "Doing Business As..."). LLCs register their names with the state, so they do not need a DBA from Cook County. 

Here is the example on the website:

"For example, a business called "John Jones, P.C." (i.e. owner's full name and title) does not have to file an assumed name, but "Jones Wrecking" does." 

If you decide this applies to you, apply here: Assumed Business Name Registration.

Here are the steps:

  1. Apply online and print a paper application. 
  2. Take this application to a Notary Public at a bank and sign it in front of them. 
  3. Send this application to the Clerk's office with a $50 application fee. 
  4. Receive a Copy of Legal Notice that you must publish in a local newspaper within 15 calendar days. It must be published for three consecutive weeks. I ran my legal notice with the Chicago Sun-Times and it cost $165. 
  5. The newspaper will send you a Certificate of Publication with the clipping to you as proof and you must return that the the Clerk's office. 
  6. The certificate will be sent to you in the mail.

Total cost for a Cook County DBA: $215 one time 

Step 3b: Apply for an LLC. 

If you decide to apply for an LLC with the Illinois Secretary of State, you will need to make an Articles of Organization. The name of your company must end with LLC. You also must appoint a Registered Agent (that can be you, but most advice suggests you appoint someone else) to submit Annual Reports. The fee is $150 when you submit your Articles of Organization one time and then $75 each year when you file your required Annual Reports. You must file the Annual Reports or else your LLC will be dissolved. 

Total cost for an Illinois LLC: $150 + ($75 x the number of years you operate your business)

Step 4: Apply for tax numbers.

Next is tax registration with Illinois. I attempted the IDOR ID application online multiple times and I determined that because I do not sell goods, I do not need an IDOR because I do not collect sales tax and I will not be hiring employees. (Source: New Business Checklist | Smith & Cull, Ltd.) If you are selling merchandise, you will need to get a tax number from IDOR and collect sales tax. 

Finally, apply for an Employer Identification Number (EIN) from the IRS. Please read this Starting a Business (IRS) for information about the different ways to organize your business and how to handle accounting. 

You will need to create a system of keeping track of income and expenses. I simply keep spreadsheets called Income (Year) and Expenses (Year). Make sure you understand if you need to file quarterly Estimated Taxes and how to calculate that amount based on your accounting. When you file, you will use your EIN. Do not lose the paper document sent in the mail with the EIN number. The bottom of the letter says they will only correspond with you if you use the tear off at the bottom of the page.

Total Cost for EIN: Free

Step 5: Apply for a Chicago Business License.

I applied online before the following was posted on the online portal. 

Home Based Businesses

Posted May 25, 2022

Applications for home occupation licenses (home based businesses) must be made in person at the Small Business Center. Such applications will not be accepted online. The Center is located at 121 N LaSalle Street, Suite 800 and is open from 8:30 AM - 4:30 PM daily Monday through Friday.

I'm sorry to say you have to go in-person now. 

Fill out this Chicago Business Information Sheet. This is a pre-application that you will use at the Small Business Center

If you are a Sole Proprietor, you will still put your full name as the Legal Name of Business. Then your DBA will go on the second line. Fill out the rest of the form to the best of your ability and take it to the Small Business Center at 121 N LaSalle St

Total Cost of a City of Chicago Home-Based Business License: $250 biannually

Total Licensing Startup Cost: $215 + $250 = $465 (+$250 every other year)

I wish you well in your endeavor to become a licensed piano teaching business in Chicago. Please leave a comment and let me know if this helped you obtain a business license. Once again, this is not legal advice; this is simply how I, an Independent Piano Teacher, got a Chicago business license.

-Jenny

Comments