Starting a new business in Idaho can be exciting and stressful. You’re probably eager to open up shop and start interacting with customers or clients, but before you can do that, there’s paperwork to be filed, and you need to make sure all legal requirements are completed correctly.
The process may seem complicated at first, and it’s easy to get bogged down in the red tape and details. We are here to help and show you how forming a limited liability company (LLC) in Idaho can be straightforward and affordable.
In this guide, all of the required steps are laid out in an organized manner so that you can get the big picture of what you need to do and all of the relevant details. A clear understanding of Idaho’s LLC formation requirements will put you on the path to launching your new company.
Learn how the right LLC partner can support you through this process and provide value to your company once it’s up and running. Once your Idaho LLC is formed and all of the paperwork taken care of, you can focus on making your company grow without worry.
Let this guide simplify LLC formation for you so that you can get started running your business sooner.
To form an LLC in Idaho, you must file your Certificate of Organization with the Secretary of State. Doing so creates a public record of your company and allows the state to regulate and communicate with your business on important matters.
Before you fill out and file the associated paperwork, you need to make some critical decisions. Additional steps need to be taken after filing the Certificate of Organization, including creating an operating agreement, obtaining any necessary professional licenses, and setting your business up to file taxes at the federal, state, and local levels.
These steps have been broken down in this section to keep it all straight. We’ve put together a step-by-step guide to answer questions you may have in the hopes that it will simplify the process of forming an LLC in the state of Idaho.
Step 1: Name your Idaho LLC
Your initial consideration when choosing a name for your LLC is that it is unique from any other business in the state of Idaho. Use our Idaho Business Entity Search page to learn how to do a name check to verify the business name you want is available and not already in use.
To comply with Idaho state law, your company’s name must end with the words “Limited Liability Company,” “Limited Company,” or the abbreviations “LC,” “LLC,” or “L.L.C.” Nothing in the LLC name can state or imply that it was formed for a purpose different from what is stated in the Certificate of Organization.
If you are not ready to file your Certificate of Organization in the Gem State but want to make sure your chosen business name is safe, Idaho allows you to reserve a business name for four months for a fee. If you’d rather not deal with this process yourself, we have a business name reservation service that can handle it for you. As part of the service, we also check to see if your desired name is available. If you plan on filing your Certificate of Organization right away, or you aren’t worried that someone will snag your business name before you do so, you do not need to file an Application for Reservation of Legal Entity Name and can name your business when you file the Certificate of Organization.
When you’re coming up with a business name, it’s wise to consider whether you can secure a matching domain name so that your future website can be easily found online. We have a tool to help you do a preliminary domain name search, and our domain name registration service can help you secure the online name that will best serve your company.
If you plan on doing business under a name other than your official business name — for example, if you want to separate services under different titles or advertise under a name that doesn’t include the required “LLC” after the title — you can file a Certificate of Assumed Business Name (commonly referred to as a DBA or “Doing Business As” name) after you register your business with the state of Idaho. Filing this form incurs a fee, and any other associated fees are the same as they are with the name reservation form.
You may also use our quick and easy Idaho DBA service which can save you time, money, and potential headaches.
To make sure you’re entirely in the clear with your business name, visit the United States Patent and Trademark Office website to see whether your business name or logo is federally trademarked. Trademarks can also happen at the state level. To find out if your desired business name is already trademarked and/or apply for a trademark of your own, go to the Idaho Secretary of State website page for trademarks.
Step 2: Appoint a registered agent in Idaho
The state of Idaho requires that an LLC have a registered agent for service of process, meaning your LLC must have an entity that agrees to physically accept any legal papers on your company’s behalf should it be sued.
An Idaho registered agent can be a person or a registered agent service. The key requirement is that they have a physical address in the state of Idaho and agree to receive and forward legal notices to you. The address cannot be a P.O. Box or anything similar. While you can be your own registered agent, this is generally not advised, as it can create conflict or put you in the awkward position of receiving legal papers in front of customers.
It’s always a good option to look toward hiring an outside registered agent service like ours. Some benefits of a registered agent service include:
- Ability to move your office location without having to update your registered agent address with the state.
- Freedom to leave the office, as the registered agent must be present at the office during all normal business hours.
Step 3: File Idaho Certificate of Organization
To form your LLC in the state of Idaho officially, you’ll need to complete the Certificate of Organization and file it with the Secretary of State. Filing official government documents like this can be intimidating and/or complicated for many people, which is why we’re here. With our business formation plans, our professionals handle the filing for you to make sure it’s done quickly and correctly the first time. But, although we can handle this for you, we’ll show you how the process works below.
This can be done online or via paper; either method incurs a filing fee. To file online, you will need to create an Idaho SOSBiz account, which you can then use to log in and file many other forms.
Idaho has options for expediting your filing for an additional fee. If you’re in a hurry to form your LLC and don’t want to jump through the hoops of the state’s expedited filing processes, we can handle it for you with our faster filing speeds service.
Paper forms are mailed to the Office of the Secretary of State and must include payment in the form of a check made out to the Idaho Secretary of State.
For those who choose to mail their Certificate of Organization, send all paperwork to:
Office of the Secretary of State
450 N 4th Street
P.O. Box 83720
Boise, ID 83720-0080
Online payment can be made with all major credit and debit cards for a small transaction fee.
To complete the paperwork, you’ll need to provide the following information:
- The name of your LLC
- The street and mailing address of your LLC’s principal office
- The name and address of the company’s registered agent
- The name and address of at least one LLC member or appointed manager responsible for managing the company (note that the form refers to such a person as a “governor”)
- The mailing address where you would like to receive annual report notices
- Contact information (phone number and email) where you can be reached
If you have us handle filing your Articles of Organization, once the state approves your LLC, your paperwork will be available from your ZenBusiness dashboard, where you can keep it and other important paperwork digitally organized.
Once you get your physical paperwork back from the state approving your new LLC, you’ll want to keep it in a safe location along with your other important documents, such as your operating agreement, member certificates, contracts, compliance checklists, transfer ledger, etc. We offer a customized business kit to help you keep these important documents organized and looking professional.
By now you’re realizing how often you’ll need to supply an address for your new business. That can be unsettling for some business owners, especially those running their business from home. In instances where you’re not required to give the registered agent address or official principal address for your business, a virtual business address can come in handy.
With our virtual business address service, we supply you with a physical street address where you can have your mail sent without divulging your real address to more people than necessary.
Step 4: Create an operating agreement
An operating agreement is a document that spells out all the details involved in the day-to-day operations of your business. It covers things like who owns what percentage of the business, how profits are distributed, and how decisions are made.
Creating an LLC operating agreement helps set the ground rules between you and your business partners before your business takes off. It helps you avoid disagreements and make clear decisions.
While operating agreements are not strictly required for LLCs in Idaho, they are recommended. The benefits of having an operating agreement include:
- Protection of personal assets: By spelling out which assets and affairs are tied to the business and not, you add another layer of legal protection between what happens to your business and what happens to you personally.
- Clearly defined rules: In the absence of an operating agreement, there are default rules set forth by the state of Idaho for how things work in an LLC. If you want to avoid going with the default and make it clear how your company should run, an operating agreement is the way to go.
- Assign ownership: The agreement can clearly spell out what percentage of the company is owned by each member, including how much capital they contributed and how any expenses and profits should be shared. This will help avoid any disagreements with your partners down the road.
- Succession and dissolution: The agreement can also include explicit details about who gets your share of the business if something happens to you and how things will be divided up if the business dissolves.
- Business funding: Sometimes, to get business loans or lines of credit, a bank will want to see an operating agreement to make sure you’ve given your business some serious thought.
- Mindset: Creating an operating agreement gets you in the right mindset to start a business. It forces you to think about different scenarios and plan accordingly.
An operating agreement is considered a legally binding document in the state of Idaho. This means it should be drafted carefully. If you’re unsure as to how to start creating an operating agreement for your LLC, we offer a customizable Idaho operating agreement template to help get you started. In terms of peace of mind alone, it’s a prudent investment.
Once you have finalized your operating agreement and it’s time for all members to sign, you should have the signatures notarized. This secures the legal foundation of the agreement. However, you do not need to file the finalized agreement with the Secretary of State or any other entity. You just need to keep it in a secure location with any other business-related documents.
Step 5: Apply for an EIN
You will need an IRS Employer Identification Number (EIN), also referred to as a Tax ID Number or Federal Tax Identification Number, if you have more than one LLC member, have employees, or meet certain other criteria.
You can get your Idaho LLC’s EIN through the IRS website, by mail, or by fax, but if you’re unfond of dealing with that particular government agency, we can get it for you. Our EIN service is quick and eliminates the hassle.
Once you’ve secured an EIN, you’ll be able to open a business bank account. Having separate accounts for your business and your personal banking is critical for sorting out your finances at tax time and helps you avoid commingling funds. Commingling funds can not only make your taxes more difficult, but it could also be used against you if someone takes you to court to challenge whether you and your LLC are truly separate entities.
We offer a discounted bank account for your new business. This allows for unlimited transactions, online banking, a debit card, and more. When you want to authorize others in your business to use the account, we offer a banking resolution template to simplify the process.
For further help managing your new business’s finances, try the ZenBusiness Money App. It can help you create invoices, receive payments, transfer money, and manage clients all in one place.
Your company may need to register with the Idaho State Tax Commission. Whether your company needs to follow this step will depend on the exact taxes it will be collecting and/or has been collecting from the state and whether you have employees.
Visit the Idaho State Tax Commission Business Basics Hub page for information on how to register your business to pay taxes and what types of taxes you may need to pay to remain in good standing.
The Idaho Business Registration System website will assist you in registering with the Department of Labor, Tax Commission, and Industrial Commission to ensure you are set up for any sales or use tax, income tax withholding, unemployment insurance, and more.
Idaho LLC FAQs
How much does it cost to start an LLC in Idaho?
The state fees for forming an Idaho LLC can range from $100 to $140, depending on factors such as your method of filing and whether you choose to reserve your business name. Expediting the filing will further add to the cost. Note that fees change over time, so check the Idaho Secretary of State website for the most recent fee schedule.
What are the benefits of an LLC in Idaho?
When considering the benefits of forming an LLC in Idaho, it makes sense to note the benefits of an LLC itself and then look at why Idaho is a great place to start a business.
Forming an LLC provides the protection of a corporation with the tax benefits of a partnership or sole proprietorship. In Idaho, an LLC:
- Operates under an operating agreement created by its members or is governed by the Idaho Uniform Limited Liability Company Act.
- Protects the individual owners from personal liability for the acts of the company. They are not personally liable for debts, obligations, or liabilities created by the company in most situations.
- Is taxed like a sole proprietorship (if one owner) or a partnership (if multiple owners).
- Is a simple business structure with straightforward filing, management, compliance, regulations, and administration.
There are many advantages to forming an LLC in Idaho compared to other states. Among these are:
- Idaho ranks No. 1 for job growth in the nation and No. 3 for business friendliness.
- Idaho has a top-performing economy with one of the lowest costs of doing business.
- Idaho has one of the lowest costs of living in the country.
- With 12 major metropolitan areas and a growing population of nearly 2 million people, Idaho is home to a variety of key industries, including advanced manufacturing, aerospace, food production, and tourism.
- Many incentives, including tax reimbursement, grants, financing, and workforce development, are available.
How is an LLC taxed in Idaho?
There is a wide variety of business taxes that your Idaho LLC may need to pay. These include taxes that are payable to the Idaho government, like sales tax. You will also need to pay federal, self-employment, and possibly payroll tax to the IRS. Because your business is an LLC, however, you can avoid having to pay both business income tax and personal income tax since LLCs are taxed like partnerships. What this means is that they are considered pass-through entities; the income on the business “passes through” to your personal income and is only taxed there, not on the business level. If you are a single-owner LLC, all of your LLC income will be treated as though it is your personal income and taxed accordingly. If you have other members in the LLC, you will need to file forms indicating what each member’s earned share was, and they will pay taxes on their share as part of their personal tax return.
If you have employees or operate or sell certain items, additional taxes may apply. Among the taxes that you could be responsible for in the state of Idaho are the following:
- Amusement devices
- Beer tax
- Business income tax
- Cigarette tax
- E911 prepaid wireless fee
- Electricity tax
- Estate tax
- Fuel tax
- Income tax
- Mine license tax
- Oil and gas production tax
- Property tax
- Sales and use tax
- Tobacco tax
- Travel and convention tax
- Vending machine tax
- Wine tax
- Employee withholding tax
To learn more about each and determine which taxes apply to you, visit Idaho’s Tax Types page. Another great resource that will help you sort out what taxes, forms, licenses, and other items you may need to consider to remain compliant is the Idaho Business Wizard page. By answering a series of questions, the site will let you know what you need to file and do next.
Those who purchase any of our plans get a free accounting consultation and tax assessment from our specialists to receive helpful resources and no-obligation recommendations around your bookkeeping, accounting, and tax needs.
What is the processing time to form my Idaho LLC?
The Secretary of State’s website indicates it typically has a seven to 10 day turnaround time on most filings. If you file by mail, you will need to account for the additional time it takes for the forms to reach their destination. Expedited processing can be had for an additional fee, and same-day processing can be done for a larger fee.
Do I need to file my operating agreement with the state of Idaho?
Alabama does not require new LLCs to file their operating agreements with the state. In the eyes of state officials, these documents are considered important internal guidelines but not necessary for registering with the government.
But while Alabama may never ask you for it, you should still create an operating agreement for your new LLC. In terms of protecting yourself and the future of your company, doing so is highly advisable. This is true even if you’re launching your LLC alone: operating agreements can significantly benefit single-member LLCs in addition to those with multiple owners.
As discussed earlier, an operating agreement specifies your company’s management structure and practices, designating the privileges, powers, and responsibilities of the individuals involved. This agreement generally includes clear instructions on how to proceed if certain outcomes occur, such as members leaving or joining an LLC.
What tax structure should I choose for my Idaho LLC?
When you get an EIN, you will be informed of the available tax classification options. Most LLCs elect the default tax status, which means that owners pay state and federal taxes on income earned from the business as part of their individual taxes. The LLC is not separately taxed as an entity. Larger LLCs sometimes opt to file taxes as a corporation. A tax professional can help determine what tax classification would be best for your LLC.
Does Idaho allow a Series LLC?
A Series LLC has more than one series of members, managers, or LLC interests with separate rights, powers, or duties. Each series may also have a separate business purpose. They are not explicitly allowed in Idaho. You should check with a lawyer before attempting to register an LLC associated with a larger Series LLC in the state to make sure you will not face legal repercussions.
Which licenses and insurance are required for an LLC in Idaho?
Although Idaho doesn’t require a general business license, many types of businesses can or must get one or more licenses or permits. You’ll still need to research federal, local, and industry-specific licensing.
If you don’t have the time or inclination to do all this research, or if you just want the peace of mind to know that your business has all the licenses and permits it’s legally required to have, our business license report service can do the work for you.
To figure out what kind of insurance you might need, visit the Idaho Department of Insurance website to understand what you need to ensure you, your business, and your employees are protected.
What annual filings are required for my Idaho LLC?
Idaho requires that all LLCs file an annual report. There is no fee to file the Idaho annual report, and it can be done online.
We can help you with your annual report in a couple of ways. Our annual report service will help you file your annual report, and our Worry Free Compliance service not only helps with filing your annual report, but also sends you other important compliance reminders and helps you with two amendment filings each year.
What is the process for creating a foreign LLC in Idaho?
A foreign LLC is one in which the business is not based in the state of Idaho but wants to do business in Idaho. Registering is very similar to that of a domestic LLC but requires filing a Foreign Registration Statement instead of the Certificate of Organization. The same fees apply. To maintain a foreign LLC in Idaho, you will need an Idaho registered agent, as well.