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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 is 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. ZenBusiness is 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 quickly and efficiently, allowing you to navigate the bureaucracy with ease.
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.
1Name Your Idaho LLC
2Appoint a Registered Agent in Idaho
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 any questions you may have in the hopes that it will simplify the process of forming an LLC in the state of Idaho.
Your initial consideration when choosing a name for your LLC is that it is unique from any other business in the state of Idaho. You can do a name check quickly and easily on the Idaho Secretary of State’s Office business search page 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 but want to make sure your chosen business name is safe, you can submit an Application for Reservation of Legal Entity Name. This form allows you to reserve the business name for four months, so you don’t have to worry about someone else using that name before you get the rest of your paperwork in order.
Filing to reserve a name requires a $20 fee if done online or $40 if filed via paper. You also have the option of expedited service for an additional $40 or same-day service for an additional $100.
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.
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”) after you register your business with the state of Idaho. Filing this form incurs a $25 fee, and any other associated fees are the same as they are with the name reservation form.
Two other areas where you’ll want to cross-check your business name include:
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.
A 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.
A registered agent in Idaho must agree to perform the following duties:
Forward to you any process, notice, or demand about your business served on or received by the agent.
If the agent is a noncommercial registered agent, they must keep the information about their name and address current in the most recent registered agent filing for the business.
It’s a lot to stay on top of, so it is always a good option to look toward hiring an outside registered agent service. Some benefits of a registered agent service include:
Privacy: If you’re ever sued, your registered agent will be served with the paperwork instead of you, which would help avoid any embarrassment in front of your employees and customers.
Flexibility: With someone designated to work the traditional 9-to-5 schedule, it’s easier to travel for work or even take a sick day.
Less hassle: If you change your business address (say, move to a larger or better location), you won’t have to update your address with the state because you’ll have a designated registered office.
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. This can be done online for a $100 filing fee or via paper for $120. 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.
Expedited service is available for an additional $40, and same-day service is available for an additional $100. Paper forms are mailed to the Office of the Secretary of State and must include payment in the form of a check made 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 $1 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
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 and losses 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:
An Operating Agreement is considered a legally binding document in the state of Idaho. This means it should be drafted carefully. The right partner can help you with an Operating Agreement at a surprisingly affordable cost, using an existing customizable template to expedite the process. 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.
You will need an IRS Employer Identification Number (EIN) if you have more than one LLC member, have employees, or meet certain other criteria. You can obtain an EIN by completing the application on the IRS website.
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.
ZenBusiness can help with many parts of the process. We offer business formation services, in which we’ll complete and submit your business filing paperwork, serve as your Registered Agent, and supply an Operating Agreement template for your new LLC. Our more comprehensive plans also handle other headaches, such as getting an EIN and complying with state regulations.
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.
Learn more about the benefits of the LLC business structure.
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.
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 the forms to reach their destination. Expedited processing can be had for an additional $40 fee, and same-day processing can be done for $100.
Operating Agreements do not need to be filed with the state. However, they are legally binding documents that should be kept in a safe place in case they are needed in the future. In the absence of an Operating Agreement, your LLC will be subject to the rules and regulations laid out in the Idaho Uniform Limited Liability Company Act.
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 may opt to file taxes as a corporation.
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.
Although Idaho doesn’t require a general business license, many types of businesses can or must get one or more licenses or permits. Check out the Regulatory Requirements Wizard, which can help you figure out what licenses and permits your particular business may need. This site can help you with state licenses, but you’ll still need to research federal, local, and industry-specific licensing.
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.
If you’re still scratching your head, we recommend hiring a professional service like ZenBusiness to research for you. We will provide you with a comprehensive package of all the licenses and insurance required for your Idaho LLC and help you file any necessary paperwork.
Idaho requires that all LLCs file an annual report. There is no fee to file the report, and it can be done online. You will receive a reminder when it is close to time to file your report.
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.
While we hope that this guide has clearly laid out the requirements and processes involved in starting an LLC in Idaho, if you would like to learn more, contact the team at ZenBusiness today. We would love to work with you to get all of your forms filed and help you maintain compliance.
We can even take care of the entire process on your behalf, so you don’t have to.
Already an Idaho small business owner? We have your back there, too. Learn how ZenBusiness can help you run or grow your Idaho small business today!
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