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.
The 5 steps to form an LLC 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.
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. 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:
- Trademark status: Visit the United States Patent and Trademark Office website to see whether your business name or logo is federally trademarked.
- Domain name availability: Through a quick domain name search, you can determine whether your desired domain is available. ZenBusiness can help you reserve your website domain name.
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.
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.
- If the agent is a commercial registered agent, they need to keep their listed information current.
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.
Step 3: File Idaho Articles 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. 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
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 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:
- 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 a 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. 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.
Step 5: Apply for an EIN
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.
How much does it cost to start an LLC in Idaho?
The exact amount depends on what type of business you are starting, which forms you file, and any consulting fees. At an absolute minimum, you will need to pay the $100 electronic filing fee for filing your Certificate of Organization. Additional fees that may or may not apply are as follows:
- $20 (in addition to the $100) if filing the Certificate of Organization on paper instead of online
- $20 for reserving your business name online or $40 for reserving via paper form
- $40 for any expedited filing
- $100 for any same-day service
- Fees for any required business licenses
- Fees for registered agent service
- Fees for assistance in writing an Operating Agreement
- Notary fees
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 and income 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 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 multiple partners, 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.
Idaho LLC FAQs
- 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 $40 fee, and same-day processing can be done for $100.
- 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.
Thankfully, you don’t need to pay an expensive attorney to draft up an Operating Agreement that perfectly suits your business. With our Operating Agreement services, our experts can help you adapt existing legal templates to fit your new company’s needs. Learn more about this benefit today, and see how easy and affordable this key step can be.
- 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 may opt to file taxes as a corporation.
- 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. 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.rnrnTo 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.rnrnIf 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.
- 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 report, and it can be done online. You will receive a reminder when it is close to time to file your report.
- 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.