How to Start an LLC in Idaho: Cost and Registration Steps

An LLC is a popular company type choice when starting a business in the United States. When comparing top LLC companies, the accounting or reporting process is simpler with the former, and, in most cases, tax conditions are also more favorable.

Additionally, unlike sole proprietorships, LLCs allow you, as a business owner, to protect your personal assets. In the event of bankruptcy or mandated payments, based on a court order, it's the LLC, not the members, that is liable. Thus, LLC members aren't personally responsible for the actions of the company.

You can read more about what is an LLC in Idaho in publications comparing different types of businesses in the US. In this article, we will talk in detail about LLCs. Namely, how you can successfully start an LLC in Idaho. 

That said, from this article, you will learn:

• How to open an LLC in Idaho step-by-step;
• How much to form/register an LLC in Idaho; 
• What additional costs to consider, taxes to pay, and reports to file;
• How to make sure your business and personal assets are protected, etc.

Even if you plan to hire a professional LLC formation company in Idaho, this guide will help you identify the necessary services and avoid upsells.

How to Form an LLC in Idaho: Step by Step Instructions

We've conducted extensive research so that you could have a simple and straightforward guide on how to form an LLC in Idaho. All the prices of registration and additional fees are relevant for 2022. However, you want to occasionally check the official Idaho Secretary of State's website for any current changes and up-to-date information. On the website, you will also find additional information regarding all the necessary business licenses/permits and understand if you need to obtain state/county approval for your LLC.

Still, the official information is often not detailed enough, and the language is often quite hard to understand. Thus, we hope you will find our guide more suitable and straightforward to use.

Step 1: Name Your LLC

You need to think of a unique and distinguishable name for your LLC. It's important that you and your company's marketing team not only choose an appropriate business name but also make sure it's available for use in Idaho (i.e. not taken by any other existing business operating within the state).

Your chosen LLC name must also meet all the necessary requirements of the state:

• The name must include the phrase "limited liability company" of one of its abbreviations (e.g., "LLC", "L.L.C."). Also, a comma may be placed in front of the abbreviation if you want, thereby separating the direct name from the type of business;
• The name of your LLC should be markedly different from the names of already registered legal entities operating in the state so that there is no confusion. Note that mandatory indications on the type of business (e.g. "LLC") are not taken into account. This means that your name cannot be distinguished from some other name (e.g., a corporation) only by the abbreviation at the end;
• In your LLC name, it is forbidden to use words that indicate that your company has anything to do with the government. Such words include "police," "congress," "department," "FBI," and so on;
• The company name should not suggest that you will provide illegal services, including those that require any kind of professional license (if you don't have one). Therefore, if you want to indicate the words "bank," "lawyer," "doctor," "medicine," or any other words related to business activities that require special permits and licenses, make sure that you have the necessary documents. Or find out in advance what permits you will need and how to obtain them.

How to Check Your LLC Name Availability

Before you initiate your Idaho LLC registration, make sure that your chosen business name not only complies with Idaho laws and regulations but is also available for registration. To do this, go to the state's official website and do a legal entity name search.

When conducting your business name search, consider the following points:

• Do not enter the "LLC" abbreviation or the full phrase ("limited liability company") in the search field;
• Conduct several searches with different spellings and word order;
• If your name is similar to an existing business name, confusion may arise, and the Secretary of State may reject your application.

LLC Name Reservation

When starting an LLC in Idaho, even when you already have a business name, your business activities still need to be postponed for some time. To save your chosen business name, you can reserve it for up to 120 days.

To do this, you must submit your name reservation form indicating the following information:

• LLC name;
• Name and address of the applicant;
• Date of filing the application;
• Signature;
• $20 fee.

DBA Registration

A DBA (doing business as) is an alternative fictitious business name used for marketing purposes. However, filing a DBA has nothing to do with registering your business. If you wish, you can register a DBA right after your Idaho LLC registration process is complete.

You should file a DBA in the following cases:

• Your legal LLC name is too long/complex or (for any other reason) not suitable for marketing purposes;
• You want your marketing name to be your trademark (brand), i.e. short and recognizable;
• You plan to expand or change your assortment. Thus, your trade name has to match your products/services.

For example, you plan to sell baked goods. You create an LLC with the name "Jefferson's Baked Goods, LLC." To make the advertising look more appealing, you register a DBA "Jeff's Bakery". This way, your name becomes more appealing from a marketing perspective.

Time passes, and you want to sell not only baked goods but also coffee. And, of course, you want to notify your customers about this. Changing the official name of the LLC can be quite complicated and time-consuming. However, you can quickly and easily change your DBA. Now your signage and advertising will say "Jeff's Coffee & Bakery."

To file for a DBA, you will need to fill out the Certificate of Assumed Business Name form and file it with the Idaho Secretary of State. There's also a filing fee of $25 (online).

To change your DBA you need to fill out and file the new Certificate form, pay the fee, and wait for approval from the state.

Step 2: Appoint a Registered Agent Setting Up an LLC in Idaho

Before you start an LLC in Idaho, you need to find a registered agent for your company. You will need to indicate your RA's information in the Articles of Organization when registering your LLC.

A registered agent in Idaho is a person (or an entity) that will receive important correspondence and legal/tax documents on behalf of your company from the state.

In Idaho, in order to become an RA, the person should: 

• Be a state resident;
• Be an individual of 18 years of age
• Have a physical office address in the state. 

Namely, this can be any adult who is a permanent resident of the state, including yourself. You can also choose a legal business entity (filed with the Secretary of State) that has an Idaho physical address to be your commercial agent. This cannot be your own LLC, though. Also, the state does not provide a list of or endorse any registered agent(s).

According to Idaho statute, the main requirement for a registered agent is that he/she must be constantly available during normal business hours (9:00 a.m. to 5:00 p.m.) to receive legal correspondence or accept service of process. If a situation arises where a registered agent is unavailable at the listed address, the state government may conclude that your LLC is operating without a registered agent. And then you will face heavy fines, which may damage your business reputation.

Since Idaho LLC costs, associated with registered agents, are sometimes high for business owners, they decide to become their own RAs.

The advantages of such a decision are as follows:

• Savings. You don't pay anyone for actions you can do yourself;
• Convenience. You get all the important business information and documents yourself, without any delays associated with mail forwarding or scanning;
• Simplicity. You maintain a single registered up-to-date address, i.e. your home address.

The disadvantages of being your own RA are as follows:

• Privacy issues. The registered agent's name, phone number, and address are publicly available on the Idaho Secretary of State's website;
• Junk mail. Public data of companies, as well as registered agents, is actively used for marketing purposes. Most likely, you will receive a large number of junk emails with offers you're not interested in. Also, there's a great chance that you will constantly be distracted by calls with similar offers. That said, you'll waste your time sorting through unnecessary mail so that you don't miss an important notification from the state;
• Tough work schedule. As mentioned earlier, you will be required to constantly be available at the office. Basically, this means no lunch breaks, sick leaves, or vacations. If you're your own registered agent, you can also forget about flexible work schedules and travels, excluding weekend trips;
• Reputational risk. During a meeting with your client(s) in the office, a service of process agent can pay you a visit. Thus, you will have to interrupt your meeting and work things out with the agent, which may have a negative impact on your business reputation;
• Personal liability for mistakes/errors. If you indicate the wrong address or make any other mistake in your business documents, you're the only one to blame.

That said, before you learn how to get an LLC in Idaho, you want to address professional commercial registered agents. The cost of such services can bite, however, most often it's about $150 per year, on average. At the same time, if you hire an experienced RA, there will be no privacy concerns. Moreover, with such an agent, you can surely expect reliable service while focusing on your business growth.

If you plan to work in more than one state, consider national registered agents. These companies have offices in different states, which is really convenient.

Step 3: File Your LLC Articles of Organization

The first two steps can be called preparatory. Now we move on to answering the question of how to register an LLC in Idaho. Just like in any other state, you will have to submit the LLC Articles of Organization form (or a Certificate of Organization) to the Secretary of State for consideration and approval. Once approved, you will receive your signed registration document, and your LLC can be considered officially established. The Certificate of Organization confirms that your company can legally operate in the state of Idaho. You will also need it to get an EIN, open a business bank account, and so on.

To form an Idaho LLC, you must indicate the following information in your Articles of Organization:

• LLC name;
• Name and registered address of your resident agent;
• Address of the principal office (can be out of state);
• Mailing address for correspondence (may be registered agent's address, office address in Idaho (not a P.O. box);
• Name and address of at least one governor/manager (the one who runs the company);
• Mailing address for annual reports;
• Signature(s) of the LLC organizer(s).

You may also include additional information if you think it is necessary.

You can file the Articles of Organization online at the Idaho Secretary of State's SOSbiz website, by mail (download, fill out, and mail out the required form), or in person at the Secretary of State's office.

The state fee is $100 if you apply online ($120 if you submit the form by mail or in person), and processing time for online applications is usually 7-10 business days. If you choose to apply by mail or in person, it will take around 2 or 3 weeks.

If you wish, you can also choose expedited service (+$40) or "same day" service (+$100).

Mailing/delivery address:

Office of the Secretary of State

450 N 4th Street

PO Box 83720

Boise ID 83720-0080

Phone:

(208) 334-2301.

Step 4: Prepare an Operating Agreement

An Operating Agreement (OA) is a special internal company document (or more of a contract if you want) that all members of the LLC will agree upon and sign. The OA will describe exactly how your company will do business, including management, production, and financial aspects.

An OA is not an obligatory document in Idaho. However, most LLCs still have one in case of any disputes inside the company. The document includes certain rules, regulations, and provisions to follow by everyone in the LLC and regulates the following activities:

• Types of business activities that can be conducted by the LLC;
• How the LLC will be managed and how the rights and obligations will be distributed among its members;
• If the LLC will be managed by an LLC member (member-managed LLC) or a hired manager (manager-managed LLC);
• How the day-to-day operations of the company will be conducted - hours of operation, weekends, discipline, etc.;
• How LLC profits will be distributed, i.e. what percentage each member will have, when and how payments will be made, etc.;
• What procedure must be followed in case an LLC member wants to sell his/her share of the business: the sales process, deadlines, terms and conditions for paying the profits accumulated at the time of the sale, how the rights/responsibilities of the leaving member(s) will be distributed, etc.;
• Actions to be taken if someone wants to join an LLC: how the offer will be considered, how the decision will be made to reallocate profits and responsibilities, etc.;
• Procedures for dealing in case of incapacity or prolonged illness of any of the members, or if a member of the LLC passes away;
• If your LLC has outside managers, the agreement will describe how their rights, duties, and responsibilities will be distributed in the company, and how the hiring/firing process will be handled;
• LLC duration (or the procedure for liquidation of the legal entity if the LLC is registered as "perpetual");
• How changes will be made to the OA (if there will be a necessity for such changes);
• Other important aspects of the company's business activity.

There's no need to file your OA with the Secretary of State or pay any fees. The "contract" will be stored at your principal office along with your other business documents.

All members of your LLC should participate in the preparation of the operating agreement. Most often, the document is prepared by lawyers or drafted on the basis of a template, then it gets supplemented and adjusted at a general meeting. After that, all members of the sign the document.

An OA will allow you to easily solve complex issues and disputes in your company. Without such a document, certain disputes between your LLC members will be resolved in court, based on state law.

Step 5: Fulfill Idaho LLC Publication Requirement

Idaho has no publication requirements for LLCs, which continues to be the case in, say, the state of New York. Previously, virtually all US states had such a requirement - publication in a local newspaper or magazine was the only method of announcing the formation of a new business entity, which helped avoid fraud.

Today, once officially established, all LLCs are automatically added to a common database and become publicly available on the official Secretary of State's website. Therefore, once you set up an LLC in Idaho, no additional notifications are required.

Step 6: Get an EIN for Your Idaho LLC Formation

Once your Certificate of Organization is approved by the state, you can officially start running your business. However, no matter if you're a single-member or multiple-member LLC, you'll need an EIN.

An employer identification number (EIN) is a unique nine-digit code that the Internal Revenue Service (IRS) assigns to a new business to identify it for tax purposes. This number is much like a social security number (SSN) for an individual but is assigned to organizations. You will need it to pay your taxes to the state, open a commercial bank account, use it as an identifier when sending reports, and in certain other situations.

Most LLC owners prefer to have an EIN, which helps:

• Protect your personal assets (provide a "corporate veil");
• Increase the level of privacy;
• Get a commercial bank account;
• Protect yourself and your business from fraud.

Getting an EIN is completely free of charge. You can apply online or by mail. Simply download, print, and fill out Form SS-4, which is not supposed to take more than 10 minutes, and send the form by mail.

If you apply by mail, it will take some time to receive the EIN due to the postal service and workload of the IRS. Either way, no fees are required.

Address for sending SS-4 by mail:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

You can also fax the form to (855) 641-6935.

If you are an individual with foreign citizenship and you don't have an SSN, it is most convenient to submit the form on the IRS website. But if your business is registered outside the U.S., this method will not be available to you - you will have to apply by mail or by fax.

If you have any questions, you can call 267-941-1099. Hours of operation are Monday through Friday, 6 a.m. to 11 p.m. Eastern Time. The phone is not toll-free - you will be charged at your carrier's regular rates.

That's it. Now you should have a basic understanding of how to get an LLC in Idaho. We also have a few additional tips that will help your business grow quickly.

Idaho LLC Cost: How Much Does It Cost to Form an LLC in ID?

The minimum Idaho LLC cost is either $100 or $120, depending on your chosen filing method.

To apply, you will also need to consider the following aspects:

• Registered agent fee: approximately $150 per year;
• DBA fee: $25 (+$20 if you apply by mail).
• LLC name reservation: $20.

In addition, for some types of business, you will need a certain type of business license or permit. Fees can vary greatly here, and you can research them on the official website of the state.

Also, keep in mind that, if you're a first-timer, chances are that you won't be able to fill out all of the paperwork correctly on your own. For example, without a  professional lawyer, preparing a proper OA can become quite a challenge. Or you can always use professional help to create an LLC in Idaho.

Strange as it may seem, professional business formation services can help you save time and money. The fact is that their cheapest service packages start at $30-$40. Some companies will also provide useful additional services and even a free year of registered agent services, which can be really useful.

First Tasks After Forming an LLC in Idaho

Once you have figured out how to open an LLC in Idaho, and have completed the LLC registration, in addition to your EIN, you can also:

• Obtain the necessary business permits and licenses that your company needs to run business in the state. These may include permits from the Department of Health, certain professional licenses, zoning permits, home occupation permits, and so on. Consult your local government agency to find out which licenses are required for your business niche;
• Register your LLC with the state tax authority (if necessary);
• Open a separate business bank account; 
• Get business insurance, process payments from other companies, or get a loan from a bank.

Open a Business Bank Account

According to Idaho law, a business bank account for an LLC is not officially required. As a business owner, you have every right to receive payments and pay bills from your personal account. However, most LLCs choose to open a separate bank account.

Why should you open another bank account? Below are a few reasons to consider:

• Easy and reliable accounting. You won't have to manually sort out which payments are related to the business operations of the company, and which are your personal expenses/income (unrelated to the work of the LLC). As a result, your financial control will be more clear and reliable;
• Credit cards. This type of payment is not available to business owners that use their own bank accounts for business purposes;
• More opportunities. Large companies, especially in the B2B sector, will often refuse to transfer funds to personal credit cards or get paid from a personal account rather than on behalf of the company;
• Getting a business development loan is easier, plus, the terms will be more favorable. Even if you have enough money for everything you need at the start, sooner or later you will think about expanding and the possibility of using credit funds for the purpose. A business bank account will help the bank make a quicker decision, and the loan terms will be much more beneficial, compared to what you will be offered as an individual;
• You can protect your personal assets in case of any business problems. This last point is the most important. Small LLCs are often registered primarily for the purpose of protecting the personal assets of the business owner.

It's highly important that you never mix your personal and business funds. Therefore, you should never pay your utilities or school fees from your business bank account. Conversely, even if you really need to, never pay company bills from your personal bank account.

In this case, the so-called "corporate veil" arises. Only the company itself is responsible for all its obligations, not the members and shareholders. Therefore, in the case of a claim for payment or bankruptcy, payments to creditors will come from the company's accounts. At the very least, other company assets can be used. Your own savings will remain untouched.

Get Insurance

To protect your business from various force majeure situations, it's not enough to competently open LLC in Idaho and remain compliant with the state in the process. When it comes to business, you just never know what's coming up next. Just like in life. Therefore, you should get an insurance policy not only for your life, home, and vehicle but also for your business.

Each insurance policy is an additional regular expense. Therefore, make sure you carefully study the existing types of LLC insurance policies and choose those that are relevant to your business.

The most common types of such policies are as follows:

• Commercial auto insurance. Basically, this policy is no different from the standard auto insurance that you are well aware of. This type of insurance covers company-owned vehicles, trucks, and vans, as well as their drivers from;
• Commercial real estate insurance. This policy also doesn't raise many questions. You can get insurance for your office, building, or facility that is owned by the company. Note that flood insurance will most likely require a separate policy;
• Employee compensation. If you hire employees, you are required to compensate them in certain cases. In Idaho, you can choose to get your own policy from an insurance company or opt for self-insurance. Self-insurance is when you choose to pay claims (e.g. medical, dental, and vision) yourself, using a third-party administrator to process those claims on your behalf;
• General liability insurance. This is probably the most popular policy that protects your LLC in situations when someone (or something) gets injured/damaged on your premises or while performing work for your company, including bodily injury, property damage, and advertising injury. The policy covers legal costs of common customer lawsuits, compensations, and, if necessary, attorney's fees;
• Professional liability insurance. If you practice medicine and provide legal or other services, you may be interested in this policy, which is also sometimes called "errors and omissions insurance." You may need it in case of malpractice and professional errors to handle client lawsuits over unsatisfactory, copyright infringement, and claims of negligence;
• Business income insurance (business interruption insurance). Sometimes, you are forced to shut down your business due to various force-majeure emergencies (e.g. flood, fire, theft, wind, etc.). When this happens, and you can't operate your business due to any of the mentioned perils, this insurance will help you cover your lost income. Note that a list of insured events (perils) may be different in each insurance company. Therefore, make sure you study and compare them in advance.

Keep Your Company Compliant

Once you've opened an LLC and started your own business, you need to comply with federal and state laws, as well as local government regulations. We recommend you find out in advance what licenses, taxes, and permits you will need to run your business in Idaho. This is to be able to understand how much an LLC costs in Idaho in the process. The main information to know is:

• Federal laws are the same throughout the United States. Thus, if you already had a business in some other state, there will be nothing new for you in Idaho;
• State laws are similar in many ways too, but they are still different. That's why you want to visit the Idaho Secretary of State's official website and use the Business Wizzard to check if you need any special licenses/permits for your business. That's where you can also see how much it all costs.

Note that sometimes you may also need additional permits in the county where you will run your business operations. You can learn more about them and other local regulations from business formation services that can help you register your business. Alternatively, you can always do your own research on the Secretary of State's website.

Read about local licenses and permits on the website or consult with your local city or county clerk or a Recorder’s office representative.

Idaho LLC Tax Returns

In Idaho, not all LLCs are required to pay taxes - a lot depends on your type of business. The most well-known taxes are:

• Idaho sales tax. Everyone who sells physical products (not services or digital products) has to collect and pay sales tax in Idaho. You must register for a seller's permit at the Idaho Tax Commission website or contact the state clerk and find out how to submit Form IBR-1 and pay the fee. In many states, this tax is also called the "Sales and Use Tax." But the point doesn't change - you get your seller's permit, pay the fee, and receive legal permission to sell your goods. For more information, visit the Idaho State Tax Commission website;
• Idaho employer taxes. If your LLC has employees, the state of Idaho requires registration with the Idaho Department of Labor for subsequent payment of unemployment insurance taxes. Employers are also required to register with the Idaho Tax Commission on behalf of each employee to pay employee income taxes.

Federal Tax Requirements

In most cases, LLCs are "pass-through" entities on the federal level. This means that the company is not required to pay federal income tax. Instead, the LLC occasionally pays profits to its members. And the members enter the profits and losses on their tax returns.

To do this, they use:

• Form 1065, Return of Partnership (used by LLCs with multiple members to declare profits, losses, deductions, and credits of a business partnership for tax filing purposes);
• Form 1040, Schedule C (used by single-member LLCs).

Thus, the LLC pays you, as the owner, and you pay taxes on that profit, which you then report on your personal tax return. The forms are simple enough so there are no problems for LLC owners. At the same time, accounting becomes much simpler than that of corporations.

Idaho LLC Annual Reports

Every year, all Idaho businesses (e.g. corporations, LLCs, and nonprofits) are required to file an Idaho Annual Report with the Secretary of State. The report form is simple and includes the following information:

• LLC name;
• Idaho business file number (check Idaho Business Database);
• Principal address;
• State where your company was initially formed in;
• Old Idaho business file number (if any);
• Name and address of your registered agent;
• Information about the officer, director, member, or manager (include the name, title, and mailing address);
• Signature and position of the person filing the report.

The easiest way is to file the report online on the Secretary of State's website through the Idaho SOSbiz service. This way, the form will already be filled out - you will only need to confirm or update the necessary information.

If you wish, you can also print the form and send it by mail, or take it to the Idaho Secretary of State's office in person.

There is no fee for the annual report in Idaho and there are penalties for not sending your report on time. However, if you fail to file your annual report within 60 days of the deadline, your company can be automatically shut down.

Look up your company profile here to make sure you don't miss your deadline. A quality registered agent service can help you with this. In addition to standard mail receiving and forwarding services, many registered agent firms will also send you timely reminders about your annual reports.

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