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:
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.
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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.
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:
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:
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:
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:
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.
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:
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:
The disadvantages of being your own RA are as follows:
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.
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:
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).
Office of the Secretary of State
450 N 4th Street
PO Box 83720
Boise ID 83720-0080
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:
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.
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.
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:
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.
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:
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.
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:
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:
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.
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:
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:
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.
In Idaho, not all LLCs are required to pay taxes - a lot depends on your type of business. The most well-known taxes are:
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:
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.
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:
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.
A limited liability company is a welcoming legal structure for many businesses. Start an LLC is easy. Select your state to start.