Are you about starting a business in Idaho and you want to form an LLC? If YES, here is how much it cost to form an LLC in Idaho and the requirements. If you want to form an LLC in Idaho, you are required to file the Certificate of Organization with the Secretary of State, which costs $100 – $120.
You can apply online, by mail, or in person. The Certificate of Organization is the legal document that officially creates your Idaho Limited Liability Company. Please note that in order to do business in Idaho, all LLCs organized outside of the state must register with the Idaho Secretary of State.
Foreign LLCs must appoint a registered agent for service of process physically located in Idaho. To register, file a Foreign Registration Statement (Limited Liability Company). The form must be accompanied by a Certificate of Existence or Certificate of Good standing from the LLC’s home state, dated within 90 days from the date of filing. The form may be filed online or by postal mail. The filing fee is $100 ($120 for filings by mail).
How to Form an LLC in Idaho in 12 Steps
Here are some steps you would have to follow if you want to form an LLC in Idaho;
Table of Content
- STEP 1: Choose A Name for Your Limited Liability Company (LLC)
- Step 2: Appoint A Registered Agent in Idaho
- Step 3: Prepare and File the Idaho Articles of Organization
- Step 4: Create an Operating Agreement
- Step 6: Idaho LLC Annual Report and Personal Property Tax Return
- Step 8: Sort Out Taxes
- Step 9: Open Your LLC Bank Account
Choosing a company name is the first and most important step of forming an LLC in Idaho. Be sure to choose a name that complies with Idaho naming requirements and is easily searchable by potential clients. Please note that you may reserve a name for up to four months by filing a Reservation of Legal Entity Name with the Secretary of State. You may file online or by postal mail. The filing fee is $20 ($40 for filings by mail).
Follow the naming guidelines:
- Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
- Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
- Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
- Your name must be distinguishable from any other Idaho limited liability company, corporation, or limited partnership.
For a complete list of naming rules in Idaho, you can read the State Corporation Commission guidelines.
- Is the name available in Idaho? Make sure the name you want isn’t already taken by doing a Business Entity Search on the State of Idaho’s website.
- Is the URL available? We recommend that you check online to see if your business name is available as a web domain. Even if you don’t plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.
Please note that you don’t have to use your LLC’s official legal name registered in your Certificate of Organization when you do business out in the real world. Instead, you can use an assumed business name, also called a fictitious business name, “DBA” (short for doing business as), or trade name.
To do so in Idaho, you must register your assumed name with the Idaho Secretary of State. You register by filing a Certificate of Assumed Business Name online or by postal mail. There is a $25 filing fee ($45 for filings by mail). Registration is mandatory, but does not confer ownership rights.
Step 2: Appoint A Registered Agent in Idaho
Next, you are required to choose a registered agent for your L.L.C. in Idaho. Every Idaho LLC must have an agent for service of process in the state. In Idaho, this is called a registered office (most other states require a registered agent).
A Resident Agent is the person or company who receives your LLC’s documents, notices and legal mail (called Service of Process). Because of this, the Resident Agent must have an actual street address in Idaho (PO boxes are not allowed by the state). Picture your registered agent as your company representative to the state.
It is important to note that not everyone can be a registered agent. For a person to be eligible to become a registered agent, the person or corporation must be a resident of Idaho. That is to say, the individual or corporation must have a physical address within the state.
If any member knows the ropes of being a registered agent, you may elect him or her rather than hiring one. This will help you save some dollars, especially if you are running a small business. However, hiring a seasoned registered agent offers tons of benefits like privacy and peace of mind.
Please note that you, your friend or family members or a commercial resident agent are qualified to be your LLC’s Resident Agent.
Step 3: Prepare and File the Idaho Articles of Organization
To register your Idaho LLC, you will need to file the Articles of Organization with the State Corporate Commission. You can apply online or by mail. Some states refer to the Articles of Organization as the Certificate of Formation or Certificate of Organization.
The Idaho Articles of Organization for an LLC (limited liability company) is a legal document to officially form your business. It contains information such as the name of the LLC, the name and address of the registered agent, and the state filing fee.
After you file the Articles of Organization, we recommend you obtain an Employer Identification Number (EIN) if you plan to hire employees and open a business bank account. An Idaho LLC is created by filing by Articles of Organization with the Idaho Secretary of State. The articles must include:
- the type of LLC–regular LLC, professional LLC, Series LLC, or Professional Series LLC
- the LLC’s name
- the LLC’s registered agent’s name
- the mailing address of LLC’s principal office
- whether the term of the LLC is perpetual or for a specific time period
- the LLC’s purpose (if a professional LLC, the professional service must be specified; for a professional limited liability company, at least half of the managers must be qualified persons with respect to the limited liability company)
- whether the LLC is a tribal business
- whether the LLC will be member-managed or have a manager and the name and address of at least one member or manager
- if one or more members are liable for the LLC’s debts and obligations, a list of liable members and written consents of each, and
- the signature of applicant.
You must also include the name and address of at least one “governor,” which is a manager in a manager-managed LLC or a member in a member-managed LLC. The articles may be filed online or by postal mail. The filing fee is $100 ($120 for filings by mail). Please note that if you’re expanding your existing LLC to the State of Idaho, you will need to form a Foreign LLC.
Step 4: Create an Operating Agreement
An LLC operating agreement is not required in Idaho, but is highly advisable. This is an internal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed.
It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates. If an operating agreement is created, it need not be filed with the Articles of Organization.
An Operating Agreement lists the rights and obligations of the members of the LLC. These include rules on how the LLC should be run, how taxes are to be paid, and how profits / losses are to be shared among the members. The Operating Agreement also contains the list of members of your LLC and how much their stake is in the business. Even if you have a Single – Member LLC (you’re the only owner), it’s still best practice to have an Operating Agreement.
Please note that it is not mandatory to send the Operating Agreement to the Idaho State Department of Assessments and Taxation, or to any other state agency. Just give a copy to any necessary members and keep a copy with your LLC’s business records.
The bottom line is that, in case your LLC is sued, having an Operating Agreement shows that your LLC is operating properly. This helps maintain your personal liability protection.
Step 5: Acquire an Employer Identification Number
An EIN is sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN) is a 9 – digit number similar to a social security number. The Employer identification number will be used to identify your business. It is like a social security number for your company.
An Employer Identification number is essential because you will need it to open a business account for your company, to hire employees as well as tax purposes. You can obtain your E.I.N. from the I.R.S. after creating your company. You can do it via mail or online. Note: It won’t cost you a dime to get an E.I.N. from the I.R.S.
You can obtain an EIN from the IRS either
- Via mail (approval takes 4 weeks)
- Via fax (approval takes 4 business days)
- Via online application (approval is instant at the end of the application)
Step 6: Idaho LLC Annual Report and Personal Property Tax Return
Additional tax and regulatory requirements may apply to your LLC. These may include:
If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online EIN application on the IRS website. There is no filing fee.
Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses.
Department of Revenue
In some cases, for example if you have employees or will be selling goods and collecting sales tax, you’ll need to register with the Idaho Department of Revenue (DOR). (Idaho also has other LLC-related taxes and DOR filings not covered here.) In many of these cases, the process starts by registering online through the Revenue e-Services Centre or mailing in Form PA-100.
Step 7: Securing Business Licenses and/or Permits
The next step you are expected to take is to secure your business license and permits as the case may be. The type of business licenses and/or permits your LLC will need to legally operate in Idaho will depend on its location and the industry it is involved in.
Please note that in order to operate your LLC you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
The details of business licenses and permits vary from state to state. Make sure you read carefully. Don’t be surprised if there are short classes required as well. Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain. To find out more, contact your local agencies in the city, town or county where your LLC is located.
Step 8: Sort Out Taxes
LLCs have “pass through” taxation. Profits or losses flow through to your personal tax return and are usually listed on a Schedule C.
State and local taxes
Idaho LLCs must register and pay taxes with the PA Department of Revenue, as well as your local municipality (city, town, county, etc.). Depending on the nature of your business, you may be required to register for one or more forms of state tax.
If you are selling a physical product, you’ll typically need to register for a sellers permit through the Idaho Combined Registration Online Application website. This certificate allows a business to collect sales tax on taxable sales.
Sales tax, also called “Sales and Use Tax,” is a tax levied by states, counties, and municipalities on business transactions involving the exchange of certain taxable goods or services.
If you have employees in Idaho, you will have to register for the Unemployment Insurance Tax, and the Employee Withholding Tax through the Idaho Department of Labor, Licensing, and Regulation.
Step 9: Open Your LLC Bank Account
In order to keep your business finances apart from your personal finances, it is advisable that you open a separate bank account for your Idaho LLC. It will indeed help you maintain your personal liability protection. A separate bank account helps maintain your liability protection and it also makes business accounting and taxes a lot easier.
The items needed to open an account in Idaho are your approved Articles of Organization, EIN Confirmation Letter from the IRS, and your driver’s license or passport. We also recommend calling the bank ahead of time to find out if additional documents are required.
Look for free business checking: Call a few banks in Idaho and take down notes for comparison. Some banks charge monthly maintenance fees for your LLC’s checking accounts, others don’t.
A debit card for your LLC will be issued when opening the account.
If you want to start building business credit for your Idaho LLC (or get travel and cashback rewards), you can get a credit card or two for your LLC. We recommend using creditcards.com to find a business credit card.
Step 10: Apply and Obtain Your Business Phone Number
Instead of using your home telephone number or your cell phone, you can purchase an affordable “virtual business number” specifically for your Idaho LLC. You can set this virtual business phone up to forward to your cell phone, go through voice prompts, or configure it any way you’d like. You can check out Phone.com as they have the cheapest plans and their customer service is excellent.
They offer local phone numbers as well as 1-800 toll-free numbers. You can easily setup call forwarding, pre-recorded prompts, and get voicemail messages forwarded to your email. Getting a separate business phone number for your Idaho LLC is also a good idea in order to keep your actual number private from those pesky “public record” websites.
Step 11: File Your LLC Annual Report
All LLCs doing business in Idaho must file an annual report with the Secretary of State. The annual report is due by the end of the LLC’s anniversary month. The Secretary of State sends email reminders one to two months before the report is due. The report must be filed online. There is no filing fee.
Step 12: Hiring of Employees
Of course, registering an LLC means that you will need employees and in order to get it right as regard hiring employees, then you should ensure that you stay on the side of the law and here are some steps you should follow:
- Verify that new employees are able to work in the US
- Report employees as “new hires” to the State
- Provide workers’ compensation insurance for employees
- Withhold employee taxes
- Print compliance posters and place them in visible areas of your workspace
Lastly, ensure that you find out more information from the Idaho Department of Labor, Licensing, and Regulation website.
After you have successfully formed your LLC in Idaho and you are up and running, you should ensure that you apply and obtain a Certificate of Good Standing
A Certificate of Good Standing, known in Idaho as a Certificate of Status, verifies that your LLC was legally formed and has been properly maintained. Several instances where you might need to get one include: Seeking funding from banks or other lenders, forming your business as a foreign LLC in another state and Obtaining or renewing specific business licenses or permits.
N.B: Even after forming your LLC in Idaho, there are still some things you need to put in place before you commence operation. Please, note that the information in this article is provided only for general purpose and it is no way a legal advice. No lawyer-client relationship is established or should any such relationship be assumed. For legal advice, please consult a professional lawyer.