How to Start an LLC in Idaho

The thought of creating an Idaho limited liability company (LLC) can seem a little scary at first. But with a bit of help, you can start a new business in no time!

Read on to learn:

• The steps you must follow to form an Idaho LLC
• Important tasks to handle after you register an LLC
• How much it costs and how long it takes to start an LLC in Idaho

This article will teach you everything you need to know about your Idaho LLC formation.

Last updated: Sep 2024

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Step 1: Name your Idaho LLC

Before you can start an Idaho LLC, you’ll need to choose a name for your business. Idaho law has certain restrictions when it comes to LLC names. While some words are prohibited, others are mandatory.

We’ve broken down the rules in further detail below.

Words You Have to Use

Idaho Statutes Section 30-21-302 says that every LLC name must include one of the following identifiers:

• “limited liability company”
• “limited company”
• “L.L.C”
• “LLC”
• “L.C.”
• “LC”

The statute also allows “limited” to be abbreviated as “ltd.” and “company” as “co.”.

Words You Can’t Use

Under Idaho Statutes Section 30-21-301, your LLC name can’t state or imply that it’s affiliated with the government. You also can’t suggest that your business sells illegal goods or services. For instance, if you do not have the proper license to provide a particular type of service, your LLC’s name can’t imply that those services are offered.

Section 30-21-301 also says that your Idaho LLC name must be “distinguishable” from all of the other registered business names. This rule was created to keep people from getting confused by two companies with the same name.

Research the LLC Name You Want

Once you’ve decided on a name, you can use the Idaho Secretary of State’s Business Search to check if it is available.

If your chosen LLC name is already taken, you can’t use it unless you get a court order establishing your right to do so. But, if the name you want is registered to a different type of business entity, you can still use it if the other party consents.

If the name you want is available, Idaho Statutes Section 30-21-303 allows you to reserve it for 120 days. You can reserve your name by filing an Application for Reservation of Legal Entity Name with the Secretary of State. There is a $20 filing fee.

If you choose to submit a paper form, you must mail or hand-deliver it, along with a $40 check, to the following address:

Idaho DBA: Using an Assumed Business Name

LLC owners often choose to use a “doing business as” or “DBA” name rather than their company’s full name. A DBA is an alternate name that allows you to refer to your business by a different name than what is legally registered.

For many businesses, a DBA is a way to “go by” something less formal. As you then grow and specialize in different business segments, you may also want to change your DBA for branding reasons.

Idaho calls DBAs “assumed business names.” If you want to use a DBA for your LLC, Idaho Statutes Section 30-21-805 requires you to file a Certificate of Assumed Business Name with the Secretary of State. 

You can register your DBA online, in person, or by mail. There is a $25 filing fee for online submissions and $45 total in fees for papers forms.

Step 2: Appoint a Registered Agent for your LLC

Registered agents are people and businesses that agree to accept legal documents for LLCs and other entities.

Idaho Statutes Section 30-21-402 says that all LLCs must have a registered agent in the state. Your agent needs to have an Idaho office and be available during normal business hours to receive service of process.

In Idaho, you can choose to use a commercial or a non-commercial registered agent. While anyone can be a non-commercial agent, commercial agents must register with the Secretary of State and be “in the business” of serving as an agent.

Choosing who is the registered agent for your LLC is an important decision. Many first-time LLC owners think it makes the most sense to name themselves. And there are some benefits to this arrangement:

• It’s cheap: You’re not paying someone else to do it for you.
• It’s easy: The only address and contact information you have to keep current is your own.
• It’s reliable: You will receive all important documents personally.

Unfortunately, business owners often learn the hard way that being your own registered agent can cause serious problems.

Here are some of the issues you might face:

• No privacy: Your name and address will be published on the Secretary of State’s website. This means that anyone with an internet connection can find your personal information.
• Junk mail/spam: You will get a ton of junk mail in addition to a small amount of real mail and any service of process.
• No breaks: You also must be available at all times during regular business hours to receive documents. This means no vacations, sick days, or leaving the office for lunch.
• Business interruptions: Client meetings can be interrupted by people serving process. That could be embarrassing or hurt your reputation.
• It’s your fault if you miss something: You always have to make sure your address is correct and up to date. If you make a mistake or miss something, you are held responsible.

Instead of doing it yourself, we suggest that you give a professional registered agent service a try. They’ll let you know when any new documents come in, and it costs only about $100 per year.

If you are thinking of expanding your business to other states and need to register as a foreign LLC, it’s a good idea to choose a nationwide registered agent service. That way, you only have to deal with one company for everything, even if you need agents in more than one state.

Step 3: File Your Idaho LLC Certificate of Organization

A certificate of organization is a legal document that includes basic info about your LLC. To officially start an Idaho LLC, you must file a certificate of organization with the Secretary of State.

What to include in my Idaho Certificate of Organization?

Idaho Statutes Section 30-25-201 says that your certificate of organization must list:

• The LLC’s name.
• The address of the LLC’s principal office.
• The name and address of the registered agent.
• The name and address of at least one LLC governor.

If you are using a commercial registered agent, you only need to list their name. But if you’ve chosen a non-commercial agent, be sure to also list their address.

You can submit your certificate of organization by mail, in person, or online.

Idaho LLC Filing Fee

The filing fee for an Idaho LLC certificate of organization is $100 if you file online or $120 total if you file a paper form.

Read More: How Much Does It Cost to Form an LLC in Idaho

Idaho LLC Processing Time

Standard processing times usually range from 7 to 10 days. However, you can request expedited service for an additional $40 fee or same-day service for a $100 fee.

Step 4: Draft your Idaho LLC Operating Agreement

An operating agreement is a legal contract that controls how an LLC will function. It also establishes each member’s rights and duties.

Idaho law doesn’t require LLCs to make an operating agreement. Still, you’ll find that it can help significantly in running the company. It can also help avoid disputes in the future.

For instance, if a member wants to sell their share of the LLC, they would follow the steps in the operating agreement. The contract can also describe how to reassign their duties once they’re gone.

Some other reasons operating agreements can help include:

• They determine the rights and duties of LLC members. If one LLC member is responsible for running the business or managing the books, the operating agreement should say so.
• They say what the manager has the right to do. Managers also have special duties to the company and the members. The LLC operating agreement should state these.
• They outline what the LLC is legally able to do. The operating agreement should also set down how the company is allowed to conduct its business from day to day.
• They say how new members can join the company. They also have rules about how exiting members can leave.
• They set down how and when profits are paid to members. They can also create different types of membership and payment schemes.
• They say whether members or managers are in charge. They also say how to hire and fire managers.
• They say how and under what circumstances the LLC should end. You might not want to dissolve your business entity now, but you might in the future. It’s best to think about it and plan before it becomes an issue.
• They say how to change the rules. You may need to amend your operating agreement in the future. The operating agreement should set down the rules for making changes.

When creating an Idaho LLC operating agreement, all owners should be involved. This will make sure everything is clear from the start and reduce potential conflicts among the members.

Idaho’s rules for LLC operating agreements can be found in Idaho Statutes Section 30-25-105.

Step 5: Get an EIN (Employer Identification Number) for Your Idaho LLC

An Employer Identification Number (EIN) is a tax-ID number issued by the IRS. This 9-digit number can be used to identify your LLC just as an SSN identifies a person.

Here are the most common times when you need an EIN:

• Does your LLC have more than one member?
• Does your LLC have any employees?
• Is your LLC taxed as a C corporation or S corporation?

If the answer to any of these questions is yes, your LLC must get an EIN.

Single-member LLCs can file tax returns with the owner’s SSN. However, you should still get an EIN so you can open up a business bank account. Also, an EIN will help protect against identity theft and make some admin processes easier.

You can get an EIN on the IRS website or by mailing in a Form SS-4. If you go with the online option, you will have your new EIN within seconds.

It is always free to get an EIN. So, you should never pay a service fee to get one.

Read More: How to Get an Employer Identification Number in Idaho

First Tasks After Registering your Idaho LLC

Registering an Idaho LLC is a great way to get started with your business. But to make sure you’re fully protected and prepared, we recommend you take a few extra steps.

Open a Business Bank Account

Your LLC isn’t legally required to have its own bank account. But, opening an LLC bank account will allow you to keep all of your company finances separate from your personal funds.

Here are some of the benefits of having a business bank account:

• Convenience: Keeping things separate makes your LLC’s bookkeeping much simpler.
• More business opportunities: Your LLC can only receive credit card payments through a business bank account. You can also do business with people who won’t take personal payments.
• Personal asset protection: Mixing your personal and business funds could cause you to be held responsible for the LLC’s debts.

The third advantage, personal asset protection, is critical.

Generally, an LLC is considered to be a separate legal entity from its owners. For this reason, your LLC’s creditors can’t access your personal assets for business debts. This is known as the “corporate veil.”

Opening a separate business bank account can help you avoid “commingling” your personal and business finances. If you treat the LLC’s money like it is your own, the corporate veil can be “pierced” in a lawsuit. This would allow you to be held personally liable for your LLC’s debts.

That’s why keeping your business and personal funds in separate accounts is so important. A business bank account can help you maintain this separation and protect your personal assets.

Get Business Insurance For Your Idaho LLC

When starting an LLC in Idaho, you should consider purchasing business insurance. Investigating several different types of coverage will help you find an option that will best suit your company’s needs.

Some of the most common types of business insurance include:

• General liability insurance: You’ll need this if there’s an injury on your property. It pays for damages and a lawyer if you need one.
• Commercial automobile insurance: This works like your own car insurance. It covers drivers and vehicles for your business.
• Workers’ compensation insurance: Idaho law requires most employers to obtain workers’ compensation insurance coverage. You can choose to buy a policy from a private insurance company or get approved to self-insure.
• Commercial property insurance: This protects your property in the event of damage. Keep in mind that flood insurance is often a separate policy.
• Professional liability insurance: Lawyers, doctors, architects, and other professionals need this insurance. It provides coverage and legal defense in the event of a malpractice case.
• Business income insurance: If you have to close for some time, business income insurance can pay back the loss of income. Policies vary, though. Make sure that you know exactly what kinds of losses will be covered.

Keep Your Idaho Company Compliant

Once you form an LLC, it’s crucial to abide by all applicable laws. For example, certain businesses might need to file taxes or acquire permits. Or your LLC may be required to get a business license or another type of registration.

Make sure you stay up to date with the newest changes in the law to avoid legal issues. It’s essential to stay informed about what you must do to stay out of trouble.

Idaho Business Permits and Licenses

To start a business in certain industries, you’ll need to get a business license or permit. Use the Idaho.gov Business Wizard to find out what is required for your LLC.

Idaho Tax Requirements

Some LLCs in Idaho may also need to pay certain state taxes, such as sales and use tax. If you answer the questions accurately, the Business Wizard can also tell you about the taxes that apply to you. For more information, check out the Idaho State Tax Commission website.

Federal LLC Tax Filing Requirements

LLCs are “pass-through” tax entities. This means they don’t have to pay federal income tax. Rather, LLC profits must be reported on Schedule C of its owner’s income tax return.

You must pay Social Security and Medicare taxes, even if you don’t hire workers. But if you do have employees, make sure that you also withhold payroll taxes from their checks.

Annual Report and other Filing Requirements

Idaho Statutes Section 30-21-213 requires LLCs to submit an annual report to the Secretary of State. You can file online or file by a paper form in the Idaho Secretary of State’s office. There is no filing fee for your annual report.

Idaho Business Formation Quick Links

• Internal Revenue Service — apply for an EIN online
• IRS information regarding the federal tax treatment of LLCs
• Business Search (SOS)
• SOSBiz (SOS)
• Business Wizard
• Registering a Business in Idaho
• Idaho State Tax Commission

Statutes:

• Name Requirements: Idaho Statutes Section 30-21-302
• Additional Name Requirements: Idaho Statutes Section 30-21-301
• Name Reservation: Idaho Statutes Section 30-21-303
• Assumed Business Name: Idaho Statutes Section 30-21-805
• Registered Agent: Idaho Statutes Section 30-21-402
• Certificate of Organization: Idaho Statutes Section 30-25-201
• Articles of Organization: Idaho Statutes Section 30-25-105
• Annual Report: Idaho Statutes Section 30-21-213