This guide on how to start an LLC in Idaho provides a view on the necessary points to address before you start a company. But then again, starting an LLC is only a job half done. So, we’ll also look at a few steps that will keep you in good standing with the state and possibly also save a lot of trouble.
An LLC in Idaho is an excellent way to give wings to your entrepreneurial dreams. But that’s not the only purpose of LLCs. They also find use in asset management and can hold assets like real estate, vehicles, etc.
So, let’s get started with the details on starting an Idaho LLC.
1. Picking A Name For The Idaho LLC
Naming for your LLC in Idaho has to follow some guidelines and requirements from the state. For one, the chosen name should be unique and distinguishable when compared to other entities registered with the state. This means that while two entities can’t have the same names, they can’t have confusingly similar names either.
Additionally, some restricted words cannot be used in the naming of LLCs in Idaho. These can include words that are vulgar, offensive, or those that could misrepresent the functioning of the LLC. For example, the name can’t include words like attorney, bank, or corporation.
Once you have an understanding of these requirements, you can check the Idaho Secretary of State’s business name database. This will give you a good idea of the availability of the name you’ve chosen. Once you pick a name, it’s worthwhile to search the USPTO website for possible trademark issues.
LLC Name Designators In Idaho
Idaho requires every LLC to have a proper designator at the end of its name. The accepted designators are:
- Limited Liability Company
- Limited Company
As you probably know already, LLC is the most commonly used designator. Although you may use the others as per your requirement.
Name Reservation Request (Optional)
Idaho allows name reservation for up to 120 days (4 months) without completely forming an LLC/business entity. Name reservation requests can be filed online through the sosBIZ system or by submitting the form for Application for Reservation of Legal Entity Name through mail.
The base filing fee is $20 (when filed online). Filing through mail incurs an additional $20 cost (taking the total to $40). This additional charge is the fee for manual processing.
2. Appointing A Registered Agent
Every LLC in Idaho must appoint a registered agent for service of process. This person/entity is responsible for receiving legal documents like lawsuits and summons on behalf of the LLC. As such, the registered agent must have a physical street address in the state of Idaho. PO Box or similar addresses are not accepted.
The following can be your LLC’s registered agent in Idaho:
- A person who is a resident of Idaho
- A business entity that is allowed to do business in the state and has an office there
Many people choose to go with the second option by means of hiring a commercial registered agent for fulfilling the required role.
Idaho Secretary of State maintains a list of Registered Agents in the State.
3. Filing The Certificate Of Organization
The Idaho LLC Certificate of Organization is analogous to the Articles of Organization used in several other states. An LLC comes into existence in Idaho once the Secretary of State approves its Certificate of Organization.
Idaho Certificate of Organization can be filed online, via mail, or by visiting the office.
Filing by mail is often the better option and the state seemingly prefers it as well. You can file for the Certificate online by using the Idaho sosBIZ system. The cost of filing the form online is $100.
To file via mail or by visiting in-person, you’ll have to download and fill the Certificate of Organization Limited Liability Company form from the SoS website. Once the form is ready, you can mail it or deliver it to:
Office of the Secretary of State
450 N 4th Street
PO Box 83720
Boise ID 83720-0080
The filing fee is $120, this includes the $100 fee for the Certificate of Organization and a $20 charge for manual processing. When filing via mail, include a check or money order payable to the Idaho Secretary of State.
You can request expedited services at an additional cost of $40. Expedited service with same-day processing is available for an additional charge of $100.
4. Set Up An Operating Agreement For Your ID LLC
As with most other states, an Operating Agreement is not a legal requirement in Idaho. However, it is highly recommended for all ID LLCs to get an operating agreement. The operating agreement is an internal document of the LLC and lays the groundwork for the operation and management of the company.
While this agreement isn’t filed with any government agency, it shows that the LLC is being managed professionally and correctly. That may come in handy if your company ever finds itself in court.
Besides, the agreement forms a clear understanding of the roles and responsibilities of members in multi-member LLCs. While it may not offer the same role for single-member LLCs, they should get an agreement too.
5. Getting A Federal Tax ID Or EIN
In some circumstances, single-member LLCs that don’t have any employees don’t need an EIN. However, multi-member LLCs must have an EIN. Getting an EIN is beneficial for any company.
Besides tax purposes, it is also useful for the day-to-day operations of the company, like opening a business bank account, building credit with vendors, and more. Sometimes, it is also likened to an SSN for a business entity.
EIN (Employer Identification Number) is a federal tax ID issued by the IRS. There is no filing fee for requesting an EIN. However, you should only apply for an EIN after your Idaho LLC Certificate of Organization has been approved by the Secretary of State.
The easiest and quickest way to get an EIN is by filing online. In case online filing is not possible, you’ll have to download and fill Form SS-4. This form can be filed with the IRS via fax or postal mail.
6. ID LLC Annual Reports
Idaho LLCs don’t have to file annual reports. This makes things easier by removing a bureaucratic requirement that most states have. However, make sure that the state always has the correct information about your business, including things like the address of the registered agent, office of the LLC, and so on.
7. Business Licenses, Permits, And Taxation
Specific business licenses and permits generally depend on two factors:
- The county/city of operation for your LLC
- The industry of the LLC
The county/city may have specific requirements for businesses to operate, so it’s best to contact the local government to stay in compliance. As for industry of operation, state or even federal requirements may be necessary for some sections or niches.
State taxes in Idaho can be somewhat complex. Unless you’re well versed with the requirements, it can be fruitful to hire a professional to handle tax requirements for your business. Things like the State Business Tax require registration with the Idaho State Tax Commission (STC).
For federal taxation, LLCs are usually pass-through entities. Even though you can file income from the LLC as part of your returns, the forms required may vary depending on how your LLC is structured. Similarly, taxation requirements can vary if you choose to have the LLC taxed as an S-corp or C-corp.