Having an Idaho LLC is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in Idaho.
On this page, you’ll learn about the following:
- How to Start an LLC in Idaho
- After Starting your Idaho LLC
- Idaho Foreign LLC
- Why an LLC in Idaho
- Top 3 Businesses in Idaho
- Idaho LLC Formation Review
How to Start an LLC in Idaho
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. This section gives you a step-by-step guide on how to start an LLC in Idaho.
Step 1: Decide a Name for Your LLC
Deciding on a business name is the first step to start an LLC. In Idaho, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the Idaho business naming requirements. Once you pass through them, you can successfully name your business.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face many issues by avoiding focus on choosing a business name for their LLC business formation filings.
Here are some of the major benefits of choosing the best LLC names.
- Helps establish a company’s presence in the market;
- Creates a new identity that will resemble your LLC;
- Allows ease in finishing your LLC registration process;
- You can get the EIN once you have your name registration certificate
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, Idaho. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in Idaho. The cost of a name reservation is $20.
Important Quick Links:
Office of the Secretary of State
450 N 4th Street
P.O. Box 83720
Boise, ID 83720-0080
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Step 2: Assign a Registered Agent in Idaho
A registered agent for service is your authorized person or business entity that will act or work on your behalf. This person or business will receive significant tax forms, legal forms, legal papers, an internal document, a notice of lawsuits, and other official government correspondence in Idaho. Choosing an Idaho registered agent for your LLC is required. These professional service providers will be responsible for handling all the official government documents from a government agency.
Make sure your registered agents are residents of Idaho. They must have a physical street address in the state. That means their principal address must be from Idaho. It could also be a business. Here are the recommended agents:
Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Idaho. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Certificate of Organization in Idaho
A Certificate of Name Reservation is needed to file an Idaho Certificate of Organization, which costs $100-$120. You need to make reports of this certificate with the Idaho Secretary of State. You may file them online or by mail. LLC cost in Idaho includes expedition charges as well.
This Certificate of Formation is a legal document that forms your business officially. It will indicate details about your LLC in Idaho, like if it is a member-managed or managers-managed.
Before you start filing your forms, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Idaho LLC will offer. The processing time in online filing is less than by mail.
How to File Online
Go to the Secretary of State Online Service. Create an account. Once you’re done with the account, fill out the form for the Certificate of Organization and submit it. To know more about online filing, visit the Idaho Certificate of Formation.
How to File by Mail
If you prefer filing real-life forms for your Idaho LLC registration, then you can download the Idaho Limited Company Certificate of Formation. Read the form thoroughly and fill it out. It will have to fill, among others, your name, city, state, zip code, and signature. You may also file in person by visiting the office on business days.
Mail To: Office of the Secretary of State
450 N 4th Street
P.O. Box 83720
Boise, ID 83720-0080
Step 4: Create Your Idaho LLC Operating Agreement
An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to an LLC operating agreement Idaho does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve Idaho LLC later.
Step 5: Filing a Idaho LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Idaho LLC requires specific rules and regulations. One should know about them before hiring employees. EIN for Idaho foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
And that’s all! Congratulation, you are now done with all the necessary steps to form your Idaho LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
After Starting your Idaho LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Idaho business permits & licenses
- Get liability for business and professional liability insurance with coverage for employees
- File a Idaho LLC annual report or biennial report
- Already existing LLCs that wish to operate in Idaho must register as Idaho foreign LLC.
This page has provided you with broad steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Idaho Foreign LLC
To register an Idaho foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, Idaho. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check Idaho Foreign LLC to know more about having a foreign LLC.
Why an LLC in Idaho
Idaho limited liability company comes with a set of benefits. Along with the reduction in tax liabilities, LLCs will get a business funding option to run a successful business. The state has a one-time cost of filing. Apart from the filing fee, there are some federal taxes, and employment tax if the LLCs hire employees. Idaho is a desirable state to have an LLC as businesses get potential customers. Other than a few taxes, the state of Idaho does not have many annual costs.
LLCs do not have a business income tax, but the members have to pay personal income tax. Some of the key benefits of having an LLC in Idaho are below,
While starting an LLC, everyone tries out different ways to save money, and the biggest of them is tax saving. This tax saving will be provided by Idaho LLC very efficiently. Read more on Idaho’s classification of LLC tax.
Along with the division of the taxes into various slabs, the slab rates are lower than in other states. This will help in alleviating the gross business income of the members of Limited Liability Corporation. The property taxes are the second-lowest in Idaho which is attracting many businesses.
Robust State Budget
Budgeting of the state is not directly linked with the business incorporation, but indirectly it affects many aspects of a business. We all know that the only way through which government earns money is through taxation. Now, if the government lacks funds, then the taxes ought to increase a bit. But the same is not in the case of the Idaho government. The state budget is stable, having a strong past track record due to which it is not affecting the business in any way negatively.
Due to their strong budgeting, they also keep a thing of how they can increase the rate of projected jobs, and they are ranked number three in increasing the rates of jobs.
The opportunity is a factor on which the future of the business depends. In Idaho, these opportunities are available in abundance. The environment is there may be competitive, but it pushes every LLC member towards their positive growth. This makes the economy of Idaho growth-oriented and helps out people grow. An example of the most significant opportunity is export. So, if you are somewhere related to export, then start an LLC in Idaho without wasting any bit of time.
LLC Member Enjoy Independence
In case the LLC has different partners, and one of them dies, then due to that, there will be little to no effect on the other LLC members. The functioning of Idaho LLC will be the same as it was before. This shows that no matter what happens to one stockholder, the other’s life and the business will remain unaffected.
Top 3 Businesses in Idaho
To form an LLC in Idaho is the best decision, but only in one situation. It would be best if you had a good business idea in your mind. To help you out in your journey looking for the best businesses in Idaho, we are here to help. Here is a list of the best businesses in Idaho.
Potato Cultivation and Processing
The state of Idaho is very well known for its potato production as the state’s soil offers the best environment for the crop to grow. More than 311,000 acres of potato is used for potato farming which produces around 15 billion pounds of potato. Due to such a huge industry, the demand is manufacturing units that can convert raw potato into a valuable product.
There are many industries related to potato product manufacturing to exporting, which you can decide from.
Many famous chemicals named benzylamine, calcium hydroxide, morpholine, etc., are produced in the state. Many milestone companies like Redox Chemicals and Argon Bio-energy registered in the state, responsible for the country’s major chemical production. Moreover, with the increasing advancements, the demand for chemicals is increasing, for which more products and companies are required.
Wood and Lumber Production
Based on the recently launched data, the Idaho state’s wood industry contributes around 6.8% to the manufacturing GDP of the state, which is increasing continuously. Idaho’s paper industry is fulfilling the demand of its nearby states because of a dense forest cover in the state. Moreover, the state has the latest emerging technology due to which the waste of trees is better utilized in paper production, which can be the best business idea to opt for.
If you are thinking of investing less money, then you can opt for the following businesses.
- Tutoring business
- Advisory Firms
- Printing Business
Idaho LLC Formation Review
Time needed: 5 minutes.
To recap, here are the easy basic steps again when forming an LLC in Idaho. Click on the steps in this list to read the full detail.
- Name your Idaho LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a registered agent
In Idaho, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict formation requirement but something encouraged when you start an LLC.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
How Fast Can I Form an LLC in Idaho
If you are wondering how fast you can form an LLC in Idaho, you aren’t alone. There are plenty of other small business owners who are wondering the same thing. There are several advantages to filing for LLC in Idaho. First, you won’t have to worry about hiring a lawyer. The entire process is fairly easy. You simply fill out the appropriate forms and file them with the appropriate agencies. Once you’ve filed your LLC paperwork, you can focus on growing your business.
The next step in forming an LLC in Idaho is choosing a name. An LLC name must contain the phrase “limited liability company” or one of its abbreviations. It must also be unique and not confuse any government agency. Some names are restricted and require additional paperwork or a licensed individual to become a member. To find the name you want, visit the State of Idaho’s website. By doing so, you can easily choose a name for your business.
Another benefit of hiring a registered agent is peace of mind. It will be easier to make decisions about who to hire and how much to spend. An Idaho LLC will need to file an annual report by the end of the month in which it was formed. If the name of the company conflicts with any other registered names, it will have to file a certificate of dissolution. In addition, every Idaho LLC needs a registered agent to receive any legal notices from the state.
If you are a resident of Idaho, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $100 (domestic LLC) and $100 (foreign LLC), LLC costs in Idaho do not include fees for Annual Reports, it is free. LLCs are liable to pay sales tax of 6% every year.
It takes 7 to 10 business days to get an Idaho LLC if you file it online or via mail.
Every year all the LLC have to submit an Annual Report for free to the Idaho Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start their LLC in Idaho at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, leave a comment below.