If you’re looking for a reliable DIY guide for starting an LLC in Idaho, look no further. Below you’ll find all the information you need to launch your business and handle any associated costs. Follow each step carefully and your LLC will be established and ready to hit the ground running.
That said, the process can be complex, with various filings and costs, so if at any point you need help, you can hire an affordable LLC service – they’ll take care of the paperwork so you can spend more time growing your business.
Recommended: Compare the Top LLC Services
If you’re new to the process of starting an LLC, you might also be unfamiliar with the LLC formation services that are reliable and offer great value – like ZenBusiness. As a reference point we compared them to the two most well known LLC formation services, IncFile and LegalZoom. See our comparison guides for more information:
Step 1: Name Your LLC
What’s in a name? Quite a bit, actually. Your business name is your Idaho LLC’s identity, its personality, its reputation. Find a name that sticks in customers’ minds – while conveying your brand qualities – and you’ve struck gold. A unique, memorable name can draw in new customers and keep existing ones coming back.
Your LLC name is going to appear everywhere: business cards, marketing collateral, websites, legal contracts, bank accounts, invoices, directories, and much more. So be sure that it conveys your product, service, brand, and values.
While you can (and should) be creative with your business name, there are certain state requirements that it must follow.
As you narrow down your name options, make sure that each one contains the words “limited liability company,” or “limited company,” or one of the abbreviations: L.L.C., LLC, L.C., or LC, and avoids language implying any governmental affiliation. It should also be distinguishable from every other business name on record with the Secretary of state, or it won’t be available for use.
If you find that your desired name is unavailable, you may be seeking a way to distinguish it without discarding it completely. Keep in mind that, typically, changing the following components is NOT enough to be considered unique:
- Punctuation and spacing
- Capitalization and special characters
- Prefixes and suffixes
- Articles (“a,” “an,” and “the”)
- Conjunctions like “and,” “but,” and “or”
- Business type designators like LLC, Ltd., Inc., or LP
In short, you can’t simply make small, syntactic changes to distinguish your name. Instead, you’ll need to alter or rearrange the name’s key words.
Consider this: your friend Fanny wants to open a flower shop in Boise, Idaho. The name she wants, Flowers by Fanny, LLC is already in use. So she comes up with a new one: Fanny’s Florals and Design, LLC. This name is similar to the original but includes new words, distinguishing it in the Secretary of State’s records.
Determine if the Name is Available
Of course, you will only need to make distinguishable changes if your name is already taken. Don’t make the mistake of ordering business cards, creating advertisements, and using a name on documents like the Certificate of Organization without first confirming it’s available. Use the Secretary of State’s Business Search to see if there’s an existing business using your desired name.
Maybe you pegged a distinguishable name right away, or maybe it took some modifications, but either way, once you have a unique name, you can lock it down by filing a name reservation.
Optional: Name Reservation
You may have fallen in love with a particular name, but still have some preparation and paperwork to sort out before starting your LLC, and you’re worried that someone will swipe it in the meantime. To calm your nerves, you can reserve that name in Idaho for a total of four months.
Think about Fanny. After making her name distinguishable, she’s ready to make it official, but if she’s waiting on some paperwork to start her LLC, she can place a hold through the Secretary of State’s SOSBiz page. Click “Forms” on the left side, then scroll down to find the “Application for Reservation of Legal Entity Name.” You will need to create an account if you don’t already have one. The electronic form costs $20, and you can pay through the online portal and an extra $20 for expedited processing.
If you prefer paper forms, you can also file by mail or in person. Download and complete the application, then mail or hand-deliver it to:
Office of the Secretary of State
450 N 4th Street, PO Box 83720
Boise ID 83720
Hard copy submissions cost $40 and are processed in 7-10 business days, although you can request expedited service for an additional $20.
Name reservation filed online – $20/regular processing or $40/expedited processing
Name reservation filed with hard copy – $40/regular processing or $60/expedited processing
Step 2: Choose a Registered Agent
Fanny’s LLC is quickly taking shape, and if it’s going to operate in Idaho, she’ll need a go-between for state and legal communications. This is called the registered agent.
A registered agent is a key component of your budding LLC, handling all of its sensitive communication with the state so you don’t have to. According to the Secretary of State’s website, your registered agent is “available during normal business hours at the registered agent’s street address to accept service of process and other notices and documents for your business”.
Taxes, lawsuits, maintenance requirements, and more – the registered agent takes care of it all. If you had to do this yourself, it would pile additional tasks onto your already-full plate. Plus, your agent makes your business available to receive documents even when you’re out of town or away from the office. This is especially important if your physical office is outside Idaho.
But maintaining an agent isn’t just convenient, it’s also required. The Idaho Uniform Business Organizations Code Section 30-21-402 requires all Idaho LLCs to designate one.
Now for the practical application, the “how-to.” All you need to do is list your agent’s name and address on your Certificate of Organization and, after it’s been filed, that information will become part of your LLC’s public record.
You have two options for who can serve as a registered agent: an individual or a company.
Individual as Registered Agent
You may think that an individual registered agent would need specialized training or experience, but this isn’t the case. Anyone can serve as your registered agent, as long as they are an Idaho resident, have a physical address in the state, and are at least 18 years old.
Third parties like attorneys or consultants can be great options, but family members and friends are also valid options. You can even take on the role yourself as long as you don’t mind the added responsibilities.
Registered Agent Service
It can be a lot easier, though, to use an LLC formation service like IncFile or Northwest Registered Agent, so we highly recommend it. Not only will they take care of business formation requirements, but they’ll also include a free registered agent service. Or, if you’d rather start your Idaho LLC on your own, you can use a national registered agent service to cover your agent duties.
During the life of your LLC, you may, at some point, need to change your registered agent. Perhaps you want to switch from an individual to a professional service, or maybe your existing registered agent resigns. Either way, you’ll want to make the change as soon as possible because operating without an agent on file can lead to administrative dissolution.
Step 3: File the Formation Documents with the State
This is where the LLC formation process kicks into high gear. Let’s check back in with Fanny.
She’s reserved her unique business name, designated a registered agent, and she’s ready to get her LLC off the ground. It’s time for Fanny to take on the most important LLC document: the Certificate of Organization. This filing creates a record for Fanny’s Florals and Design, LLC with the Idaho Secretary of State, giving it the authorization to commence business in the state.
You’re free to file the Certificate of Organization either online, by mail, or in person, so you can choose the route that best fits your preferences and timeline.
You can take care of the entire electronic filing process through the Secretary of State’s SOSBiz page. Select “Forms” on the left side of the page, then click “Certificate of Organization Limited Liability Company.” You’ll need to create an account if you don’t already have one. The form costs $100 and you can pay as part of the filing process.
Filing by Mail
Idaho charges a $20 manual processing fee for all hard copy submissions, so your total fee will be $120. Download, print, and complete the paper application, then mail it (along with your payment) to:
Office of the Secretary of State
450 N 4th Street, PO Box 83720
Boise, ID 83720
Live in Boise? If you’d prefer, you can hand-deliver your form to the same address as part of your weekly errands.
Standard processing time for the Certificate of Organization is 7-10 business days, but if you need it done ASAP, you can request expedited service for an extra $20 and your form will be processed within eight working hours.
Step 4: Create an Operating Agreement
The operating agreement is the framework that holds up an LLC, the vital underpinning that establishes processes for its procedures, activities, and conduct. Essentially, it serves as your company’s bylaws.
The state doesn’t require your LLC to adopt an operating agreement, but that doesn’t mean it’s unimportant. On the contrary, an operating agreement is one of the most important business documents you’ll create. It entrenches procedures that optimize your efficiency, protects your assets in legal disputes, and legitimizes your LLC in the eyes of banks, courts, and government agencies.
Let’s say our friend Fanny sells a percentage of her company to two other owners. Her operating agreement could stipulate how the LLC’s assets would be distributed among them in the case of dissolution. But if she decides to maintain sole ownership, the agreement could be used in court as evidence that the LLC’s assets are separate from her personal ones. These are just two examples, but the operating agreement governs everything from member duties to the tax structure.
If you’ve decided to draft an agreement, there are two ways to go about it:
- Write it yourself. Don’t be intimidated by this option. There are plenty of free online templates that serve as helpful guides. You can create an effective document from most of the templates out there, but we recommend this one, courtesy of Northwest Registered Agent. It’s got everything you need to draft a solid agreement.
- Hire an attorney. If you want to be absolutely sure that you don’t miss any important details, an attorney can write or review the agreement for you, ensuring that it complies with state law, includes all necessary information, and avoids the state’s default laws.
What are default laws?
Each state has its own set of generic, baseline laws for how LLCs should operate. These laws, however, only govern matters not included in your operating agreement. Take dissolution, for example. If your LLC ever dissolves, your operating agreement would determine what happens to its remaining assets and debts. But if you fail to include it in the agreement, the state will make that decision for you.
Because default laws are broad and not tailored to your specific business, they often aren’t in your LLC’s best interest, so it’s best to avoid them by being as comprehensive as possible in your agreement.
Step 5: Get an EIN
There’s simply no way to avoid taxes. In fact, it’s illegal to try, so don’t do it.
Federally, LLCs are classified as “pass-through” entities, businesses that don’t file corporate tax returns, but whose owners include income and losses on their individual returns. Still, there are certain circumstances that require LLCs to pay federal taxes, like classifying as a corporation or partnership, hiring employees, or selling merchandise. So, in Fanny’s case, if she plans on hiring additional florists and selling bouquets, she will need to apply for an EIN.
The Employer Identification Number (EIN) is a nine-digit number that the IRS will use to identify your company’s tax accounts, so if you pay any business taxes, it’s extremely important to have one. Click the “Do I need an EIN?” link on this page to see if you fall into this category. If so, apply for an EIN one of three ways:
Need to get this done quick? File online – it’s by far the most efficient method. You can only complete the process between 7 a.m. and 10 p.m. EST, Monday through Friday, but you’ll receive your number immediately upon finishing the digital form. Keep in mind that you will need to provide a valid individual taxpayer number (like a Social Security Number) as part of the process.
You might prefer the feel and security of a paper form. In this case, download Form SS-4, complete it, and fax it to (855) 641-6935. You will receive your EIN within four business days.
Or, there’s always trusty postal mail. However, this is the slowest option, as processing typically takes around four weeks. If that doesn’t deter you, fill out Form SS-4 and send it to:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
Okay, so you’ve filed the Certificate of Organization, designated a registered agent, adopted an operating agreement, and filed for an EIN. Time to start doing business, right? Sorry, there are a couple of additional steps you may need to take first. But don’t worry, you’re almost there!
Step 6: Taxes, Licensing & Income Reporting
For all intents and purposes, most LLCs will be official after completing all the prior steps. Still, it’s important for business owners like Fanny to keep looking ahead, as there are certain maintenance requirements to keep an Idaho LLC running smoothly and in good standing with the state.
Before you start doing business, create a plan for the following potential LLC requirements:
As mentioned earlier, LLCs are almost always classified as “pass-through” entities, which means that they don’t pay income taxes directly to the federal government. That responsibility falls instead on the owners, who must include business income and losses on their personal 1040 tax returns and/or Schedule C. LLCs are flexible with tax structure, so you can choose to have yours taxed like a corporation instead. In this case, it would need to file a separate corporate tax return.
Idaho’s income taxes function much like the federal ones do, where owners report income and losses on their personal returns rather than a separate corporate one (unless you’ve elected to have your LLC taxed like a corporation). What’s more is that Idaho doesn’t impose any “franchise” or “privilege” taxes on its LLCs, so you won’t have to worry about that either.
But you’re not in the clear just yet. There are a few other state taxes you may need to pay based on your LLC’s circumstances. Do you sell any merchandise? If so, your LLC will owe Sales and Use Taxes. Do you have any employees? Then, it will need to pay Withholding and Unemployment Insurance Taxes. Register for any taxes that apply through the State Tax Commission website.
Plus, depending on your LLC’s location, it may owe a local tax to its city, municipality, or county. Consult your local government’s website to find out.
The Certificate of Organization may have already made your business legitimate, but your LLC might still need to obtain a license before doing business. This all depends, however, on the type of business you run.
Consider our friend Fanny, who would need to obtain a Nursery, Florist, & Landscaping License from the Department of Agriculture before doing business in Idaho. To see which licenses your LLC may need, take a look at the state’s Online Services page. Fees vary depending on the particular license.
Certain cities and counties require their own specific licenses on top of any state ones, so you should also check with your local government.
Once you’ve taken all the steps to start your LLC, you’ll be off and running, making deals and growing the company. But when things are moving 100 miles per hour, don’t forget that Idaho requires all of its businesses to submit one important recurring filing: the Annual Report.
The Secretary of State needs a way to ensure they have your most accurate, updated information, so every year (except the year it’s formed), your LLC will need to file an Annual Report by the end of its anniversary month. The good news is that there’s no filing fee.
You must file online through the SOSBiz page, but the process is pretty straightforward. From the homepage, just click “File Annual Report” and sign in (or create an account if you don’t have one). The page contains a helpful set of instructions if you’re unsure where to start.
There’s no late fee associated with the Annual Report, but be careful because your LLC can be administratively dissolved if it hasn’t filed by 60 days after the due date.
And we’ve come to the end. It’s a long process, and not always easy, but the reward is well worth it. If you’ve made it this far, congratulations! Your Idaho LLC is ready for takeoff. So go ahead and start with that big sale, promotional campaign, or business deal. Maybe you’ll see Fanny out there in the business world, selling her beautiful floral creations.
Need Help Creating Your LLC?
If you even skimmed this guide to look over the steps, you likely got a sense of how many moving parts there are when starting an LLC. Can you do it all yourself? Absolutely. We have complete confidence in you.
But if you’d rather hand it off to someone else and not have to worry about it again, we recommend using an LLC formation service. This way, you can go about your other business responsibilities with the confidence that everything will be submitted correctly and punctually.
Plus, an LLC formation service can handle maintenance items like Annual Reports, so you can take them off your to-do list. And on top of that, many services also provide a registered agent.
Sound good? Whether you know that you’ll need an LLC service or you’re just exploring your options, take a look at IncFile and Northwest Registered Agent. These are two of the top services available. And you can take our word for it because we’ve done a whole lot of research on the topic.