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Starting a Business in IdahoYou’re about to embark on a long and exciting journey, one full of hard work and rewards: starting a new business.

With wide eyes and big dreams, you’re about to enter the world of business ownership.

But beyond the initial thrill of the startup decision, there’s a lot to consider. In fact, if you’ve never done it before, starting a business can seem like an intimidating mountain of work. Out of all your responsibilities and tasks, you might not even know where to start.

But have no fear. The good news is that once you have everything planned out and understand the process, the formation process is smooth sailing. And this is your go-to guide.

Everything you’ve been wondering about, everything you need to do, every question you have – it’s all right here. By the time you’re through these 16 steps, you’ll be a bonafide business owner who’s prepared for sustained success.

Idaho Entrepreneur Hack

When you form a business through business formation services (Example: ZenBusiness and LegalZoom), they’ll register your business with the state and help you check off most of the startup-steps in this list. They assist you with everything from building a website to opening a business bank account.

If you’d like to cut through the clutter and compare the best LLC services, see our comparison of the top 7 deals.

1) Write a Business Plan

Jumping into this endeavor without goals, directives, or a sense of direction can lead to a scattered, unproductive business.

A business plan lays the groundwork for your future success. It helps you analyze key elements of your business and forge pathways to achieve your goals. Here are a few things you should consider including in your business plan:

  • Executive Summary (a separate document that gives a complete overview of your business’ purpose, plans, goals, competition, opportunities, etc.)
  • Company description
  • Market Analysis (opportunities, competition, etc.)
  • Managerial or organizational structure
  • Products and/or services
  • Marketing strategies
  • Funding goals
  • Financial projections

Business plans aren’t just great for internal operations, but they give your business legitimacy in front of potential investors, customers, partners, and more. Need help? Check out this guide from the U.S. Small Business Administration.

2) Decide on a Business Name

You might’ve come up with the perfect name right away. If so, consider yourself lucky.

Sometimes, deciding on a business can be difficult, requiring brainstorming meetings and late-night rap sessions. That’s because your name is your business’ identity and reputation. It should be something that’s unique and memorable but also defines your business purpose.

This name will be subject to certain restrictions, however, based on your business type. All Idaho LLC names must include the words “Limited Liability Company,” “Limited Company,” or an abbreviation thereof. Corporations must include some form of the word “corporation” or “incorporated.”

And you can’t take any name that’s already been claimed by somebody else. Fortunately, you can easily check a name’s availability by performing a name search through the Idaho Secretary of State’s website. If it’s free, go ahead and use it on your formation documents. Or, if you’re not ready to register your business just yet, you can place a name reservation.

3) Decide on a Legal Structure

There are only a few types of business structures, but each one dictates some important parts of how your business will run.

The most popular types are the sole proprietorship, general partnership, limited liability company (LLC), S corporation, and C corporation. Most small businesses go with the LLC because of its unique blend of flexibility and personal asset protection.

However, you shouldn’t make this decision without reading up on all of your options. We’ve done plenty of research on each business type and developed side-by-side comparisons. Check out our LLC vs. Corporation and LLC vs. Sole Proprietorship comparison guides for a closer look.

4) Choose a Registered Agent

The Secretary of State needs a point of contact for your business, someone who will be available at your registered office address during typical business hours – 9am to 5pm.

This person is called a registered agent, and they serve as an intermediary with the state, receiving all of your company’s important legal communications and relaying them on to you. The Idaho registered agent ensures that no important state documents, deadlines, or payments fall through the cracks, so you’ll want to choose a person or company you trust.

You can choose either an individual or a business entity as your registered agent in Idaho, but they must:

  • Is an individual Idaho resident or a business entity authorized to do business in the state.
  • Has a physical address in Idaho (P.O. boxes are not allowed)
  • Has a mailing address in Idaho (may be identical to the physical address)
  • Is not the LLC or corporation itself. While your business cannot serve as its own agent, one of its members or managers can.

Almost any individual that meets these requirements and is over 18 years old can be your registered agent. It can be wise to choose someone familiar with business maintenance, like an attorney or owner. That said, family members and friends can also be viable options.

Or, you can choose a registered agent service instead. These companies take care of all your registered agent responsibilities, and some will even handle your business formation and annual reporting as well.

Important: You must continuously maintain a registered agent on file with the Secretary of State. If your agent resigns or you appoint a new one, you’ll need to notify them by filing the appropriate documents.

5) Register Your Business

This is the big one, the step that officially creates your business. No matter which business type you choose, you’ll need to register it with the Secretary of State.

LLCs: Put your LLC’s information on the official state record by filing a Certificate of Organization. The Secretary of State prefers that you file online through the SOSBiz filing portal, but will also accept paper forms via mail. Online filings cost $100 and paper ones will cost $120.

Corporations: Prefer a corporation structure? No problem. The filing processes and fees are the same, although you’ll need to file an Articles of Incorporation rather than the Certificate of Organization.

Sole Proprietorship/General Partnership: There are no official forms or fees to register as a sole proprietor or general partnership. Simply start doing business and that’s it! While this is obviously faster and easier, we recommend incorporating your business because of the personal asset protection LLCs and corporations provide.

Foreign Entities: Is your business primarily based in another state and you’re expanding to Idaho? You’ll need to foreign qualify before doing business in the state. Disregard the Certificate of Organization or Articles of Incorporation because you’ll need to file a Foreign Entity Registration either online for $100 or by mail for $120.

6) Get an EIN

The Employer Identification Number (EIN) is your ticket to doing state and federal taxes. It’s a nine-digit number, much like a Social Security Number, that identifies your business on tax documents.

If you’re forming an LLC, it will be considered a “pass-through” entity, so the business itself won’t pay federal income taxes. Instead, you and the other members will report income and losses on your personal tax returns.

But this doesn’t mean you can go without an EIN. If your LLC pays any type of business taxes – like Sales, Use, or Unemployment Taxes – or hires employees, you’ll need to get one.

Unsure if you need one? The IRS provides a useful “Do I need an EIN?” link on this page, where you can also apply for an EIN. If you go through the online application process, you’ll receive your number immediately.

Otherwise, you can submit a Form SS-4 by fax to (855) 641-6935 or by mail to :

Internal Revenue Service Operation

Attn: EIN Operation

Cincinnati, OH 45999

7) Open a Business Bank Account

LLC and corporation owners are required to keep their personal and business finances completely separate, or they risk losing their personal asset protection. To do so, you’ll need a business bank account.

The good news is that opening a business bank account is pretty simple. Just pay a visit to your bank’s local branch and sit down with one of the bankers there. You will need to present your formation documents, an EIN number, and some personal information. Then, you can direct all of your business income and expenses to that account instead of a personal one.

It doesn’t really matter which bank you choose, whether it’s a national giant like Chase or Bank of America or a small, local bank. However, it’s usually easiest to go with the one where you have existing accounts.

Quick Tip: If you’re considering to use an LLC formation or incorporation service, IncFile is the best when talking about business banking offers. They have a special partnership with Bank of America that gives you a $450 sign-up bonus if you bank with them.

8) Handle Any Tax Obligations

Ah, taxes. They’re always part of the picture, especially when you run a business.

Familiarizing yourself with your business’ tax requirements will help you establish a solid financial plan going forward. LLCs don’t need to file a corporate tax return and pay federal income taxes, so you’ll handle these taxes as part of your personal return.

Corporations, on the other hand, will need to file a Corporate Income Tax Return, while sole proprietorships/general partnerships will need to pay self-employment taxes.

Some states require a franchise tax for the privilege of doing business in the state, but Idaho does not. Still, there are a few other taxes your business may owe, depending on your circumstances:

Sales and Use Taxes: Any business that sells goods in Idaho will owe a Sales or Use Tax. Currently, both the Sales and Use Tax rates are 6%, although this can change from year to year. Check in with the State Tax Commission’s Sales and Use Tax Hub for more information.

Withholding and Unemployment Taxes: A business that hires employees will need to pay employer taxes, most prominently the Withholding Tax and Unemployment Insurance Tax.

If your business owes any of these taxes, you can register on the State Tax Commission website.

9) Find an Accountant

Sometimes it’s easier to hand off your financial responsibilities to a professional. Not only will an accountant ensures that your taxes are filed and paid correctly, but they might also find a few ways to save your business money.

Bookkeeping and tax procedures are time-consuming and require some specialized knowledge. Balance sheets, financial reports, cash flow, audits, and much more – an accountant can ensure that your company operates smoothly and streamlines its expenses.

This can be expensive depending on the complexity of your finances, but the benefits an accountant offers can be well worth it.

10) Create an Operating Agreement

An operating agreement constructs a framework of procedures and standards for your business. This is where you can lay out processes for member conduct, asset allocation, compensation policies, voting procedures, dissolution, and much more.

While operating agreements aren’t technically required in Idaho, they are essential to your business’ stability and success. They provide a safety net in legal disputes and legitimacy in front of banks, courts, government agencies, and other businesses.

You can either draft one yourself using an online template, or you can hire an attorney or an incorporation service to take care of it for you.

Once you’ve drafted your agreement, it must be approved by each of your LLC’s members, then filed with the rest of your business documents. You do not need to submit it to the Secretary of State.

Quick Note: ZenBusiness is the only business formation that includes an operating agreement or corporate bylaws in every package. All other services will charge you extra or push you to buy a more expensive package.

11) Acquire the Necessary Licenses

After filing your formation documents, your business is legitimate, but it might still need specific licenses before opening its doors in Idaho. This depends entirely on your business type and purpose, but there are three types of licenses you should know:

Professional/Occupational Licenses: Depending on your industry, business type, and/or vocation, you may need to obtain licensure through specific state boards. To find out which ones your business will need, use the state’s Business Wizard. This helpful tool asks you to answer a few basic questions about your business purpose and industry, then provides a comprehensive list of the licenses, permits, and forms you’ll need. You can also search for your profession or industry on the Online Services page.

Sales Tax Permit: If your business owes a Sales Tax (outlined above), you must apply for a Sales Tax Permit by completing and submitting Form IBR-1.

Local Licenses: Your specific city, county, or municipality might have its own licensure requirements. Take a look at your local government’s website to find out.

12) Consider Business Insurance

Even though it’s not pleasant to consider, there’s always a chance that unforeseen events might take a toll on your assets.

While forming an LLC or corporation offers some personal asset protection, additional business insurance can also protect your business assets in cases of lawsuits, damages, etc. You can acquire insurance for your business products, vehicles, specific occupations and much more.

If you hire employees, you’ll also need to get workers’ compensation insurance. SBA.gov has a useful guide for determining which forms of insurance your new business might need.

 

13) Build a Website

Your company’s digital presence is just as important as its physical one. Like it or not, most potential customers will find your business online, and if you don’t exist online, you’re missing out.

But don’t worry, you don’t need to be an HTML or web design expert to build a website. Sites like WordPress and Squarespace make it easy to construct an elegant and responsive website, no coding necessary. But if you’re not comfortable or confident doing it on your own, you can always hire a professional web designer to take care of it for you.

Quick Note: As we mentioned earlier, if you’re looking to build a business website, there are a handful of good business incorporation services that will help you get started. ZenBusiness or IncFile, in our opinion, have the best business website offers.

14) Launch Social Media Accounts

Making your mark on the digital landscape doesn’t start and end with your website. Most successful businesses also have a robust social media presence on multiple platforms. Facebook, Twitter, and Instagram are all great ways to connect organically with potential customers and develop your brand voice.

Just don’t forget to publish consistent social media content, or you’ll have trouble building a base of followers.

15) Understand Ongoing Idaho Requirements

After you’ve launched your business, things will likely be moving at 100 miles per hour as you evolve and grow. But in all of the excitement, you can’t forget your state’s ongoing compliance requirements. Every state has its own annual or biennial business requirements.

Every Idaho business must file an Annual Report each year by the end of its anniversary month (the month it was originally formed). The good news is that this report is completely free and fairly quick to file online. Don’t miss your due date, though, because a delinquent Annual Report could lead the state to administratively dissolve your business.

16) Check Out Idaho Small Business Resources

You’re not on this journey alone. There are plenty of free resources available to make starting and growing your business a smoother, easier process.

If you’re ever looking for a particular resource, whether it’s a small business center, financial advice, a loan opportunity, or something completely different, you can likely find it on SBA.gov. They have a specific page for Idaho’s district office and a helpful publication that outlines valuable resources for small businesses in the state. You’re bound to find something that can help empower your business.