How to Form an LLC in Idaho in 7 Steps
By Jordan Walker, J.D. | Legally reviewed by Catherine Hodder, Esq. | Last reviewed May 24, 2024
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Choosing the proper business structure for your business is one of the most significant decisions you'll make as an owner. If you're interested in setting up a limited liability company (LLC), it's essential to understand the necessary steps for beginning the process. This article explains the process for forming an LLC in Idaho and provides links to LLC forms and additional helpful information.
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7 Steps to Form an LLC in Idaho
Name Your LLC
Choosing a business name is an essential first step for several reasons. From a marketing and branding standpoint, you need a name that will attract potential customers to your business. From a legal perspective, you need a name that meets state law requirements.
Your Idaho LLC name must be unique and distinguishable from every other business name registered with the state. To determine if the name you want is available, conduct a business name search through the Idaho Secretary of State website.
Also, note that your LLC name must meet several other requirements. For example, the name that you choose cannot contain any words or phrases that:
- Imply that your business is affiliated with or is a governmental agency
- Are restricted (such as "bank" and "university")
- Imply that your business is organized for any unlawful purpose
Make sure that the name you choose includes an indicator of the type of business entity you have. Include either "limited liability company" or "limited company". You can also use one of the following abbreviations:
- LLC
- L.L.C.
- L.C.
If you have a name in mind but aren't quite ready to form your LLC, you can apply for a reservation of legal entity name to reserve your desired name for a period of four months. The fee to file is $20 (plus an additional $20 for manual processing).
Get a Registered Agent
Idaho LLCs are required to have an Idaho registered agent at a physical street address as P.O. Boxes are not acceptable. A registered agent is designated to receive service of process, notices, and other legal documents. A registered agent may be an individual who is a resident of Idaho, a business entity registered with the Secretary of State's office, or you can act as your own registered agent.
File Your Certificate of Organization
In Idaho, filing a certificate of organization with the Secretary of State forms your LLC in the state. You can file online, by mail, or in person. Be prepared to provide the following information:
- Name and address of LLC
- Name and address of registered agent
- Mailing address for future correspondence
There's a filing fee of $100 for online filing and $120 for filing by mail or in-person. Failure to provide the state fee with your filing could lead to the deletion of your filing from the system. It will likely take seven to ten business days to process your certificate of organization and officially register your LLC.
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Draft an Operating Agreement
Although an LLC operating agreement is not required and you do not have to file it with the Idaho Secretary of State, it can be a vital internal document. Your Idaho LLC operating agreement should contain information relating to ownership of the organization and procedures for operation. It's a document you'll likely need to look back at to ensure that your business operates under agreed-upon procedures.
Get an EIN
Apply with the Internal Revenue Service (IRS) for an Employer Identification Number (EIN) if you plan on having employees and in certain other situations. You'll likely need an EIN to open a business bank account. You can think of it as a Social Security number for your business. The IRS assigns these numbers to business entities for federal tax purposes. It's free to apply for an EIN through the IRS website.
Set Up Business and Tax Accounts
Idaho requires businesses to register for certain permits and licenses. These can include sales/use permits, income tax withholding, Boise Auditorium District permits, and travel or convention permits. You can complete the Idaho business registration application online through the Idaho Department of Labor's website or use Form IBR-1 business registration to apply by mail or in person. You must register before you can request your business permits. You should also set up an account with the Secretary of State's Idaho SOSbiz Login to make maintaining your business filings more convenient.
Also, setting up a separate bank account for your business can make accounting and tax preparation more manageable and help keep your personal and business assets separate to maintain protection for your personal assets. You may want to consider getting a business credit card as well.
File Beneficial Ownership Information Report (BOIR)
Note: The following BOIR requirement is currently facing legal challenges. As of December 26, 2024, the Fifth Circuit Court of Appeals reinstated an injunction against the enforcement of the Corporate Transparency Act and the BOIR requirement. There will be a hearing in March 2025, followed by a final ruling. You may voluntarily file a BOIR with FinCEN or wait until this matter is resolved.
There is a new federal requirement for LLCs to file a Beneficial Ownership Information Report (BOIR) with FinCEN. Any LLC created in 2024 must file the BOIR the earlier of 90 days from the day you receive notice of its creation/registration or 90 days from the day the Secretary of State first provided public notice of the LLC’s creation/registration. Any LLC created after January 1, 2025, must file the BOIR within 30 days.
The BOIR is a simple form. Go to the website www.fincen.gov/boi and choose “File BOIR.” Provide the requested information about the LLC, the applicants, and the beneficial owners. An LLC applicant is one who files the LLC formation paperwork or directs someone to file the paperwork. An LLC beneficial owner is one who has substantial control over the LLC and/or owns at least 25% of the LLC’s assets.
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Business and Tax Requirements in Idaho
Depending on the kind of business your LLC conducts and where it is located, it will likely be subject to various state taxes and local business licenses or permits.
State Business Tax
You must file state income tax returns for your LLC if it:
- Is transacting business in Idaho
- Is registered with the Idaho Secretary of State to do business in Idaho
- Has income attributable to Idaho
- Is a fiduciary
State Employer Tax
Your LLC must have an Idaho withholding account if it has employees earning income while in Idaho. You must also have a withholding account if you choose to voluntarily withhold Idaho income tax for an Idaho resident working outside of the state of Idaho.
Sales and Use Taxes
If your LLC sells goods in Idaho, you need to collect sales tax, file a sales and use tax return, and send the taxes to the Tax Commission. For state tax purposes, a sale means transferring ownership of tangible personal property or providing taxable services for a profit. If your LLC uses or stores goods in Idaho that you haven't paid Idaho sales tax on, it is also subject to the state use tax unless an exemption applies.
Business Licenses and Permits
Your LLC may require additional licenses or permits. You can use Idaho's State and Federal Resources for Businesses website to find more information. The wizard tool allows you to enter information about your business to receive a list of agencies to contact about permits and licenses. You should also reach out to the city or county government where your LLC is located to confirm their licensing or permit requirements.
Registration in Other States
To register your Idaho business in other states, you will likely apply as a foreign LLC in that state. You'll pay a fee and probably be asked to submit proof of your LLC's good standing in Idaho.
Annual Requirements in Idaho
Every LLC doing business in Idaho must file an annual report with the Idaho Secretary of State. You can file your annual report by creating a user account with the Idaho Secretary of State's SOSbiz online filing system. Filing your annual report by paper form can only be completed in the Secretary of State's office. There is no fee for filing annual reports, but they must be filed by the end of your LLC's anniversary month.
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Idaho LLC Formation FAQs
Disclaimer: The information presented here does not constitute legal advice or representation. It is general and educational in nature, may not reflect all recent legal developments, and may not apply to your unique facts and circumstances. Consider consulting with a qualified business attorney if you have legal questions.
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