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Forming an LLC in Idaho

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 an LLC (limited liability company), it's essential to understand the necessary steps for beginning the process. This article explains how to start forming an LLC in Idaho and provides a link to the proper forms with links to relevant state laws.

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Benefits of Starting an LLC in Idaho

There are many benefits to forming an Idaho LLC. You might want to start a limited liability company to benefit from limited liability protection. Having limited liability means that your personal assets, such as houses and cars, are protected in the event of a lawsuit against your company. If you're already operating a business as a sole proprietor, you don't have this protection for your personal assets, and you should seriously consider forming an LLC.

Another benefit of limited liability companies is this business structure's flexibility. You can choose how you'd like the entity to be taxed, and you don't have to stick to the rigid organizational structure of a corporation. Many business owners find LLCs to be a great mix of the features of sole proprietorships and corporations. Starting an LLC does require time and effort, but you can do it on your own step-by-step.

Steps for Forming an LLC in Idaho

LLC formation requirements vary depending on the state. To successfully form an LLC in your state, you must comply with state laws. You'll also need to be aware of any requirements on the county or city level.

Step 1: Name the 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.

In Idaho, the name you choose for your LLC 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. Simply put, include one of the following terms in your LLC name: "limited liability company," "limited company," "LLC," "L.L.C.," or "L.C."

Step 2: Select an Idaho Registered Agent

Idaho LLCs are required to have a registered agent on record. A registered agent is either a person or company that has the duty of accepting legal papers if the company is sued. You'll need to select an individual who has a physical street address within the state of Idaho or use a registered agent service. A P.O. Box is not acceptable as a registered agent address.

Step 3: File the Idaho LLC Certificate of Organization

You have several options for filing your Certificate of Organization in Idaho. You can file onlineby mail, or in person. Be prepared to provide the following information when you submit your Certificate of Organization:

  • 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 filing fee with your filing could lead to the deletion of your filing from the system.

Step 4: Prepare an Operating Agreement

Although an LLC operating agreement is not filed with the Idaho Secretary of State, it's a vital internal document. The 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.

Step 5: Get an EIN

Getting an EIN (Employer Identification Number) is necessary for many business owners. You'll need an EIN (also called a Tax ID number or FEIN) to hire employees and open a business bank account.

What is an EIN? You can think of it as a social security number for your business. The IRS (Internal Revenue Service) assigns these numbers to business entities for tax purposes. It's free to apply for an EIN through the IRS website.

Step 6: Open a Business Bank Account

It can be vital to get a separate bank account for your business as soon as possible. Not only will it make accounting and tax preparation more manageable, but you'll also need to keep your personal and business assets separate to maintain protection for your personal assets. Get a business credit card or debit card, as well.

Note: State laws are always subject to change through new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

Annual Reports

Every LLC doing business in Idaho must file an annual report with the Idaho Secretary of State. The Secretary of State will give notice by sending correspondence to inform you when the annual report is due. The report must be filed online.

Frequently Asked Questions About LLCs in Idaho

1. Do I need a DBA for my LLC?

You don't have to have a DBA for your LLC as long as you're only operating your business under the name you filed with the Secretary of State when you created your LLC.

2. Do I need a business license or permit for my Idaho LLC?

You may need to get a license or permit for your LLC, depending on the type of business you're operating. For example, you could need a seller's permit from the Idaho State Tax Commission to sell certain items. Check with local government to make sure you're operating your business in compliance with local laws.

3. How much does it cost to start an LLC in Idaho?

It costs $100 for an online filing. There's an additional fee for manual entry, so filing by mail or in-person costs $120.

Forming an LLC in Idaho? 

Fortunately, forming an LLC in Idaho can be a straightforward process with FindLaw's Business Formation Service. However, you still may run into some issues with formation or have specific questions about your business plan or operations. Turn to an experienced legal professional who can give you legal insight by connecting with an Idaho business organizations attorney near you.

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