How to File an LLC in Idaho

What type of business should entrepreneurs form?

It’s a vital question because your business structure influences your company’s operations. With a sole proprietorship, you get complete control at the expense of personal liability. An S or C corp structure offers protection at the cost of governance. An Idaho LLC provides a happy medium between these business structures.

Key Takeaways

• Filing for an Idaho LLC allows you to retain control over your business while leveraging powerful personal liability protection.

• Idaho law requires entrepreneurs to file a Name Reservation Certificate alongside your LLC formation documents.

• Prospective LLC owners must retain the services of an Idaho registered agent when filing for an LLC.

What Is a Limited Liability Company Formation?

According to the Idaho Secretary of State’s website, a limited liability company (LLC) combines characteristics from other business structures.[1] These structures include partnerships, sole proprietorships, and corporations.

Instead of shareholders, an LLC has members who control the daily management of the business entity. Most operate under a contract called an operating agreement, though the creation of this agreement is optional.

An LLC gives you some liability protection. If your business falls into debt, that protection ensures creditors can’t chase after your assets when they seek repayment.

As a result, you get some personal protection that a corporate structure affords your business. However, the lack of shareholders means your LLC is private, resulting in you having control over how you operate.

The Benefits and Downsides of an LLC Structure

Before jumping into LLC formation, you need to consider the pros and cons of this business structure.

Let's start with the pros:

• Your assets are protected in the event your LLC must pay debts or legal issues arise

• Your LLC exists long after original members leave, making leadership structures flexible

• You have almost complete control of your LLC’s management structure

• Your LLC is a pass-through entity, so gains and losses are reported on personal income tax returns only

As great as these benefits sound, there are downsides to consider before forming a limited liability company:

• You must pay several state fees as part of the formation process

• In Idaho, you have to submit an annual report to keep your LLC in good standing

• It's harder to transfer ownership in an LLC than it is in a corporation

Step-By-Step Guide To Starting Your Idaho LLC

Let’s assume you are ready to start the LLC formation process.

There's a simple question to answer next:

How do you form your LLC?

We'll take you through a step-by-step process that covers every form you need to complete and filing fee you must pay to complete the formation process.

Step 1: Choose a Business Name for Your LLC

Your LLC name is your brand. It would be best to have a name that sticks in people’s minds and aligns with what your business does. However, picking a name for your LLC is more challenging than pulling some words together and slapping them onto your business like a label.

You have trademark concerns to consider. Before going forward with a name, you must check that you can use it and reserve the moniker so nobody can steal it from under your nose.

There are four stages to this process.

Stage 1 — Run a Name Search

Having the same business name as another company operating in Idaho creates several issues. There’s the obvious problem of creating confusion for customers. But the more severe issue is that the other business will likely hold a trademark over the name.

You may get sued if you violate their trademark by using the same name.

If you have an LLC name in mind, you should check if you can use it before moving forward. The state of Idaho makes this easy with its Business Search database.[2] Enter the name into the search field and click the magnifying glass icon. If a business using your name, or similar, exists, it'll pop up in the results.

As a side note, you can also search for a business using its file number. But if you're doing that, the odds are you already know the company's name.

It's not just your LLC name that you need to search. You may also use an assumed business name when transacting. Many call this "doing business as” (DBA).

For example, your LLC is “Idaho Fishery and Seafood Holdings, LLC." That’s a solid name, but it’s not an eye-catching brand. So, you might want to sell your product under another name, such as “Spectacular Seafood.”

That’s operating under an assumed business name. You need to run a name search on this moniker, too. Otherwise, you may do business as a company that already exists.

Stage 2 — Check Internet Domain Names

Up to 81% of retail shoppers conduct online research before they buy from a business.[3] Yet, at least 29% of small businesses don't have a website.[4]

Your LLC shouldn't be one of those businesses.

Your website allows you to tell people who you are and what you do. It positions your company as a professional problem solver and is crucial in modern marketing.

That website gets attached to a domain name. This domain is the address that people type into their web browsers when searching for your business. Before moving forward with your chosen business name, you must confirm the domain is available.

Start by typing the name into a search engine. If a website pops up, somebody already owns the domain you want to register. Sometimes, you can negotiate to buy the domain name from its owner. But in most cases, it’s better to find a name that isn’t in use.

You can also use a domain registrar service to look for an available domain name. These services also allow you to buy the name through them, making owning your domain name simple. It usually costs somewhere between $10 and $20 per year to purchase and maintain your domain name.[5]

Stage 3 — Reserve Your Business Name

Some states allow you to claim your business name as part of your Certificate of Organization. Idaho isn’t one of those states. You must provide a Name Reservation Certificate alongside your formation documents.

Thankfully, the state makes this easy with its Application for Reservation of Legal Entity Name form.[6] The document asks for your desired business name and the details of the person reserving it.

Filing costs $40 when completed online or $60 if you mail in the form. Assuming you want to mail it, send the form to the following address:

Office of the Secretary of State

450 N 4th Street

P.O. Box 83720

Boise, ID

83720-0080

You can pay an additional $40 for expedited service or $100 for same-day service.

Successful applicants receive a certificate stating they’ve reserved their LLC name for four months. Suppose your reservation runs out before you file formation documents. In that case, you must secure the name again to get a valid certificate.

Stage 4 — Trademark Your Name

Without a trademark, your LLC name has less legal protection. Anybody could use the name, and you'll have to go through the courts to get them to stop.

Once your name is reserved and you’re ready to file your formation documents, take a few minutes to register your trademark. You can do this online or by mail, with the form available on the Idaho Secretary of State’s website.[7]

Registering a trademark costs $30 per mark, with an additional $20 payable if you mail the form.[8] File trademarks for your LLC name, any names you're doing business as, and identifying marks, such as your company logo.

Step 2: Fill Out the Idaho Certificate of Organization

With your name reserved, you're ready to form your LLC. However, you can't jump straight into doing business. First, you need to file Certificate of Organization documents with the state.

These are your articles or organization because they tell the state what your business does, who runs it, and who will serve as its registered agent. We’ll cover the agent part in Step 3.

There are two types of LLC registration you need to understand:

• Domestic LLC

• Foreign LLC

Filing for a Domestic LLC

If you're an Idaho resident forming a business in the state, you're creating a domestic LLC. As such, you need to file the Certificate of Organization Limited Liability Company with the Secretary of State.[9]

The form asks for the following details:

• Your LLC name

• The address of the company's principal office

• The name and physical address of your registered agent

• The names and addresses of at least one governor of your LLC

• A mailing address for annual report correspondence

• Printed names and signatures of the LLC organizer/s

• A phone number and email address the Secretary of State offices can use to contact you

You can send the form online after creating an account with the Idaho Secretary of State website. Online filing costs $120, with optional additional fees of $40 for expedited service and $100 for same-day service.

If you mail the form, you must pay an extra $20 manual processing fee, bringing your total to $140. Mail the form to the following address:

Office of the Secretary of State

450 N 4th Street

P.O. Box 83720

Boise, ID

83720-0080

Assuming you're successful with your application, you can also order a Certificate of Good Standing. With a price of $10, this certificate confirms your company's existence and its adherence to Idaho's state laws.[10]

Foreign LLC

You may have already formed an LLC in another state. Or, you have a business in a country other than the United States. Either way, you must file formation documents with the state to do business in Idaho.

Do this using the Foreign Registration Statement form.[11] In addition to providing most of the same details as a domestic LLC provides, you also need to offer the following:

• Information about the type of business entity you want to register

• The company's formation jurisdiction

You must also provide a Certificate of Good Standing dated within 90 days of your form’s filing date.

Filing as a foreign LLC incurs state fees of $100 when done online. You’ll pay an additional fee of $20 to file through the mail. Expedited and same-day services are available for $40 and $100, respectively.

Step 3: Hire an Idaho Registered Agent

Your LLC must have an Idaho registered agent to conduct business in the state. According to the Idaho Secretary of State, this agent can be any of the following:

• An individual aged 18 or over who has a physical street address

• A legal business entity with a physical street address filed with the Idaho Secretary of State

• Yourself as long as you have a physical address where you can receive documents

“Physical address” means you can’t use a PO Box as a registered agent. Furthermore, the state doesn’t allow companies operating under assumed business names to act as registered agents because they’re not legal business entities.[12]

So, what does a registered agent do for your business?

An Idaho registered agent accepts legal documents on your company’s behalf, such as service of process. They also receive direct communication from the Idaho Secretary of State. A registered agent must maintain a physical mailing address and be available during regular business hours.

You must provide your agent's details in your Certificate of Organization. Furthermore, the agent must consent to serve in the role before they're assigned.

Why Should You Use a Registered Agent Service?

You may be thinking about acting as your own registered agent. You can do that in Idaho, allowing you to save some money on a registered agent service.

However, using a third-party registered agent has several benefits, making it the better option for most Idaho LLCs. These benefits include the following:

• You don't have to place your physical address on the public record

• You can leverage their expertise and regulatory knowledge that you may not have

• You save admin time, which you can put toward other aspects of your LLC

• You don't have to worry about service of process documents turning up during inopportune moments

• You're not obligated to maintain a physical address

• You’re able to sustain irregular business hours if they work best for your Idaho LLC 

Swyft Filings offers a registered agent service that receives and processes all formal correspondence for your LLC. With prices starting from $99 plus state fees, we ensure your company meets all of Idaho’s regulatory requirements.

Our team ensures privacy and offers a secure and reliable service. We also give you access to a dedicated online dashboard to access your documents whenever needed. Contact a team member if you’d like to leverage the benefits of a professional registered agent service.

Step 4: Create an LLC Operating Agreement

An Idaho LLC operating agreement is a written document that outlines the roles and responsibilities of your LLC members. It also defines whether the LLC is member-managed or manager-managed.

Idaho doesn’t require LLCs to have a written operating agreement. However, there are several benefits to creating one for both multi-member LLCs and single-member LLCs:

• An operating agreement formalizes the personal liability protection you receive

• An operating agreement lets you set specific rules for operating your LLC

• An operating agreement serves as a legal contract between an LLC's members

It's best to speak to an attorney when creating your operating agreement. They'll ensure the agreement contains the following vital elements:

• Details about each member's ownership percentage

• Information about how the LLC distributes profits and losses

• The voting rights of each LLC member

• Power, duties, and responsibilities for each member

• Clauses related to buyouts, ownership transfers, and meetings

Step 5: File for an Employer Identification Number and Business Licenses

Your Idaho business is almost ready to start transacting. However, there are two more things to consider before you get started:

• Getting an Employer Identification Number (EIN)

• Applying for additional business licenses

Getting an EIN

According to the Internal Revenue Service (IRS), a business needs an EIN to hire employees. Furthermore, you may need one to open a business bank account or get a credit card for your LLC.

An EIN is like a Social Security number for your business. It's a unique number that the IRS uses to identify your company for federal tax and state income tax purposes. You'll also use your EIN when paying employment taxes.

Even if you're focused on self-employment right now, it still pays to get an EIN in case you hire people in the future.

You can apply for an EIN online via the IRS website. You must have a valid Tax Identification Number to apply and nominate yourself as the “responsible party” for the EIN. A responsible party must be someone who owns or controls the entity to which the EIN applies.[13]

You don't have to pay any filing fees when applying for an EIN.[14]

Business Licenses

Every Idaho business has to file a Certificate of Organization to operate in the state. Some also require additional business licenses based on what they do.

First, there are occupational licenses, which you need when working in specific industries. For example, contractors who work in real estate, such as remodelers, need occupational licenses.[15]

Second, your business needs a sales tax permit to sell or lease tangible goods or services. This permit ensures the Idaho State Tax Commission taxes your LLC appropriately. You’ll also need to incorporate sales taxes on your tax returns. Complete the IBRS form to register for sales tax.[16]

Third, you may need licenses from professional licensing boards and permits from the cities or counties where you operate. These licenses depend on where your business is and what it does, meaning they don’t apply in all cases.[17]

Let Us Handle Your LLC Paperwork

As an entrepreneur trying to start a small business, you already have a lot on your hands. Between sales, marketing, and building internal processes, dealing with the paperwork needed to form your Idaho LLC is the last thing on your mind.

But it would be best if you did it.

The good news is that you don’t need to handle your filing yourself. Swyft Filings offers an LLC formation service that handles the paperwork for you.

Our team has helped over 250,000 businesses get their start since 2015. With us, you get compliant documents, a dedicated filing service, and the personalized care you need to ensure your LLC gets off the ground. If you're ready to learn more, get in touch with Swyft Filings today.

FAQs

How much does it cost to set up an LLC in Idaho?

Costs vary depending on the type of LLC you set up and your filing method. It costs between $120 and $140 to file your Certificate or Organization, with additional fees for reserving your name, applying for business licenses, and buying a domain name.

How is an LLC taxed in Idaho?

LLCs are taxed as pass-through entities in Idaho. As a result, all of the LLC's profits and losses pass through to the personal tax filings of the LLC's members.

What are the benefits of an Idaho LLC?

Having an Idaho LLC offers personal liability protection while giving you control over how you run your business. You can strengthen this control with an LLC operating agreement.

How do you dissolve an LLC in Idaho?

You must complete and submit the Statement of Dissolution Limited Liability Company form to dissolve an Idaho LLC.[18] It costs $20 to file this form online or $40 for manual filing.

Bibliography

1. Idaho Secretary of State. “Choosing a Business Entity.” Accessed January 25, 2023.

2. Idaho Secretary of State. “Business Search.” Accessed January 25, 2023.

3. Invoca. “38 Statistics Retail Marketers Need to Know in 2023.” Accessed January 25, 2023.

4. Zippia. “Statistics on Small Businesses Without Websites.” Accessed January 25, 2023.

5. Forbes. “How Much Does it Cost to Buy a Domain Name.” Accessed January 25, 2023.

6. Idaho Secretary of State. “Application for Reservation of Legal Entity Name.” Accessed January 25, 2023.

7. Idaho Secretary of State. “Trademarks & Service Marks.” Accessed January 25, 2023.

8. Idaho Secretary of State. “File Paper Forms.” Accessed January 25, 2023.

9. Idaho Secretary of State. “Certificate of Organization Limited Liability Company.” Accessed January 25, 2023.

10. Idaho Secretary of State. “Certificate Request.” Accessed January 25, 2023.

11. Idaho Secretary of State. “Foreign Registration Certificate.” Accessed January 25, 2023.

12. Idaho Secretary of State. “Registered Agents List.” Accessed January 25, 2023.

13. Internal Revenue Service. “Apply for an Employer Identification Number (EIN) Online.” Accessed January 25, 2023.

14. Internal Revenue Service. “Employer ID Numbers.” Accessed January 25, 2023.

15. Idaho State & Federal Resources for Business. “Find information about special licenses, permits, or taxes that may apply to your business.” Accessed January 25, 2023.

16. Idaho Department of Labor. “Idaho Business Registration.” Accessed January 25, 2023.

17. Idaho State & Federal Resources for Business. “Licenses, Permits and Regulations.” Accessed January 25, 2023.

18. Idaho Secretary of State. “Statement of Dissolution Limited Liability Company.” Accessed January 25, 2023.