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How to Start an LLC in Idaho: 2024 Guide

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Using an LLC Formation Service

Small business entrepreneurs can benefit from online LLC services to establish their Limited Liability Companies (LLC). These services will help file the necessary documents, allowing small business owners to focus on running their businesses. They have features like guaranteed acceptance by the state, assistance with the EIN application, registered agent service, and drafting of operating agreements. Online LLC services can be a reasonable and worthwhile cost.

Business owners can customize these packages to suit their individual needs. If you want to compare services and costs before deciding, you can choose from several options. Northwest Registered Agent, Swiftfilings, and Bizee LLC services are the most popular choices and have the best ratings.

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Starting a Limited Liability Company (LLC) in Idaho can be exciting for anyone looking to launch a new business. An LLC offers the liability protection of a corporation with the flexibility and simplicity of a partnership. If you’re in Idaho and considering setting up an LLC, here’s a straightforward, step-by-step guide to walk you through the process.

 

Step 1: Choose a Business Name

The first step in creating your LLC is picking a unique name. Idaho has specific guidelines for naming your LLC, including the need for the name to differ from other businesses registered in the state.

Here are the guidelines you must follow: 

  • It must be different from other business names already registered in the state.
  • It can’t include restricted words or phrases (like implying it’s a bank unless it is one).
  • It must end with “Limited Liability Company” or one of its abbreviations (LLC or LLC).
  • See the more complete requirements here.

You can do a quick, free name check to see if your chosen name is available. If you are considering getting a website name that matches your business name, You can find good deals for your domain names on Namecheap.

 

Step 2: Hire a Registered Agent

Like in other states, your LLC must have a registered agent in Idaho. A registered agent is a person or company that agrees to receive legal papers on behalf of your LLC, ensuring you get all important legal notices. The agent must have a physical address in Idaho and be available during business hours. You can act as your registered agent, choose someone you trust, or hire a professional service like Northwest Registered Agent, Swiftfilings, or Bizee.

Check out our blog: ‘Is a Registered Agent Necessary? Your Guide to Finding an Affordable Option

 

Step 3: File Your Certificate of Formation

Let’s make your Idaho LLC official by filing the Certificate of Formation. This document is crucial as it formally registers your LLC with the state of Idaho. Here’s what you need to include in your 

Certificate of Formation:

  • LLC Name: Ensure you include the full legal name of your LLC, followed by “LLC” or “Limited Liability Company.”
  • Mailing Address: If your business receives mail at a location different from its physical address, list that here.
  • Registered Agent: Designate a registered agent who will handle official documents for your LLC. Include their full name, address, and contact information. They must formally agree to act as your registered agent.
  • Management Structure: Indicate whether your LLC will be member-managed (by you and any other owners) or manager-managed. List the names and addresses of the members or managers. For privacy, you may use a P.O. box for addresses.
  • Purpose: Provide a brief description of your business.
  • LLC Organizer: Identify the person or entity completing and filing your work. This role is crucial for correctly setting up your LLC.
  • Formation Date: Specify the date your LLC will officially begin. You can set this to the filing date or choose a date up to 90 days.
  • Signature: After reviewing your Certificate of Formation for accuracy, sign and date the document. Ensure your registered agent has consented to their appointment.

How to Send Your Form

When you’re ready to establish your LLC in Idaho, filing your Certificate of Formation is crucial. This document officially registers your business with the state. Here’s how you can file your Certificate of Formation in Idaho:

How to Send Your Form:

  • Online: The fastest and easiest way to file your Certificate of Organization in Idaho is through the Idaho Secretary of State’s online filing system. This platform streamlines the submission of your documents and fee payment.
  • By Mail: If you prefer traditional methods, you can also file by mail. Complete your Certificate of Organization form and mail it with the appropriate fee to the Office of the Secretary of State, P.O. Box 83720, Boise, ID 83720-0080.
  • In-Person: If you wish to submit your documents in person, you can bring your completed Certificate of Organization to the Secretary of State’s office, located at 450 N 4th Street, Boise, ID.

Filing Fee: The fee for filing the Certificate of Organization is $100 for domestic and foreign LLCs intending to operate in Idaho.

Filing the Certificate of Organization is critical to forming your LLC in Idaho. Before submission, it is essential to ensure that all information is accurate and fully completed.

 

Step 4: Making an Operating Agreement for Your Business

Let’s discuss setting up some ground rules for your business. This is where an Operating Agreement comes in. Think of it as a handbook that explains how your business runs. It’s important because it helps everyone understand their role and what’s expected in your LLC.

Here’s what an Operating Agreement usually includes:

  • Ownership: This part talks about who owns what percentage of the business. 
  • Member’s Rights and Responsibilities: Here, you’ll write down what each person in the LLC can and cannot do and what they’re responsible for. It’s like a job description for each member.
  • Joining & Leaving: This section covers how new people can enter your business and what happens if someone decides to leave. It’s good to have this figured out so there are no surprises later.
  • Dissolution: This might sound a bit gloomy, but it’s practical. It’s about how to close down the LLC if you ever need to. It includes the steps to take and how to handle everything when wrapping up the business.

Creating an Operating Agreement is a smart move. It keeps things clear and organized so everyone knows what to expect, and it can save you a lot of time. 

 

Step 5: Getting Your EIN from the IRS

Your business needs a number called an EIN from the IRS. It’s like an ID number for your business. This number will help you as an identification number when getting bank accounts and credit accounts, filing taxes, and hiring employees.

It’s free, and you can get it from the IRS website at https://www.irs.gov/businesses/small

 

Step 6: Steps After Forming Your LLC 

Open a Business Bank Account 

Keeping your personal and business finances separate is crucial for financial management and legal protection. Opening a business bank account requires your EIN and Articles of Organization. It makes tracking business expenses easier and simplifies tax filing.

Get a Business Credit Card

A business credit card is an excellent tool for handling business purchases and can help build your company’s credit history. Just like with personal credit, a good business credit score can make it easier to get loans and may qualify you for better terms. Visit our website to see our favorite business cards review.  

Check out our blog: Novo Review: The Best Business Banking Account in 2024?

Hire an Accountant

Managing finances can get complicated, especially as your business grows. An accountant can help you navigate tax laws, handle bookkeeping, and plan for financial growth. This professional guidance can save you time and money in the long run.

Create a Professional Website 

A website makes your business look legit. WordPress is a great tool to build your site. You can check out SiteGround or Hostinger for web hosting. They’re both good options to get your site up and running.

 

Idaho LLC: Permits, Licenses, Tax Requirements, and Annual Reporting

After forming your Limited Liability Company (LLC) in Idaho, navigating the state’s regulatory framework is crucial to ensure your business’s compliance and success. This encompasses obtaining the required permits and licenses, managing tax responsibilities, and fulfilling annual reporting obligations. Here’s what you need to know for your Idaho LLC.

Obtain Any Additional Permits and Licenses

The requirements for permits and licenses in Idaho vary based on your LLC’s business activities and location.

  • Local Business Licenses: Check with your local city or county clerk’s office or website for local business license requirements.
  • Professional Licenses: Certain professions in Idaho may require state-issued professional licenses managed by the Idaho Division of Occupational and Professional Licenses.
  • Health Permits: If your business involves food service, healthcare, or beauty services, you may need health permits from the Idaho Department of Health and Welfare or your local health department.

Tax Requirements in Idaho

Handling your LLC’s tax obligations correctly is crucial for compliance and financial well-being.

  • Employer Taxes: If hiring employees, register for Unemployment Insurance Tax through the Idaho Department of Labor and Employee Withholding Tax through the Idaho State Tax Commission.
  • State Taxes: Idaho LLCs are treated as pass-through entities for tax purposes, meaning the business itself doesn’t pay taxes, but profits are passed through to owners who report this income on their tax returns. However, if your LLC sells goods or specific services, you must register for a Sales Tax Permit with the Idaho State Tax Commission.
  • EIN: All LLCs need an Employer Identification Number (EIN) from the IRS, which is necessary for tax purposes, hiring employees, and opening a business bank account.

Annual Reporting in Idaho

Keeping your LLC in good standing with the state involves filing an annual report.

  • Filing Requirements: Idaho LLCs must file an annual report with the Idaho Secretary of State.
  • Fees and Filing: The filing fee for the annual report is $0 (as of my last update), and it can be filed online through the Idaho Secretary of State’s website.
  • Importance: This report is crucial for updating your LLC’s contact information and ensuring your business remains in good standing.

To ensure your Idaho LLC complies with state laws, following these permits, licenses, tax obligations, and annual reporting guidelines is essential. For the most up-to-date and detailed information, visit the official Idaho Secretary of State website and the  Idaho State Tax Commission website.

New 2024 Reporting Requirements (BOI)

Effective from January 1, 2024

Big news! Starting January 1, 2024, there are new reporting requirements for both domestic and foreign reporting companies. This includes LLCs, corporations, and other entities. Here’s what you need to know:

First Report Deadlines:

  • Existing Entities: If your LLC was already around before 2024, you’ve got until January 1, 2025, to submit your first report.
  • New Entities: If you’re forming your LLC in 2024, you must file your report within 90 days of your company’s creation.

Who Needs to Report:

  • Domestic Reporting Companies: This includes LLCs and similar entities within the U.S.
  • Foreign Reporting Companies: Entities registered foreign entities must also adhere to these new rules.

Exceptions to Reporting:

  • For specific exceptions, you’ll want to refer to the Beneficial Ownership Information Reporting Regulations at 31 CFR § 1010.380(c)(2) and the Small Entity Compliance Guide.

What Must Be Reported

What you need to report is all about transparency. The exact details can be found in the compliance guide, but it generally involves information about your LLC’s ownership and control.

When Must Reporting File Reports

Remember, if you’re an existing entity, your deadline is January 1, 2025. For new LLCs formed in 2024, it’s within 90 days of creation.

Filing Reports & Noncompliance Penalties

Starting January 1, 2024, all BOI reports must be filed electronically. Here are some critical points:

  • Filing Before the Date: You must file on January 1, 2024.
  • Accuracy: Filer certification of accuracy is mandatory – you need to double-check that everything you report is correct and accurate.

Penalties for Noncompliance:

  • False Information Penalties: Mistakes or misinformation can lead to a fine of up to $10,000 or up to 2 years in prison.
  • Penalties: If you slip up here, you could face a fine of up to $10,000 or even imprisonment for up to 2 years.
  • FinCEN’s Approach: The Financial Crimes Enforcement Network (FinCEN) focuses on education and outreach to ensure compliance. 
  • Safe Harbor Rule: Did you make a mistake? If you discover inaccuracies in your initial report, you have a 90-day grace period to submit a corrected report.

If you need more information or specific guidance, please visit the FinCEN website for all the details.

Starting an LLC in Idaho involves a series of straightforward steps. From choosing a unique business name to filing your initial report and managing your finances, each step is designed to help establish your business on a solid foundation. This guide lets you easily navigate the process, setting your LLC up for success. If you need help, services like Northwest Registered Agent, Swiftfiling, or Bizee exist. They can handle any legal details your LLC requires, like getting your EIN and sorting out your operating agreement.

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