Guide to Forming an Idaho LLC

Step 1: Name your Idaho LLC

Choose a name for your Idaho LLC. Your initial consideration when choosing a name for your Idaho LLC is to make it unique from all other businesses in the state. Use our Idaho Business Entity Search page to learn how to do a name check to verify the business name you want is available and not already in use.

The Idaho Secretary of State office advises you to contact them directly to see if the name you want is available before you file your Certificate of Formation. Their Idaho LLC search engine isn’t perfect.

To comply with state naming requirements, an Idaho LLC’s name must end with a “designator” indicating its business type. You can choose from the words “Limited Liability Company” or “Limited Company” or the abbreviations “LC,” “L.C.,” “LLC,” or “L.L.C.” “Limited” may be abbreviated as “Ltd.,” and “company” may be abbreviated as “Co.”

In addition to the above, your LLC can’t contain language stating or implying that it’s a government agency. You also can’t state or imply that your company is organized for a purpose that isn’t legal.

Federal and Idaho State Trademarks

Even if the Idaho Secretary of State approves your business name, that’s no guarantee that someone else hasn’t already claimed it with a federal or state trademark. To truly check to see if your business name is free of trademarks can be difficult because there’s no central place to check. Some businesses even employ an attorney specializing in trademarks to see if they’re in the clear.

You can take some measures yourself, like searching the trademark database on the United States Patent and Trademark Office website. This can help you determine if someone’s already claimed a federal trademark on the name you want.

State trademarks are applicable only within the borders of a state. The Idaho Secretary of State website has a trademark search engine where you can see if anyone has a state trademark on your desired LLC name. If you want, you can also apply for your own state trademark on the site.

In addition to checking these databases, it’s wise to do an internet search for your business name, including checking domain names, social media sites, and online phone directories.

Check for available domain names

When coming up with a business name, it’s wise to consider securing a matching domain name for your future website. We have a tool to help you do a preliminary domain name search. Our domain name registration service can help you secure the online name that will best serve your company.

Is your Idaho LLC name available as a web domain?

Even if you don’t sell your products or services directly online, you’re going to want a presence on the web. After all, you want your company’s name, principal address, and contact info to appear when potential customers search for it.

That’s why getting a good domain name that pairs well with your business name is so important. You’re likely going to be putting that URL on your business cards, signage, and other marketing materials, and you want people to be able to remember it and associate it with your business.

The ideal domain name for your company may already be taken, but you can still find others. In fact, if you find a truly great available domain name, it might be worth naming your business after that URL rather than the other way around.

You can use our domain name search tool to see if your desired business name or something else that’s suitable is available as a URL. If you find such a domain name, you might want to lock it down before someone else does.

You can also check to see what social media handles are available. Many businesses market on platforms like Instagram, Facebook, and Pinterest, so getting the appropriate social media names can be important for effective online marketing.

We have a domain name service to help you find and purchase a domain name for your business. We can also help you create a business website and provide domain name privacy.

Reserving a Business Name for an LLC in Idaho

If you’re not ready to file your Certificate of Organization just yet, Idaho allows you to reserve a business name for four months for a fee. You may do this to make sure your chosen business name is still available in the Gem State when it’s time to file.

If you’re filing your Certificate of Organization right away, you likely don’t need to file an Application for Reservation of Legal Entity Name. You can name your business when you file the Certificate of Organization. But you can still reserve the name if you’re worried that someone will snag it.

Filing a DBA in Idaho

If you plan on doing business under a name other than your official business name, you can file a Certificate of Assumed Business Name (commonly referred to as a DBA or “doing business as” name) after you register your business with the state of Idaho.

For example, this is helpful if you want to separate services under different titles or advertise under a name that doesn’t include the required “LLC” at the end. The state charges a small fee for a Certificate of Assumed Business Name.

You may also use our quick and easy Idaho DBA service, which can save you time, money, and potential headaches.

Step 2: Appoint a registered agent in Idaho

Name a registered agent. Idaho requires that an LLC have a registered agent for service of process. This means your Idaho LLC must have a person or entity that agrees to accept legal and official notices on your company’s behalf (for example, if the business is sued).

An Idaho registered agent must be an individual who is a resident of Idaho or a business entity registered with the Secretary of State’s office. It’s a requirement that they have a physical address in Idaho and agree to receive and forward legal notices to you. The address of the Idaho registered agent can’t be a P.O. box or something similar. It needs to be a physical street address so that the agent can receive notices in person.

Registered Agent Service

While you can be your own registered agent, it can cause problems, such as putting you in the awkward position of being notified of a lawsuit in front of customers. Hiring a professional registered agent service like ours can provide the following benefits:

• Avoiding embarrassing scenarios where you’re notified of a lawsuit in front of clients, employees, etc. 
• Ability to move your office location without having to update your registered agent address with the state.
• Freedom to leave the office, as the Idaho registered agent must be present at the office during all normal business hours.

What if a process server can’t find my Idaho registered agent?

Serving as your own registered agent or appointing a friend or family member to be your agent might seem the simplest way to meet the Idaho registered agent requirement. But consider what could happen if a process server is unable to find you or your appointed agent.

This can occur if you or your appointee isn’t in the office (for example, meeting with a client, out of town, on vacation, etc.) when someone needs to reach the agent. It can also happen if the agent moves or quits and you forget to update your paperwork with the state.

In addition to legal penalties for being out of compliance (including the possibility of the state dissolving your LLC and removing your limited liability status), failing to maintain a registered agent could mean that you won’t be notified of a lawsuit. A legal proceeding against you could actually go forward without your knowledge, meaning you wouldn’t even have a chance to defend yourself.

Step 3: File an Idaho Certificate of Organization

Complete and file the Certificate of Organization with the Idaho Secretary of State. When forming an LLC in Idaho, one document makes your business official: a Certificate of Formation. Of all the red tape you’ll have to overcome, this is the paperwork that matters most. Once approved, this makes your LLC official in the eyes of the state.

Filing official government documents like this can be intimidating and complicated for many people, which is why we’re here. With our business formation plans, our professionals file for you to make sure it’s done correctly the first time. But, although we can handle this for you, we’ll show you how the process works below.

Filing Online with Idaho SOSBiz

You can file the Certificate of Organization online or via paper; either method incurs a filing fee of $101. To file online, you’ll need to create an Idaho SOSBiz account, which you can also use to file other forms.

Idaho has options for expediting your filing for an additional fee.

Filing by Mail with the Idaho Secretary of State

Paper forms are mailed to the Office of the Secretary of State and must include payment in the form of a check. You can make checks out to the Idaho Secretary of State.

For those who choose to mail their Certificate of Organization, send all paperwork to:

Office of the Secretary of State
450 N 4th Street
P.O. Box 83720
Boise, ID 83720-0080

Online payment can be made with all major credit and debit cards for a small transaction fee.

Certificate of Organization Requirements

To complete the Idaho LLC form, you’ll need to provide the following information:

1. The name of your LLC
2. The street and mailing address of your LLC’s principal office
3. The name and street address of the company’s registered agent
4. The name and address of at least one “governor” of the LLC. Governor refers to a manager of a manager-managed LLC or a member of a member-managed LLC. You’ll need to certify that you have at least one organizer and one governor to finalize your Certificate of Organization in Idaho.
5. The mailing address where you would like to receive annual report notices
6. Contact information (phone number and email) where you can be reached
7. Identify which type of LLC you want to form. In Idaho, you have the choice of forming a normal LLC or a professional LLC. However, Idaho limits the use of professional LLCs to licensed professionals like geologists, lawyers, veterinarians, chiropractors, accountants, and a few other licensed professionals. In all other respects, filing the Certificate of Organization in Idaho for a professional LLC is the same as filing a certificate for a regular LLC. The only difference is specifying the professional purpose, but be aware that a professional LLC uses a different form and employs different naming conventions.
8. The name and signature of the LLC organizer

View step-by-step directions on how to file your Idaho Certificate of Organization.

Digitally store your Idaho LLC paperwork

If you have us handle filing your Certificate of Organization, once the state approves your LLC, your paperwork will be available from your ZenBusiness dashboard, where you can keep it and other important paperwork digitally organized.

Once you get your physical paperwork back from the state approving your new LLC, you’ll want to keep it in a safe location along with your other important documents. These documents can include your formation documents, member certificates, legal documents, contracts, compliance checklists, transfer ledger, etc. We offer a customized business kit to help you keep these important documents organized and looking professional.

How to Amend Your Certificate of Organization

You need only file your Certificate of Organization once. But if any information in the original Certificate of Organization needs to be updated, your business is required to inform the state about the changes.

You would report these changes by filing an Amendment to the Idaho Certificate of Organization and paying a filing fee. If your Certificate of Organization isn’t current, it could impact your ability to get an Idaho Certificate of Good Standing. This document isn’t required to conduct business, but it can be important for business accounts, potential investors, and expanding your business to other states. Basically, failing to keep your business up to date with state requirements can limit your LLC’s potential future growth.

Do you need help amending your Certificate of Organization? We have an amendment filing service that can handle it for you, as well as our Worry-Free Compliance service, which includes two amendment filings every year.

Step 4: Create an operating agreement

Make an Idaho LLC operating agreement. This document spells out the day-to-day operating procedures and details of your business. It covers things like who owns what percentage of the business, how profits are distributed, and how decisions are made.

Creating an LLC operating agreement helps set the ground rules between you and your partners before the business takes off. It helps you avoid disagreements and make clear decisions.

Benefits of an Operating Agreement

While having a comprehensive operating agreement isn’t a legal requirement for LLCs in Idaho, creating one is still considered an essential step in forming an LLC. The benefits include:

• Additional personal asset protection: By spelling out which assets and affairs are tied to the business and not, you add another layer of legal protection between what happens to your business and what happens to you personally.
• Clearly defined rules: In the absence of an operating agreement, there are default rules set by the state of Idaho for how things work in an LLC. If you want to avoid the default and make it clear how your company should run, use an operating agreement.
• Assign ownership: The agreement can clearly spell out what percentage of the company each member owns. This includes how much capital they contributed and how any profits should be shared. This will help avoid any disagreements among the members down the road.
• Succession and dissolution: The agreement can include explicit details about who gets your share of the business if something happens. It can also include how things will be divided up if the business dissolves.
• Business funding: Sometimes, to get business loans or lines of credit, banks will want to see an operating agreement to make sure you’ve given your business serious thought.
• Mindset: Creating an operating agreement gets you in the right mindset to start a business. It forces you to think about different scenarios and plan accordingly.

Operating Agreement Templates

Are you unsure as to how to create an operating agreement for your LLC? We offer a customizable template to help get you started.

Once you’ve finalized your operating agreement and it’s time for all members to sign, you can have the signatures notarized. This secures the legal foundation of the agreement. However, you don’t need to file the finalized agreement with the Idaho Secretary of State or any other entity. You just need to keep it in a secure location with any other business-related documents.

Do I need an operating agreement if I’m the only owner?

It seems like most of the things in your operating agreement are intended to avoid disputes among the members, so you might think you don’t need one if your LLC has only one member. But potential investors, future business partners, and others may want to see your operating agreement regardless.

Your operating agreement can also spell out what you want to happen to the business and its assets if you die or become incapacitated.

Here’s another consideration: On occasion, someone will take an LLC member to court to try to prove that the owner and the LLC are the same entity so that they can go after the owner’s personal assets. Should that happen, having an operating agreement in place is one more thing to further demonstrate to the court that the business owner and the LLC truly are separate.

Step 5: Apply for an EIN

Get an Employer Identification Number (EIN) for the business. You’ll need an EIN, also referred to as a Tax ID Number or Federal Tax Identification Number, from the Internal Revenue Service (IRS) if you have more than one LLC member, hire employees, or meet certain other criteria. Most banks will also require an EIN for opening a business bank account.

You can get your Idaho LLC’s EIN through the Internal Revenue Service website, by mail, or by fax. If you’re not fond of dealing with that particular government agency, we can get it for you. Our EIN service is quick and eliminates the hassle.

Register with the Idaho State Tax Commission

Your company may need to register with the Idaho State Tax Commission. Whether your company needs to follow this step will depend on the exact taxes it will be collecting and/or has been collecting from the state and whether you have employees.

Visit the Idaho State Tax Commission Business Basics Hub webpage for information on how to register your business to pay taxes. It also explains what types of taxes you may need to pay to remain in good standing.

The Idaho Business Registration System website will assist you in registering with the Idaho Department of Labor, Tax Commission, and Industrial Commission to ensure you’re set up for any sales or use tax, income tax withholding, unemployment insurance, and more.

Can filing as an S corp lower my taxes?

LLCs offer more flexibility than a corporation. One of those flexibilities is how you can choose to have your LLC taxed.

By default, an LLC has pass-through taxation. This appeals to most LLC members because it avoids “double taxation,” in which a corporation pays taxes at both the business level and again when the income is paid to the individual owners. But some LLCs opt to be taxed as a C corporation or an S corporation because, in their case, it works to their advantage.

Being taxed as a C corporation does mean you get double taxation, but, for some LLCs, the pros may outweigh the cons. One benefit is that C corporations have the widest range of tax deductions, which could be an advantage in some scenarios, especially for more profitable LLCs. For example, insurance premiums can be written off as a business expense.

S corp is short for “Subchapter S Corporation” and is a tax status geared toward small businesses. Like a standard LLC, an S corp has pass-through taxation. But there’s another potential advantage for some LLCs: It could reduce your self-employment taxes. 

Self-employment taxes are the part of your taxes that pay for Social Security and Medicare. In a typical LLC, you would pay these on all of your profits.

But filing as an S corp allows you to be an “employee-owner” and split your income into your salary and your share of the company’s profits. In this way, you pay employment taxes on your salary, but not self-employment taxes on your profits. (You’ll still pay the other applicable taxes on your LLC profits, of course.)

The drawback is that the Internal Revenue Service scrutinizes S corps more closely, meaning you’re more likely to get audited. S corps also have more restrictions for qualifying.

While it’s possible that being taxed as a corporation could benefit your LLC, remember that business taxes are very complicated. They’re also very specific to your situation. That’s why you need to consult a tax professional to see which tax method would work best for your Idaho business and help with tax filings.

If you decide to form your LLC with an S corp status, our S corp service can help you do that.

Step 6: Submit your LLC’s beneficial ownership information report

After Idaho approves your Certificate of Organization, you have another form to file: the beneficial ownership information report, or BOI report. This requirement is new for 2024, and it was introduced by the Corporate Transparency Act. Under the terms of the act, reporting companies are required to submit information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). 

Your new LLC has beneficial owners: people who hold 25% or more of the ownership interest, exercise substantial control over it, or get significant economic benefit from its assets. For each owner, you’ll need to provide a name, address, and identifying documents. By providing this information, you’re helping FinCEN accomplish its goal: reducing financial crimes by making it more difficult for organizations to hide money laundering behind shell companies. 

You can file this report easily online or by uploading a PDF to FinCEN’s website. It’s free to file; just be sure to file on time. If you organize your LLC in 2024, you’ll have up to 90 days after getting approval for your formation documents. LLCs that organize in 2025 and beyond will have just 30 days. If an LLC organized prior to 2024, they’ll have until January 1, 2025, to file. 

If you’d like to learn more about the Corporate Transparency Act and BOI report, check out FinCEN’s website. And if you’d like help filing, our BOI report filing service can make this step simple.

What to Do After Setting Up an Idaho LLC

Once you’ve successfully set up your Idaho LLC, there are a few key steps you should take to ensure that your business is compliant and runs smoothly.

Getting Business Licenses and Permits

While Idaho doesn’t have a general business license, any business that sells or leases goods or services is required to obtain a seller’s permit (often referred to as a sales tax permit).

Depending on factors like your industry, professional services you offer, and location, you may require other federal, state, and/or local business licenses and permits to operate. These could include things like building permits, health permits, signage permits, and other additional permits and licensing requirements. There’s no central place to check to see every license or permit you might need, so you’ll have to do some research.

If you don’t have the time or inclination to do all this research, or if you just want the peace of mind to know that you have all the business licenses and permits you’re legally required to have, our business license report service can do the work for you.

Setting Up an Accounting System

Implementing an effective accounting system is crucial for managing your LLC’s finances. This system can help you with tracking expenses, managing invoices, and preparing financial statements, which is essential for tax purposes and financial planning.

There are a wide variety of different tools you can use from software to hiring a professional. Our ZenBusiness Money app is also a great option. But ultimately, your priority should be picking a tool that you can use faithfully. 

Opening a Business Bank Account

Once you’ve secured an Employer Identification Number, you’ll be able to open a business bank account. Having separate accounts for your business activities and your personal banking is critical for sorting out your finances at tax time. It also helps you avoid commingling funds.

Commingling funds makes your taxes more difficult, and it could also be used against you if someone takes you to court to challenge whether you and your LLC are truly separate entities (that is, they want to go after your personal assets, not just the company’s).

We offer a discounted bank account for your new business. This allows for unlimited transactions, online banking, a debit card, and more. It may also be a good idea to get a business credit card so you can start developing a credit history.

When you want to authorize others in your organization to use the business bank account, we offer a banking resolution template to simplify the process.

For further help managing your new business’s finances, try ZenBusiness Money. It can help you create invoices, receive payments, transfer money, and manage clients all in one place.

Staying Informed About Legal Requirements

Staying updated on legal requirements such as state business laws, tax obligations, and any industry-specific regulations is essential. This will help ensure that your LLC remains in good standing with the state.

Like most states, Idaho’s LLC legal requirements are subject to change at any time, and it’s your responsibility to stay informed. That’s why a lot of small business owners find it helpful to consult with a tax professional or Idaho attorney for personalized assistance that’s up to date. 

Annual Report and Taxes for Idaho LLC

Two of your most common ongoing legal requirements for your Idaho LLC are filing your annual report and paying taxes. Here’s roughly what you can expect for each task.

Annual Report Process

In Idaho, LLCs are required to file an annual report with the Secretary of State. This report typically includes basic information about the LLC, such as the names and addresses of members and managers. Filing the annual report is crucial for keeping your business in good standing.

Taxes Applicable to Idaho LLCs

LLCs are typically considered “pass-through entities,” meaning that the business itself typically doesn’t pay federal income tax on its profits. Instead, the responsibility to pay income taxes falls only on the individual. In a typical corporation, profits are taxed at both the business level and the individual owners’ level.

In Idaho, LLCs are treated as pass-through entities for both state and federal income taxes. However, Idaho has some unusual business tax laws, so consult a tax professional to find out what your obligations are.

Single-member LLCs don’t have to file a separate federal return for their LLC. They report the LLC income on their personal income tax return (Form 1040). But LLCs with multiple members must file a separate information federal return for the LLC, Form 1065. Then each LLC member reports their share of the profits on Schedule K-1 and attaches it to their own personal federal taxes return.

Although LLCs are taxed as sole proprietorships or general partnerships by default, LLCs also have the option to be taxed as corporations. Some LLC members choose to classify their businesses as an S corporation or a C corporation, which can be advantageous in some cases. In particular, many LLCs elect to be taxed as S corporations because it can save the members money on self-employment taxes. You can learn more on our “What Is an S Corp?” page.

You also have a few other forms of federal taxation to keep in mind. For example, you will likely need to pay self-employment taxes on your portion of the LLC’s profits. These are the taxes that go toward Social Security and Medicare. Fortunately, an LLC member can deduct half of the self-employment taxes paid as a business expense.

Your Idaho LLC may have to pay a wide variety of other business taxes. These include taxes that are payable to the Idaho government, like sales tax. If you have employees or sell certain items, additional taxes may apply. Among the taxes that you could be responsible for in the state of Idaho are the following:

• Amusement devices
• Beer tax
• Business income tax
• Cigarette tax
• Electricity tax
• Estate tax
• Fuel tax
• Income tax
• Mine license tax
• Oil and gas production tax
• Property tax
• Sales and use tax
• Tobacco tax
• Travel and convention tax
• Vending machine tax
• Wine tax
• Employee withholding tax

To learn more about each and determine which taxes apply to you, visit Idaho’s Tax Types page. Another great resource that will help you sort out what taxes, forms, licenses, and other items you may need to consider to remain compliant is the Idaho Business Wizard page. By answering a series of questions, the site will let you know what you need to file and do next.