Starting an Idaho LLC
An Idaho Limited Liability Company (LLC) is a legal business structure used to protect your personal assets (home, car, bank account) in the event your company is sued.
An LLC can be used to operate a business, or an LLC can be used to hold your assets (such as real estate, vehicles, boats, and aircraft).
1. Idaho LLC Name
Before filing your Idaho LLC’s Certificate of Organization (the document that creates your LLC), you’ll need to search the state’s database to make sure your desired Idaho LLC name is available for use. This is referred to as being “distinguishable”.
Your Idaho LLC name must be unique and distinguishable when compared to all the existing businesses registered in the state.
You can search your desired Idaho LLC name using the Business Search page.
LLC Designator: As per Section 30-21-301 of the Idaho Business Organizations Code, your LLC name must end with a proper designator. The following are allowed in Idaho:
- LLC (most common)
- Ltd. Co.
- Ltd. Company
- Limited Co.
- Limited Company
- Ltd. Liability Company
- Limited Liability Co.
- Limited Liability Company
Your Idaho LLC name cannot include a designator that makes it sounds like a different type of legal entity. For example, you can’t use Inc., Incorporated, Corporation, or any other designator that is not in the list above.
LLC name reservation: This step is not required to form an LLC. It’s pretty much unnecessary for most people.
We see too many people rush the LLC formation process and then later they want to change their Idaho LLC name. While you can file an Amendment in the future and change your LLC name with the state, you’ll also have to update the IRS, State Tax Commission, bank, debit/credit cards, vendors, website, business cards, online registrations, and more. Simply put, it’s a major pain in the neck. We recommend reading How to Come Up with a Good Business Name and spending a few days to really think about your LLC name.
2. Idaho LLC Registered Agent
The Idaho Secretary of State requires you to list an Idaho Registered Agent in your LLC’s Certificate of Organization.
An Idaho Registered Agent is a person or a company designated to receive notices from the state sent to your LLC as well as any legal mail (called Service of Process) in case your LLC is involved in a legal proceeding.
Your Idaho Registered Agent must have a physical street address located in the state (PO Boxes or mailbox rentals are not allowed) where Service of Process and other documents can be received.
Who can be your LLC’s Idaho Registered Agent?
You have 3 options:
Option #1 is for you to be your own Registered Agent.
Option #2 is for a friend or family member to be your LLC’s Registered Agent.
Option #3 is to hire a Commercial Registered Agent. Hiring a Commercial Registered Agent is a good idea if you want to keep your address off public records or if you don’t have an address in Idaho.
Commercial Registered Agent: If you want to hire a Commercial Registered Agent in Idaho, we recommend Northwest Registered Agent ($125 per year).
Northwest has been in the business for over 20 years and they have great customer support. Any mail that is sent to your Idaho LLC will be scanned by them and uploaded to your online account. They’ll also let you use their office address throughout your LLC filing in order to keep your address off of public records.
Special offer: If you hire Northwest to form your LLC ($39 + state fee), they’ll include their Registered Agent service free for the 1st year.
Idaho Registered Agent statutes:
Chapter 21 part 4
3. Idaho LLC Certificate of Organization
The Idaho Certificate of Organization is the form that you will file to officially create your LLC with the Secretary of State.
Idaho LLC filing fee: $100 (one-time fee)
Methods of filing: You can form an LLC in Idaho by mail or online; however, we recommend filing your LLC online since it’s what the state prefers and the process is much easier.
File your Idaho LLC online: You have to create a SOSBiz account.
Idaho LLC approval: After you submit your LLC filing, your LLC will be approved in 7-10 calendar days. Once your LLC is approved, the Idaho Secretary of State will email you a stamped Certificate of Organization and a filing receipt.
Note: Filing times may take longer due to the current global situation and government delays. Please see How Long Does it Take to Get an LLC in Idaho.
4. Idaho LLC Operating Agreement
An Idaho LLC Operating Agreement is a written contract among the LLC Members that spells out who owns the LLC and how much of the LLC they own. Your Idaho LLC’s Operating Agreement will also document how the LLC is managed, how profits are split, how taxes are paid, and more.
An Operating Agreement should be put in place for both Single-Member LLCs and Multi-Member LLCs located in Idaho.
Having an Operating Agreement for your Idaho LLC helps prove that the company is a separate legal entity from yourself. This helps maintain the personal asset protection provided by your LLC and is it very beneficial to have if you ever end up in court.
“Internal Document”: An LLC Operating Agreement is an “internal document”, meaning, you don’t have to send a copy to the Secretary of State, Tax Commission, the IRS, or any other government agency. You just need to keep a copy of the Operating Agreement with your LLC business records and give a copy to the other LLC Members, if applicable.
5. Apply for an EIN for your Idaho LLC
An Idaho EIN Number for your LLC is obtained from the IRS after your Idaho LLC is approved by the Secretary of State.
An EIN is also called an Employer Identification Number, FEIN, Federal Employer Identification Number, or a Federal Tax ID Number. They all mean the same thing.
It’s helpful to think of your Idaho LLC’s EIN Number as its “social security number”. It helps identify your LLC to the IRS for tax and filing purposes.
Your Idaho LLC’s EIN will also be used when you open an LLC bank account, register your LLC with the Tax Commission, and to process employee payroll (if applicable).
How is an Idaho LLC taxed: The IRS doesn’t have a specific tax classification for LLCs and instead, an Idaho LLC can be taxed 4 different ways with the IRS; 2 of which occur by default (they occur simply by obtaining your LLC’s EIN), and 2 require a special election be made (a form must be filed after you obtain your LLC’s EIN). We recommend reading how is an LLC taxed before applying for an EIN.
Wait for LLC approval: Don’t apply for an EIN until your Idaho LLC is approved by the Secretary of State.
An EIN is free ($0): The IRS will issue an EIN to your LLC at no cost.
Husband and wife LLC: If you are forming a 2-Member LLC in Idaho you can elect a special type of taxation called a Qualified Joint Venture. This allows a 2-Member LLC (owned by a husband and wife) to be treated as a Sole Proprietorship instead of a Partnership for tax purposes.
EIN Responsible Party: This will be the IRS’s “contact person” when you apply for your Idaho LLC’s EIN. If you have a Single-Member LLC, you will be the Responsible Party. If you have a Multi-Member LLC, any LLC Member can be the Responsible Party. For more information, please see EIN Responsible Party for LLC.
How to apply for an EIN: There are 3 ways to apply for an EIN for your Idaho LLC:
- If you have an SSN or ITIN, you can apply for an EIN online
- If you apply for an EIN online and you get an error message, you’ll need to apply for an EIN with Form SS-4 instead
- If you don’t have an SSN or ITIN, you can still get an EIN for your LLC by following these instructions: how to get an EIN without an SSN or ITIN
6. Idaho LLC Annual Report
All LLCs in Idaho need to file an Idaho LLC Annual Report each year.
Annual report fee: $0 (it’s free)
Purpose: The purpose of the Annual Report is to keep your LLC information up to date with the Idaho Secretary of State.
Penalty: If you don’t file your LLC’s Annual Report, the Idaho Secretary of State has the power to administratively dissolve (shut down) your LLC.
Due date: Your Idaho LLC Annual Report is due each year by the end of your LLC’s anniversary month. The anniversary month is the month your LLC was approved. And your first Annual Report is due in the year following the year of formation. For example, if your LLC was approved on June 10th 2022, June is your anniversary month. So your first Annual Report is due by June 30th 2023. Then it’s due by June 30th every year going forward.
No more postcard reminders: As of late 2018, the Idaho Secretary of State will no longer mail out postcard reminders. It’ll be your responsibility to file your Annual Report each year within your SOSBiz account.
How to file: You can file your Annual Report online via SOSBiz. Click on “My Records” and then click “File Annual Report” to get started.
7. Idaho Business Licenses and Permits
Depending on the location and the business activities of your Idaho LLC, you may also need to apply for a Idaho business license and/or permit.
You can review business licensing requirements from the official Idaho Business webpage: Business.Idaho.gov: Licensing and Permits
You can review professional license requirements from the official State of Idaho webpage: Idaho.gov: Online Services Professional License
Regarding any local/municipal licenses or permits, you’ll need to contact your local municipality (county, city, town, etc.) and ask about those.
Tip: Save time by hiring an expert. We recommend using IncFile ($99) to handle the business license research for you.
8. Idaho State Taxes
Every small business has a unique Idaho LLC Taxes situation, but we can provide an overview of the requirements.
Income tax: Typically, income taxes are paid on 3 levels:
Federal income taxes: By default, an Idaho LLC is a pass-through entity which means the profits and losses of the LLC flow through and will be listed on your personal federal income tax return.
- If you have a Single-Member LLC taxed as a Sole Proprietorship, you’ll likely list your business income on a Schedule C as a part of your personal 1040 return.
- If you have a Multi-Member LLC taxed as a Partnership, you’ll need to file a 1065 Partnership Return, issue K-1s to each of the Idaho LLC Members, and then the LLC Members will include the K-1 income on their personal 1040 return.
The IRS doesn’t have a specific tax classification for LLCs, therefore, Idaho LLCs are taxed based on the number of Members they have. For more information, please see how LLCs are taxed. Additionally, an LLC can elect to be taxed as an S-Corporation to save money on self-employment taxes.
Qualified Joint Venture: Since Idaho is a community property state, a 2-Member LLC owned by a husband and wife can elect to be taxed as a Sole Proprietorship (instead of a Partnership) by making a Qualified Joint Venture election with the IRS.
Tax registration with the state: Please review the Idaho Business Registration (IBR) Information page on the Tax Commission website. This pertains to sales tax and other relevant taxes your LLC may need to register for.
Sales Tax Permit: If your Idaho LLC is involved in retail sales, then you’ll need to register for sales tax, collect sales tax, and get a Seller’s Permit. This relates to the sale of goods that are shipped or delivered to customers in Idaho. For more information, please review the Business and Sales/Use Tax page on the Tax Commission website.
Tip: Save time by hiring an expert. We recommend using TaxJar. They'll help you register for, collect, and pay sales tax.
Other taxes and filings: Your Idaho LLC may also be responsible for other state and local tax filings; it all depends on the nature of your business activities and where they take place. We recommend working with an accountant.
Recommendation: We recommend speaking with an accountant to determine all of your Idaho LLC’s tax reporting and filing requirements.
9. Idaho LLC Bank Account
After getting an EIN for your Idaho LLC from the IRS, you can now open a business checking account under the LLC’s name.
Getting a separate business checking account for your Idaho LLC is important from a legal standpoint. It helps maintain your personal liability protection by preventing your personal assets and the LLC’s assets from being “commingled” (mixed together).
A separate business bank account for your Idaho LLC also means easier record-keeping for accounting and tax purposes.
Each bank has its own rules and regulations on business checking accounts. We recommend calling ahead of time to determine the minimum initial deposit, maintaining balance requirements, and monthly maintenance fees (if any).
Required Idaho LLC paperwork: You will need the following to open a business checking account for your Idaho LLC:
- Certificate of Organization (stamped and approved)
- EIN Confirmation Letter from the IRS
- Photo ID (driver’s license and/or passport)
- Operating Agreement (it may not be needed, but it’s a good idea to bring anyway)
Note: The bank may require other documents, so again, call ahead and double-check.
For more details: Please see our business bank account for LLC lesson for more tips on opening a separate bank account for your LLC.
LLC Members: Members of a Multi-Member LLC who want to be on the bank account should be present when opening the account.
Non-U.S. residents: Non-U.S. residents who have formed an LLC in Idaho can still open a U.S. business bank account. You can find more information here: opening an LLC bank account for non-US residents.
Debit card: The bank will give you a debit card when you open the account.
Credit card: You can also get a business credit card to earn points, miles, and other rewards.
10. Idaho Business Phone Number
Instead of giving out your cell phone number (or home telephone number), it might be a good idea to get a separate business phone number for your Idaho LLC.
We recommend getting a phone number from Phone.com. They have the most affordable plans and great customer support.
You can get a local Idaho telephone number or you can get a “1-800” number for your business. Phone.com lets you setup call forwarding to any number you like, create pre-recorded messages, and you can get your voicemails sent to your email.
Getting a separate phone number for your Idaho LLC is also a good idea if you’d like to keep your actual phone number off of those annoying “public record” websites.
Idaho State Agencies
Idaho Secretary of State
Website: Idaho Secretary of State
Hours: Monday to Friday from 8am to 5pm, Mountain Time
Idaho State Tax Commission
Website: Idaho State Tax Commission
Phone: 208-334-7660 or 800-972-7660
Hours: Monday to Friday from 8am to 5pm, Mountain Time