How to Start an LLC in Idaho (Step-by-Step Guide)

When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming an LLC is often the best option for a number of reasons.

An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.

Starting an LLC in Idaho is a fairly straightforward process, the only break from the norm is that an LLC’s formational document is referred to as a “Certificate of Organization” in the state rather than the more commonplace term, “Articles of Organization”. Entrepreneurs forming an LLC in the state shouldn’t run into any major issues.

Starting an LLC in Idaho step-by-step

1. Select a name for your Idaho LLC

Follow naming requirements

There are two major guidelines to follow when naming your LLC in the state of Idaho:

1. Your LLC’s name must be distinguishable from the names of existing business entities on file with the Idaho Secretary of State.
2. Your LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “L.L.C.”, “LLC”, or “L.C.”

Need help coming up with a business name? Check out our free business name generator.

Reserve your LLC name with the Secretary of State

After selecting a name for your LLC, you may reserve it with the Idaho Secretary of State for up to four months in order to make sure that another business entity doesn’t use it before you are ready to legally form your company.

First, search the Idaho Secretary of State Business Search to ensure that your chosen name is available for use in the Gem State. If the name is free to use, go ahead and file a Reservation of Legal Entity Name with the Idaho Secretary of State. You have the option of filing online or filing by mail, however, the online filing fee of $20 is is considerably less than the $40 mail filing fee, so filing online is more cost-effective.

2. Designate a registered agent

As in every U.S. state, forming an LLC in Idaho requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must either be a state resident or business entity with a street address in Idaho OR if the individual or business is based out-of-state, they must have a business office in Idaho.

3. File a Certificate of Organization

An LLC is organized in Idaho through the filing of a Certificate of Organization of a Limited Liability Company with the Idaho Secretary of State. You can file the Certificate online or through the mail. The filing fee is $100 (or $120 for mail filings) and payment can be made by credit card.

Your Certificate of Organization must provide the following details:

• LLC name
• LLC principal address
• Registered agent’s name, address, and signature
• The name and address of a “governor”, which can be a manager or member depending on whether the LLC is manager-managed or member-managed
• The date the LLC was formed
• Organizers’ signatures

4. Create an operating agreement

Although not a legally mandated step for forming an LLC in Idaho, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

1. Describe the LLC’s business structure
2. Establish the individual responsibilities and obligations of LLC members
3. Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN) 

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs). The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

Annual Reports

Idaho LLCs and foreign LLCs doing business in the state must file an Annual Report with the Secretary of State every year. The report is due each year at the end of the LLC’s anniversary month (the month in which the LLC was officially formed). Filing the annual report online is the sole option, and there is no filing fee.

LLCs will receive email reminders from the Idaho Secretary of State 4-8 weeks before the report’s due date.

Obtain state and local business licenses

Wondering about which licenses you need? Take a look at these guidelines.

• Idaho doesn’t require a general business license: Idaho does not have a general business license requirement at the state level, but businesses may need to obtain specific licenses and permits based on their activities, location, and industry.
• LLCs do need a Sales and Use Tax Permit: The main state-level licensure is a Sales and Use Tax Permit, which is required for the vast majority of Idaho businesses.  There is no fee to apply for the permit or renew it, but you must complete this permit through the Idaho State Tax Commission before you can sell any goods or services.
• Check the state guide for industry-specific licenses: It is also possible that you will need state licensing for certain occupations – for example, restaurants or hair salons often require professional boards to license them. Additionally, each jurisdiction within Idaho will be able to set their own requirements for general licenses, occupational licenses, and zoning clearances.
• Check with local government too: To learn about local licensing regulations, contact the city clerk’s office of the municipality where your LLC is located and ask if your LLC will need to apply for any licenses to operate legally in the area.

Visit the State of Idaho Business Wizard for information on state-issued business licenses, permits, and certifications.

Understand state taxes 

In Idaho, LLCs themselves are not subject to a separate income tax, adhering to the “pass-through” taxation model. This means that the profits and losses of the LLC are directly reported on the personal tax returns of its members, avoiding double taxation at the corporate level. This structure simplifies tax filing for LLCs, as Idaho does not impose a distinct income tax on the entity itself.

• Idaho tax rates: Members of an Idaho LLC are responsible for paying state individual income tax on their portion of the LLC’s profits, with rates ranging from 1.125% to 6.925%, depending on their income bracket.
• Additional taxes: In addition to state taxes, all members must also pay federal taxes according to their individual tax brackets. Furthermore, if the LLC employs others, it must handle the withholding and remittance of state and federal payroll taxes, including contributions to unemployment insurance.
• Register with the Idaho State Tax Commission: Some Idaho-based LLCs–such as retail businesses that collect sales tax and those with employees–must register with the Idaho State Tax Commission to file and pay certain state taxes and/or fees. Registration can be done online or by submitting a completed paper form in person or through the mail.

Understand BOI reporting

As of January 1, 2024, a federal law requires certain business entities to file Beneficial Ownership Information—this includes LLCs, including those in Idaho. Each business will need to report information about its beneficial owners, meaning anyone who has ownership of or control over the company, to FinCEN as part of an initiative to stop financial crime.

You will only need to file once unless information about your LLC and its owners changes in the future, and the deadline depends on when your business was formed. If you created your small business prior to 2024, then you have all of the calendar year to complete registration. For businesses formed in 2024, the deadline is 90 days after confirmation of formation; in 2025, this will change to 30 days.

There are serious penalties for not filing your BOI information, so it is critical to understand your deadline and register accordingly.

Learn more about BOI reporting.

Post LLC tasks

Set up business bank accounts

Establishing business bank accounts is essential for managing finances, enhancing credibility, and separating personal from business expenses. In Idaho, the process typically requires your LLC’s Articles of Organization, an EIN (Employer Identification Number), and a resolution authorizing the account’s opening if there are multiple members in the LLC.

Most banks offer a variety of business accounts, including checking, savings, and credit cards, tailored to different business needs. Comparing fees, services, and account features across banks can help you choose the right partner for your business finances.

Additionally, consider the bank’s online banking capabilities, customer service, and any value-added services that could benefit your business operations. Often, a local credit union or bank is a good place to start, as they have lower fees than national chains. You can also look at online options, like Found, Relay, and Mercury.

Obtain a Certificate of Good Standing 

Idaho may not specifically use the term “Certificate of Good Standing,” but it offers two comparable documents to meet businesses’ needs, each serving a distinct purpose.

• Certificate of Existence: The first is the Certificate of Existence, which serves as proof of an LLC’s legal existence and compliance within the state. It details the LLC’s name, formation date, and its current operational status. Interested parties can obtain this certificate through the Idaho Secretary of State’s website, either online or by mail, for a standard fee of $10, with additional charges applicable for expedited processing.
• Certificate of Status: Alternatively, the Certificate of Status delves deeper, not only confirming the LLC’s existence but also detailing any filed amendments or mergers and verifying that the LLC is in good standing by meeting all financial obligations and report filings. The process to acquire a Certificate of Status is more intricate, often requiring direct engagement with the Secretary of State’s office.

For most LLCs, the Certificate of Existence generally suffices for routine business activities, such as licensing and banking. However, the Certificate of Status becomes important for more complex scenarios, like registering the business in another state or participating in legal proceedings.

Build a website 

A quality website is essential for any business, especially businesses in Idaho, in the modern digital era. A website functions as your company’s online storefront, providing a venue for showcasing goods and services, interacting with clients, and building your online reputation.

Follow these steps to get started:

1. Search for and purchase a domain name.
2. Sign up for web hosting.
3. Pick a web builder like Domain.com or GoDaddy to create a site with no coding experience necessary.
4. Tailor your site to your customers, adding appropriate pages, content, and images.
5. If you’re selling goods, add an e-commerce section to your site.
6. Review, test, and publish your site.

Domain name availability is a priority: The first step in creating a website is to register a domain name that either roughly corresponds to or matches your company name. However, the domain you want may not be available. Just as you search available business names, you’ll do something similar with domain names. You need to find one that’s similar to your business name and that’s available for purchase.

Cost to set up an LLC in Idaho

Average cost to set up an LLC: $100-$300

Starting an LLC in Idaho is a straightforward process, with costs that are relatively low compared to other business structures. You’ll pay incorporation fees and may choose to pay for a professional registered agent. Annual Reports aren’t filed in the state, so you won’t incur those fees.

• Incorporation fees: The primary expense is the filing fee for the Articles of Organization, which is $100 if filed online and $120 if filed by mail. This initial cost is mandatory for registering your LLC with the state.
• Registered agent service fees (optional): Additional costs may include hiring a professional registered agent service, ranging from $50 to $300 annually, though Idaho allows you to serve as your own registered agent.

Foreign LLCs

LLCs formed outside of Idaho that intend to do business in the state are required to register with the Idaho Secretary of State.

Follow these steps to register your foreign LLC to be eligible to do business in the state of Idaho:

1. Comply with Idaho’s LLC naming guidelines and make sure that your name is available for use in the state by searching the Idaho Secretary of State Business Search.
2. Appoint a registered agent with a physical street address in Idaho
3. File a Foreign Registration Statement (Limited Liability Company) with the Idaho Secretary of State online or by mail. There is a $100 filing fee (or $120 for mail filings).
4. Along with the Statement, an LLC must also submit either a Certificate of Existence or Certificate of Good Standing from the state where the LLC was formed. The certificate must be dated from no longer than 90 days from the date that it is turned into the Idaho Secretary of State.