How to start an LLC in Idaho in 2024

A limited liability company — or LLC — can be an avenue to further liability protection for sole proprietors. If you’re running a multi-member organization, the LLC route allows you to operate as a pass-through entity for tax purposes, helping you to avoid even more costly corporate taxes if you are incorporated. 

Idaho isn’t the cheapest state in which to establish an LLC, but the fee of $100 isn’t the highest, either. In addition, both annual reports and dissolution documents are free to file online. That means that throughout your business’s life, Idaho could end up being one of the cheapest states to form your LLC.

Here are the steps to forming an LLC in Idaho. 

1. Name your business.
2. Select a registered agent.
3. File for a certificate of organization.
4. Create an operating agreement.
5. Obtain an EIN.
6. Open a business bank account.
7. Fulfill tax and business license requirements.
8. File an annual report.

8 steps to set up an LLC in Idaho

1. Name your Idaho LLC

Before you can form your business, you need to name it. There are a couple of rules to take into consideration before naming an LLC in Idaho. First, make sure the name is available for use. This means it must be unique from any other business name already registered in the state. 

To verify its availability, search for the name using the Idaho Secretary of State’s business search tool.

Note that the legal suffix doesn’t matter. For example, if you wanted to name your business “Basque Kitchen LLC,” currently you can’t as there’s already a corporation named “Basque Kitchen, Inc.” There is a workaround to this restriction, though. If you get written permission from the other business to use the name, the state will allow your variation. 

Next, avoid words that might mislead consumers into thinking your LLC is government affiliated. Common examples include: 

• State department
• Treasury
• FBI
• CIA 

In addition to checking your name’s availability in Idaho, ensure the name is not nationally protected against infringement and that it is marketable. You can do so via the following methods: 

• Trademark search: Search the United States Patent and Trademark Office’s trademark electronic search system (TESS) to ensure the name is not federally protected from use by a new business. 
• Domain name search: Search the domain name version of your name online to ensure the domain is available for you to set up a business website. Some domain name providers, such as GoDaddy, offer a free domain search tool for this purpose. 
• Social media handle search: Search social media platforms to ensure the social media handle of your name is not already used. 

If you’ve landed on an available name that is marketable but you’re not ready to file your articles of organization, you can pay a $20 fee to reserve the name for up to four months by filling out an application for reservation of legal entity name on the Idaho Secretary of State website. 

Click the form link, then follow the prompts to create an account and reserve your name. To do so, you must provide your name, email address, password, contact information, the name of your business and your signature. You can opt to file a paper version of the form, but it will cost you another $20, totaling $40 in fees.

2. Select a registered agent

Another task you’ll need to complete before officially registering your Idaho LLC is designating a registered agent. A registered agent’s responsibilities include receiving and signing for legal documents sent to your LLC. You can serve as the registered agent yourself or you can select a lawyer or professional registered agent service to do the job for you. 

In Idaho, the LLC can serve as its own registered agent, as opposed to you serving as the registered agent as the business owner. But, in order for an LLC to serve as its own registered agent, the LLC must already be registered with the state. That means that during the first year, the LLC effectively can’t take on the role itself. If you’d like your LLC to take on that role in year two, you can file a statement of change of registered agent and submit the filing fee, which is currently $20.

An individual serving as a registered agent in Idaho must meet the following criteria:

• Be 18 years of age or older. 
• Be present at a designated registered agent address (such as a business office) during all regular local business hours throughout the year. This means no leaving for business travel or paid time off. 
• Be willing to receive business documents and alert the person who can address them in a timely manner.

Hiring a registered agent service offers LLCs the following benefits: 

• Schedule flexibility: Since the registered agent service is available during business hours to receive documents on the business’s behalf, business personnel can leave the office as necessary. 
• Reputation protection: Because business documents will be delivered to a third-party entity, embarrassing documents (such as notices an LLC is being sued) will not be delivered to the business in front of customers or employees. 
• Extra support features: Many registered agent service providers set up an online portal and scan received documents into the portal where LLC representatives can view them. To better ensure compliance by client companies, this portal often comes with other features, such as calendars with key deadlines and reminders if documents aren’t addressed in a timely manner. Some providers also provide legal counsel to client businesses as necessary.

If you need to hire a registered agent, look around to find the best deal and features to meet your needs. You can begin by reading our best registered agent services guide. 

3. File for a certificate of organization for LLCs

Now that you have your business name and registered agent pinned down, you’re ready to officially register your business with the state. In addition to the LLC name and registered agent address, you will need to provide: 

• Your LLC’s physical address. 
• Your LLC’s mailing address (if different from physical address).
• Your LLC’s formation date. 
• The name of your LLC’s registered agent. 
• The name and address of your LLC’s incorporators and directors. 

You can fill out the form on the Idaho Secretary of State’s website. Select “certificate of organization limited liability company” to get started. If you already created an account when you reserved a business name, log in and follow the prompts to file your form. If you don’t already have an account, create one now and then follow the prompts to fill out, pay for and file the form. 

The filing fee is $100 if you file online or $120 if you file a paper form. Online filings require payment by credit or debit card, while you’ll need a check or money order payable to the “Secretary of State” to pay the paper form filing fee. Once your paperwork is approved, you’ll receive your certificate of organization from the state of Idaho. Keep this certificate in a secure place with your other important LLC documents. 

New LLC reporting requirement alert 

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has implemented a new reporting requirement for all non-exempt LLCs starting on January 1, 2024. 

The requirement is called the Beneficial Ownership Information (BOI) report and it is estimated to only take about 20 minutes to complete. 

Here’s what you need to know:

• LLCs formed before January 1, 2024 have until January 1, 2025 to file.
• LLCs formed between January 1, 2024 and January 1, 2025 have 90 days to file from the confirmed date of the businesses’ registration.
• New LLCs formed after January 1, 2025 will have 30 days to file from the confirmed date of formation.

For all details, FAQs and to file, visit FinCEN’s BOI website. 

4. Create an operating agreement

While the state of Idaho does not require an operating agreement to form your LLC, we strongly recommend you create one. Doing so can protect the future of your LLC by offering the following benefits: 

• Dispute management tools: If you’re a multi-member LLC, this document outlines terms for how your LLC will operate. This clarity can help prevent or guide the resolution of member disagreements by clearing up confusion among members. In doing so, it helps to protect your company against dissolution due to irreconcilable member disagreements. 
• Confirmed limited liability protection: Parts of your LLC’s operating agreement, such as its confirmation that your entity is an LLC and that members own certain percentages of it, help to legally confirm the separation of your and your members’ personal assets from the business, thereby further confirming your members’ personal liability protection. 
• State default-laws protection: Without an operating agreement, your LLC must abide by certain state default laws regarding LLC operations. These laws may go against your LLC needs or business model. An operating agreement overrides those laws to ensure you can manage your LLC to best meet its needs. 

There are generic operating agreement templates available for free through services like Rocket Lawyer or Northwest Registered Agent. However, because this document is legally binding among your members, we advise you to consult with a business lawyer to ensure your operating agreement meets your LLC’s unique needs before your members sign it. For a fee, LLC formation companies such as Rocket Lawyer or LegalZoom also often offer legal consultation to help you draft your operating agreement.

5. Obtain an EIN from the IRS

An employee identification number (EIN) is a number assigned to your business by the federal government for the purposes of tax administration. It identifies your business much like a Social Security Number (SSN) identifies a person and allows you to file business taxes, apply for business loans and permits, open a business bank account and manage payroll taxes should you employ any workers. 

This part of the process is not only straightforward and quick, it’s also free. To apply, begin by visiting the IRS’s employer ID numbers page between Monday and Friday from 7 a.m. and 10 p.m. Eastern Standard Time. Scroll down and click “apply for an EIN online.” Then, provide the following information: 

• Your LLC’s name.
• Your LLC’s business address.
• Your Social Security number as the business owner or “responsible party” (someone who is in control of the business).
• The date your LLC was established according to your certificate of organization.

Once you submit the requested information, your EIN will be generated immediately. Print the confirmation document with your EIN and keep it with your LLC’s formation certificate and operating agreement. 

6. Open a business bank account

The main reason to operate as an LLC is the limited liability protection it provides. However, if you mix business and personal finances, you risk ‘piercing the corporate veil’ or commingling your personal and business assets. If a judge finds you’ve done so, it could threaten your liability protection in court cases. Opening a business bank account and keeping your finances separate is the safest way to ensure you don’t pierce the “veil.” 

Financial institutions typically request your certificate of organization and EIN to open a business checking account. Some may also ask for your LLC’s operating agreement and many require you to provide a minimum deposit. 

Visit a local bank and ask the requirements to open an LLC bank account. Follow their instructions to complete this step. 

7. Fulfill tax and business license requirements

Many businesses are required to apply for permits or licenses to operate within the state of Idaho. For example, you need to apply for an Idaho state tax ID and permit if any of the following circumstances apply to your LLC: 

• You’re required to collect sales or use tax.
• You need travel or convention permits.
• Your LLC sells alcohol or tobacco products.
• Your LLC requires select auditorium district permits.
• You hired employees. 

You can determine whether your circumstance calls for a state tax ID, business licenses or permits or a state tax permit by using Idaho’s business wizard page. This is a straightforward and free online form you fill out. The following information may be requested as you engage with the wizard:

• Your business industry. 
• The types of products and services you offer. 
• Whether you are hiring employees and/or contractors.
• Your business type (in this case, an LLC). 

When you complete the form, the wizard provides a list of permits or licenses you may be required to obtain and who to contact to obtain them. 

Pro tip: Some LLC owners elect to have their businesses taxed as an S corporation so they can pay themselves as an employee. Depending on how you structure your finances, this move could potentially save you money on Social Security and Medicare taxes.  

Miranda Marquit, a freelance journalist based in Idaho Falls, has set up three LLCs in her home state. She has only filed with the Idaho state tax commission once. 

“For my partnerships [which have no employees], we just got a federal EIN,” says Marquit. “For my individual Miranda Marquit Freelancing, LLC…I switched my tax election to an S corp. Once I did that and made myself an employee, I had to get a state tax ID in addition to the EIN.”

To learn more about an S-corp LLC election, read our guide on how to convert an LLC to an S corp.

8. File a free annual report 

Every year, you need to file an annual report by the end of your LLC’s formation anniversary month. For example, if your LLC formation date falls in August 2023, your first annual report filing would be due by August 31, 2024.

Unlike virtually every other state, Idaho does not charge a fee for annual filings. However, you must file your report within 60 days of its due date or your LLC will be administratively dissolved. You can file an annual report using your Idaho SOSbiz account (the same one you set up when you filed your certificate of organization).

Filing an Idaho LLC annual report is a quick process that requires updating any basic business information, like your LLC’s address, registered agent addresses or any changes in company governance. On the secretary of state website, click “file annual report” and follow the prompts to sign into your account, fill out the form and submit it. 

Find the best LLC services for Idaho: Best LLC services of 2024

Frequently asked questions (FAQs)

Can I set up an LLC for free in Idaho?

No, you cannot set up an LLC for free in Idaho. There is an initial filing fee of $100. The fee bumps up to $120 if you file via paper form rather than online. However, many LLC formation companies, like Bizee and ZenBusiness, offer a bare-bones basic LLC filing service for no additional fee. You will still need to pay $100 to the state, though.

Over the course of forming your LLC, you may also have to pay to reserve your business name ($20 to $40), for legal consultations (averaging $60 to $70 per hour) and to hire a registered agent service ($0 to $300 per year).

Do Idaho LLCs pay taxes?

Under most circumstances, there are no taxes for an LLC in Idaho, as the LLC is a pass-through entity by default. Of course, you will need to cover payroll taxes and sales tax if they apply to your business activities. But your LLC’s profit or losses will pass through as personal income on your or your members’ personal state and federal income tax filings.

One exception is if you take the S corp election to lower your Social Security and Medicare taxes. While you won’t owe federal taxes on distributions you take as the business owner (as opposed to a salary you take home as the LLC’s employee), your LLC will owe an additional corporate state tax. In 2022, this tax was 6% of the business’ profit, but that number has been inching downwards since 2012.

Do I need a registered agent in Idaho?

Yes, you need a registered agent address in Idaho. For convenience, many LLCs appoint one by hiring a registered agent service.

However, if you are available at a set address to receive documents during all business hours all year long, you can serve as the registered agent yourself. During the first year of business, the LLC entity cannot serve as its own registered agent, but it can begin doing so in its second year.

Do Idaho LLCs need to file an annual report?

Yes. However, unlike in most states, filing an annual report in Idaho is free. Your filings are due by the last day of your business’s anniversary month, but, in all reality, you have another 60 days to file them. While there are no late fees for filing them, if you do not file them within 60 days of their due dates, your LLC will be administratively dissolved.

How do I dissolve an LLC in Idaho?

One way to dissolve an LLC in Idaho is by not filing your annual report. Sixty days after the due date, your LLC will dissolve. If you’re more proactive, you can use your SOSbiz account to file for your LLC dissolution online for free. You’re also free to file a paper version of this form, but paper filing does come with a $20 fee.