How to Start Your Own LLC in Idaho

While forming an LLC may initially seem complicated, following a step-by-step approach ensures your business is legally compliant and positioned for growth. This guide will walk you through choosing a unique business name, appointing a registered agent, filing your Certificate of Organization, drafting an operating agreement, obtaining licenses and permits, and understanding taxes.

1. Naming Your Idaho LLC

Choosing a business name is a critical step because it represents your brand and forms the first impression with customers, partners, and investors. Your name should be memorable, reflect your business purpose, and comply with Idaho's naming regulations.

Start by clearly defining your business concept, which will guide the naming process. Brainstorm names with trusted friends or advisors and consider online business name generators for creative inspiration. However, generators should only complement human creativity—they may not account for industry-specific nuances. Once you have a shortlist, check for domain availability and search the internet for similar business names to avoid confusion.

Idaho requires that your LLC name include the words "Limited Liability Company" or an abbreviation such as LLC or L.L.C. The name cannot include words that imply your business is a government entity or use restricted words like bank, insurance, or university without state approval. Additionally, the name must be distinguishable from all other registered businesses in Idaho. Checking the U.S. Patent and Trademark Office (USPTO) ensures the name is available nationally and avoids trademark infringement.

After narrowing down your options, you can reserve your LLC name with the Idaho Secretary of State using the Name Reservation form. This is done online or via mail. Online reservations cost $20, while mail reservations are $40, and the reservation is valid for four months.

Doing Business As (DBA)

If you plan to operate under a different name than your LLC, such as when launching a new product line or brand, you need to register a DBA (known in Idaho as an "Assumed Business Name"). A DBA allows your LLC to legally operate under multiple names and open separate bank accounts for each brand. The DBA registration fee is $25 online.

2. Appointing a Registered Agent

Every Idaho LLC must designate a registered agent. The registered agent is responsible for receiving legal notices, tax forms, and other official correspondence on behalf of your business. This ensures you never miss important documents that could affect your LLC's compliance or legal standing.

The registered agent can be an individual or a professional service. Requirements include:

• Must be at least 18 years old
• Have a physical Idaho address (no P.O. Boxes)
• Be available during regular business hours
• If a business, it must be registered to operate in Idaho

While you can serve as your own registered agent, many entrepreneurs prefer a professional service for privacy, convenience, and consistent availability. This is especially useful if you travel frequently or run your business from multiple locations.

3. Determining Your Management Structure

Idaho LLCs can be either member-managed or manager-managed.

Member-Managed

All members participate in daily operations and decision-making. This structure works well for small businesses where owners are actively involved.

Manager-Managed

One or more managers run the LLC, while other members are passive investors. A member can be a manager, but at least one manager must be a non-member. This setup is useful for larger LLCs with silent investors or members who do not want daily involvement.

If you do not specify the management structure in your Certificate of Organization, Idaho defaults your LLC to member-managed. Choosing the right structure affects decision-making, voting rights, and operational responsibilities, so consider the long-term goals of your business before deciding.

4. Filing a Certificate of Organization

The Certificate of Organization officially creates your LLC in Idaho. It is filed with the Idaho Secretary of State and requires the following information:

• LLC name
• Principal office address
• Registered agent information and address
• Name and address of at least one member
• Management structure

The filing fee is $100. Online submissions are typically processed within 7–10 days, while mail filings can take up to three weeks. Expedited filing options are available for an additional fee.

Idaho Secretary of State Contact Information

Office Address:
450 N. 4th Street
Boise, ID 83702

Mailing Address:
P.O. Box 83720
Boise, ID 83720-0080

Phone: (208) 334-2301
Email: business@sos.idaho.gov

Once approved, your LLC legally exists and can begin business operations.

5. Drafting an Operating Agreement

Although Idaho does not legally require an operating agreement, having one is strongly recommended. This document outlines ownership, roles, voting procedures, profit sharing, and rules for adding or removing members. A well-drafted operating agreement can prevent disputes and reinforce liability protections.

Key Components Include:

• LLC name and principal address
• Duration of the LLC
• Registered agent information
• Member information and ownership percentages
• Management structure and voting rights
• Allocation of profits and losses
• Rules for amending the agreement or resolving disputes
• Record-keeping procedures

Even single-member LLCs benefit from an operating agreement because it formalizes operational procedures and supports your liability protections. While templates are available online, consulting an attorney ensures the agreement meets Idaho legal standards and suits your business needs.

6. Obtaining an Employer Identification Number (EIN)

An EIN is issued by the IRS and functions as your LLC's tax identification number. It is required for LLCs with more than one member, if you hire employees, or if you plan to open a business bank account.

To obtain an EIN, apply online through the IRS website. You must provide information about the responsible party, the individual who controls or manages the LLC's funds and operations. EINs are issued immediately online, and the process is free.

7. Licenses, Permits, and Compliance

While Idaho does not have a general state business license, many businesses require specific licenses or permits depending on the industry and location. Federal, state, and local permits may include:

• Industry-specific licenses for construction, childcare, food handling, healthcare, finance, etc.
• Seller's permit for collecting sales tax
• Local zoning, building, fire, and signage permits
• Health licenses for food or medical businesses
• DBA registration for alternative business names

Operating without the required licenses can result in fines or legal action. It is advisable to consult a business attorney or use professional compliance services to verify requirements for your industry.

8. Determining Your Tax Status

By default, Idaho LLCs are pass-through entities, meaning profits and losses flow directly to members' personal tax returns.

Single-Member LLCs

Taxed as a sole proprietorship. Income is reported on Schedule C, and self-employment taxes apply.

Multi-Member LLCs

Taxed as a partnership by default. File IRS Form 1065, and members report their share of profits on personal returns, paying self-employment taxes.

LLCs Can Elect Corporate Taxation

• C-Corporation: Profits are taxed at the corporate rate; distributions to members are subject to personal taxes ("double taxation"), but dividends avoid self-employment taxes.
• S-Corporation: Income passes through to members, but owners must pay themselves a reasonable salary subject to payroll taxes. Additional profits distributed are not subject to self-employment taxes, potentially reducing overall taxes for high-income LLCs.

Idaho state taxes: Pass-through income is taxed at 5.8% for individuals, and corporations at 6%. Additional obligations may include sales, withholding, and unemployment taxes.

Additional Steps After Formation

Once your LLC is established, take steps to separate and protect your business:

Open a Business Bank Account

Keeps personal and business finances separate, supporting liability protection and easier accounting. You'll need your EIN and Certificate of Organization.

Apply for a Business Credit Card

Helps build business credit, pay startup expenses, and support future financing.

Get Business Insurance

Essential to protect your investment. Types include general liability, professional liability (E&O), workers' compensation, property, equipment, commercial auto, and Business Owner's Policy (BOP).

Maintaining organized records of all documents, contracts, and filings is crucial for compliance and smooth operations.

Annual Reporting

Idaho LLCs must file an annual report to remain in good standing. The report is due by the last day of the month in which your LLC was formed. There is no filing fee when submitted online. Late filings can affect your LLC's active status and legal protections.

Idaho LLC FAQs