How to Start a Business and Form Your LLC in Idaho

Idaho Business Facts and Environment

ID Business Facts

As one of America’s important agricultural states, Idaho actively produces close to a full third of all the potatoes grown in the US. Every type of spud from wheat, to soft white, hard red and dark northern spring are grown in the state. Idaho is home to such major industries as lumber and wood production, food processing, machinery, paper and chemical products, electronics manufacturing, mining, and tourism. The world’s largest processor for barrel cheese is located in Gooding, Idaho. The factory is capable of producing 120,000 metric tons of barrel cheese each year.

Major Companies Headquartered in Idaho

Although Idaho is known as the Gem State, it is home to some of the nation’s largest corporations, including Micron Technology, WinCo Foods, Lamb Weston Holdings, Boise Cascade, and J.R. Simplot, to name a few.

Startup Environment

Idaho is one of the most competitive states in terms of business. It currently ranks No. 22 in Forbes’ 10th annual Best States for Business. In 2017, Idaho ranked No. 28. Some of the major industries in the Gem State include lumber/wood products, food processing, chemicals, paper, mining as well as tourism.

Step 1: Decide on a Business Structure

There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.

• A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
• A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
• An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.

Step 2: Pick a Business Name

Choosing a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that the better). In Step 3 we’ll show you how to search for the name in Idaho, but we highly recommend you do the following before searching Idaho state databases:

• Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
• Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
• Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if your name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use Google at a fairly advanced level you can reasonably clear a name yourself.
  
  Tip: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.
  
• Make sure your company name choice is available by searching the Idaho Business Entity Database and doing a name search on the State of Idaho website. NOTE: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).

NOTE: Familiarize yourself with the Idaho naming guidelines. LLC entity names need to contain the words Limited Liability Company or the abbreviation LLC, and certain words are restricted or prohibited.

Restrictions on Idaho Business Name & Business Purpose

1. The name of a business corporation should contain the word “corporation,” “incorporated,” “company,” or “limited,” or the abbreviation “Corp.,” “Inc.,” “Co.,” or “Ltd.”
2. The name of a limited partnership should contain the phrase “limited partnership” or the abbreviation “L.P.” or “LP” and may not contain the phrase “limited liability limited partnership” or “registered limited liability limited partnership” or the abbreviation “L.L.L.P.,” “LLLP,” “R.L.L.L.P.,” or “RLLLP.”
3. The name of a limited liability partnership should contain the words “limited liability partnership” or “registered limited liability partnership” or the abbreviation “L.L.P.,” “R.L.L.P.,” “LLP,” or “RLLP.”
4. The name of a limited liability company should contain the phrase “limited liability company” or “limited company” or the abbreviation “L.L.C.,” “LLC,” “L.C.,” or “LC.”
5. The name of a limited cooperative association should contain the words “limited cooperative association” or “limited cooperative” or the abbreviation “L.C.A.” or “LCA.”

Step 3: Register the Business

Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and selected your business name, here are the requirements to register your business in Idaho.

How to form an LLC in Idaho

• File the “Articles of Organization” with the Idaho Secretary of State.
• Once the articles are filed and approved you will then need to properly organize the LLC (this also applies to “1-person LLC’s”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more.
• Hire a professional Registered Agent.
• Hold an Organizational Meeting to take contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more. (yes, even for 1 person LLCs).
• Optional: Elect S-Corporation status with the IRS by filing IRS Form 2553. Yes, even an LLC can choose to be taxed as an S-Corporation (or even a C-Corporation). 

TIP: Speak to your tax advisor about this important issue because it adds complexity to your LLC most people would rather avoid.

• Optional: Create an operating agreement. This is a legal document that outlines ownership and operating procedures of your LLC.

How to Incorporate in Idaho

• File the “Articles of Incorporation” with the Idaho Secretary of State.
• Hold an Organizational Meeting to properly organize the corporation, take contributions from the shareholders, elect directors and officers, issues stock, adopts the Corporate Bylaws and more.
• Hire a professional Registered Agent.
• Optional: Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.

Considerations when incorporating or forming an LLC in Idaho

• The Idaho Secretary of State could take anywhere from 4 to 5 weeks for mail filings to process the paperwork. This may increase during peak periods.
  
  Tip: Check our order form to see how long Idaho is currently taking to process regular and expedited orders.
  
• A Registered Agent is required for every Idaho Corporations and LLC. The chosen registered agent must have a physical street address in Idaho. A professional Registered Agent who will provide their address and forward any important documents to you. This is convenient if you have to move, since you won’t have to file forms or pay fees, (just update your address with your agent).

How to File a DBA in Idaho

• Check the state database of business names.
• Complete the Certificate of Assumed Business Name form.
• File the Certificate of Assumed Business Name form with the Idaho Secretary of State
• Pay $25 for the filing fee.

Ready to Start Now? Let Us Do The Work

Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.

• Learn more about our business formation service
• Read our verified reviews and 100% Satisfaction Guarantee
• Contact our friendly support team if you have any questions

Step 4: Obtain Your Federal Employer Identification Number

Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.

To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.

TIP: We will obtain your EIN for you if you we form your company.

Step 5: Open Company Bank and Credit Accounts

To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork, b) your EIN and c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).

Top 5 Major Banks in Idaho

• U.S. Bank
• Wells Fargo Bank
• D.L. Evans Bank
• KeyBank
• Umpqua Bank

TIP: Our business formation service includes a free banking resolution for your use.

Step 6: Set-up An Accounting System

Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.

Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.

Step 7: Obtain Licenses and Permits

Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

TIP: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.

Step 8: Hire Employees (if applicable)

If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.

Step 9: Obtain Business Insurance

There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection. Click here to view our preferred provider of business insurance online.

Step 10: Systemize and Organize

Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.

Step 11: Branding and Marketing

Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.

Step 12: Annual and Ongoing Requirements

DBA: Your Fictitious Business Name should be valid for 5 years (unless you change company name or other information listed on the FBN) at which point you’ll need to renew it with the county.

LLC: Idaho LLCs are required to file a Periodic Report with the Idaho Secretary of State every year by the anniversary of the date the LLC was formed, in addition to general taxation. Information on your business’ taxes can be found here.

Corporation: Corporations in Idaho should file a report with the Secretary of State of Idaho each year by the anniversary of the date they were incorporated.

Important Idaho Contacts

Idaho Secretary of State

Business Entities (for Corporation and LLC filings)
PO Box 83720
450 N. 4th Street
Boise ID, 83702
Phone Number: (208) 334-2301

Idaho Taxation Departments

• Idaho State Tax Commission

Idaho Labor and Employment Departments

• Idaho Department of Labor

Idaho Startup Resources

1. Small Business Administration (SBA) Idaho District Offices

• Boise District Office

2. SCORE Idaho

• SCORE Idaho serves the small businesses and entrepreneurs of Idaho.

3. Idaho Legal Statutes

• Idaho Uniform Business Organizations Code (IUBOC) – this provides a general corporate form for the conduct of lawful business
• Idaho Uniform Limited Liability Company Act – the specific act that applies to Idaho LLC’s.
• Idaho Professional Service Corporations Act – this includes any type of service to the public that requires that members of a profession rendering such service obtain a license or other legal authorization

4. Idaho Chambers of Commerce

• Idaho City Chamber of Commerce
• Boise Metro Chamber of Commerce
• Garden City Chamber of Commerce
• Star Chamber of Commerce

5. Idaho Business Portal

• The Business.Idaho.Gov has lots of useful information including lists of incentives and financing to help you get started.

6. Angel.co Idaho Startups

• A list of all 200+ Idaho Startups and 4,700+ Idaho angel investors registered with Angel.co. Good research resource.

7. Idaho Business News

• Idahobusinessreview.com
• Idaho Statesman
• Idaho State Business Journal

8. Ct.gov

• The Idaho Economic Development Association (IEDA).

9. Idaho Small Business Association

• The Idaho Small Business Development Center (SBDC) is a statewide, university-based organization which has been helping small businesses succeed since 1986.

10. Idaho Green Business Program

• GreenWorks Idaho, the organization behind the Idaho Green Expo, is a grass-roots, community-based, non-profit organization building community partnerships for a sustainable future.