Entrepreneurship is exciting—the thrill of developing a winning product or service, bringing that idea to life, and making life better for your clients—it’s fun. But unfortunately, it’s not free. Long story short: starting a business has a price tag. LLCs are no exception.
If you’re hoping to start an LLC in Idaho, you’ll quickly learn that you’ll have a pretty long list of fees for forms, licenses, and applications that you’ll need to get started. Some of those are optional fees, and some are unavoidable. In this guide, we’ll walk you through all the costs you can expect when starting an Idaho LLC. By the end, you’ll have a clear picture of how your new business will impact your wallet.
What’s the least amount I have to pay to form an LLC in Idaho?
If you’re crunching the numbers before diving right in, good on you! Planning ahead is a surefire way to start your business off on the right foot. But let’s make one thing clear: the phrase “cost to start an LLC” is a bit deceptive. That’s because you don’t want to get stuck focusing on the “day one” expenses of business.
That’s right—when budgeting for start-up costs, you need to account for the costs you’ll pay today and the costs you’ll pay a year or two down the road.
So let’s talk start-up costs and ongoing costs for your Idaho LLC. But to keep things simple, here we’ll cover the non-negotiable costs. Later on, we’ll talk about services that are nice to have (but you can live without if you have to).
ID LLC Start-up costs
There are two primary start-up costs in Idaho. The most important one is the Certificate of Organization. The fee for this document is $100 ($120 if you file by mail because Idaho tries to encourage filing online). You can’t avoid this cost, though. After all, the Certificate is what officially forms your business in the state. Without it, you’re not a recognized business.
A lot of LLCs will also need to get licenses in order to run a compliant business. Idaho doesn’t have a statewide general business license that every entity in the state needs to obtain. Instead, the state allows counties to decide if they’ll require a license. You’ll have to contact your local county clerk to learn if a license is required in your area.
You might also need to obtain industry-specific licenses for your profession, but that step will also take some research on your part. Idaho’s Licenses, Permits, and Regulations is a good place to start that research.
Since both the professional and local licenses are very individualized, we can’t possibly list all of the different application fees. Every board and county gets to set their own fees. Just keep in mind that you’ll probably have to pay for one or more licenses starting out.
Ongoing costs for an LLC in ID
If your business lasts (and we’re confident it will), then you’ll have several ongoing costs. These include license renewals, annual reports, and taxes. Let’s dig into those prices and fees.
Even though you don’t have to worry about a statewide general business license, you aren’t off the hook when it comes to renewing licenses. Because both professional and local licenses expire. The expiration date varies from one license to another, but they’ll come up. And just like each licensing board has its own initial application fees, each board requires a different renewal fee. When you obtain your licenses, we recommend taking note of the renewal requirements for your area and your industry so none of the fees surprise you.
In Idaho, one of the biggest annual costs you’ll have will be taxes. Idaho keeps theirs relatively simple (as far as taxes go). If your LLC is taxed as a corporation, you’ll pay a flat rate of 6.925%. This is commonly referred to as the Business Income Tax. LLCs taxed as pass-through entities pay a range between 1.125% and 6.925%.
If your business is involved in sales, you’ll also need to collect the state sales tax (4%). But you can’t just jump right into collecting the tax. First, you need to obtain a seller’s permit. You can learn more about this permit here.
There’s also a wide variety of miscellaneous business taxes that might apply to your LLC: beer, cigarettes, and mining are just a few examples of Idaho’s industry-specific taxes. For more information on these taxes (and just taxes in general), check out the Idaho State Tax Commission.
Most states require LLCs to file some version of an “annual report,” or a document that informs the state about the current standing of your business. This document is usually required in addition to annual tax reports, since it usually includes information about your business address, members, your registered agent, and so on.
In Idaho, the annual report is due each year by the end of your LLC’s anniversary date (so it’d be due by June 30 if you filed on June 7. It’s easiest to file this report online. But unlike a lot of states, Idaho does not charge a filing fee for this report—provided you file on time. Late fees can get pesky, so it’s well worth the effort to file the report on time.
What are the discretionary costs to form an Idaho LLC?
When you’re starting your business, your budget is usually pretty tight. Prioritizing costs can get tricky. The costs we listed above are unavoidable. Well, technically, you can avoid them, but you’ll be heavily penalized if you do. And there’s not much point to spending all that money on starting a business only to knowingly let it be dissolved because you didn’t pay your ongoing costs.
But if you can help it, doing the “bare minimum” is probably not the best way to start your business. There are plenty of discretionary costs you can pay for certain services that make life easier. Here, we’ll dig into those costs—and why you might consider paying them.
1. Name reservation application
Naming things can be a bit tricky; after all, sometimes inspiration is a little lacking! And since Idaho doesn’t allow you to use a name that someone else has already claimed, you have to work even harder to pick one that’s unique, memorable, and just right for your business.
It’s a multi-step process, really: you have to brainstorm name ideas, choose just the right words, meet state name requirements, and of course, ensure that the name isn’t already in use (you can check using a Business Search).
If you’re like a lot of people, you probably want to ensure that your hard work doesn’t go to waste once you’ve created the perfect name. So you have to lay claim to your new business name. You can do so either by filing your Certificate of Organization, or by filing an Application for Reservation of Legal Entity Name. You should only file this form if you’re not yet ready to file your Certificate. Otherwise, you’d be wasting your hard-earned cash. If you file online (recommended), then the filing fee is just $20. Mail-in filings cost an additional $20. But regardless of how you file, your Application ensures that your name is protected for four months.
2. Obtaining an Assumed Business Name (ABN)
Wait—didn’t we just cover business names? Yes. But there’s a distinction: your business name, which you’ll write in on your Certificate of Organization, is the legal name of your business. An assumed business name, sometimes called a DBA, trade name, or fictitious name, is like a nickname for your business. For example, your legal name might Joseph Smith, but your friends call you Joe for short. Joe is a perfectly valid name, but you can’t put it on legal paperwork. You’d have to legally change your name to do so.
An Assumed Business Name acts kind of like a nickname for your business; some LLCs and corporations also use Assumed Business Names to establish new product lines or new “businesses” under the LLC “parent company.” But regardless of why you use an Assumed Business Name, if it differs from your legal name, you need to register it before you can use it.
Quick note: registering an Assumed Business Name in Idaho does note prevent other people from using it; the registration simply establishes a legal record of who’s doing business under a given name. Only the names of incorporated entities like LLCs and corporations are protected for exclusive use.
To register a name (once you’ve determined that it’s not infringing on the names of incorporated entities), you can file a Certificate of Assumed Business Name. There’s a $25 fee for this document as long as you use SOSBiz. Mailed files cost $45. Thankfully, your registration lasts indefinitely; there’s no need to renew your ABN. The only “maintenance” you’ll have to do is filing a Cancellation or Amendment form if you need to change your name or stop using it.
For more information on how to register and maintain an ABN, check out our guide to Idaho Assumed Business Names.
3. LLC formation services
Paperwork is a massive hassle. And unless you’re starting an LLC to help other Idaho residents with their paperwork, odds are you don’t want to deal with much paperwork yourself.
The bad news? Paperwork is an unavoidable part of starting an Idaho LLC: the Certificate of Organization, professional licenses, local licenses, sales permits, annual reports—the list goes on and on. The good news? You can hire an LLC formation service to do the pesky paperwork for you.
Of course, there’s some cost involved. And while there are a lot of great LLC formation services, they aren’t all created equal. And they all have different price points.
Many LLC formation services offer a wide variety of packages, with basic options starting at low prices like $39 from Zen Business (one company, Incfile, even offers a starter package for $0). But if you’re willing to shell out some serious cash for comprehensive assistance, you’ll find package prices going as high as $799.
These services are completely optional; you can DIY your Idaho LLC formation. But many entrepreneurs find the time saved is worth the money. If you do opt to hire a service, please make sure you take the time to understand what you’re buying. Some services charge one-time fees, and others tack on “free services” that will cost you next year. If you don’t read the fine print, you can get slapped with unexpected service fees. And surprise bills are never fun.
4. ID Registered agent services
Idaho law clearly states that every LLC must designate a registered agent to act as a middleman between your business and the state. Long story short, the registered agent accepts service of process (and any other official communication from the state) on your behalf.
Technically, this is another thing you can DIY; Idaho allows you to serve as your own registered agent. However, in our opinion, it’s worth the expense to hire a registered agent.
Why? For starters, a registered agent’s address becomes part of the public record; anyone in the state can find that address. That leads to spam mail (sometimes worse). Plus, a registered agent must be present at the registered address during all standard business hours. If you serve as your own, you’d be tied down to your location constantly. A registered agent service prevents those annoyances. A service will also help you keep track of annual filing requirements, license renewals, and more.
These services typically charge an annual fee. For example, annual fees for our top 4 Idaho registered agent services range from $99 to $299 per year depending on the service you choose. That said, some offer the first year free if you use them as an LLC formation service.
Quick Note: If you need to later down the line, you can always change your registered agent.
5. Expedited filing fees
Idaho’s Secretary of State usually takes 7-10 business days (upon receipt) to process your Certificate of Organization or other business documents. That window of time varies based on order volume, time of year, and so on, but you can expect it to take a little more than a week.
If that sounds like too long to wait, you can pay an additional fee (for example, $40 for the Certificate of Organization) to have your filings expedited. That cuts the processing down to 8 business hours. There’s same-day processing, too, which costs $100 extra.
Those expediting fees aren’t unreasonable (especially the smaller one for 8-hour processing). So it might be worth the extra expense to expedite, but patience works, too. You can let your budget and your timetable be the deciding factors here.
6. Business attorneys
Starting a business is a complicated process. And it’s a legal one. We do our best to make the process seem less daunting with guides like this one. But at the end of the day, we can’t write a guide that would cover every single question every business will ever face. That’s because your business is unique.
Business attorneys, however, can talk you through all the nuances of forming and running your business. In many cases, the advice of an attorney can save you thousands by helping you avoid expensive legal mistakes.
However, the upfront costs of hiring a business attorney can be pretty pricey. For example, many attorneys charge per hour, with rates ranging between $150-$350. Others offer “LLC formation packages” for flat rates that fall between $500-$2000. And of course, those fees vary based on the attorney’s experience, location, and so on.
If you’d like to hire one, we recommend checking out sites like Avvo.com. Their database is nearly comprehensive, so it’s a great way to search Idaho business lawyers. You can also narrow results by location, cost, overall satisfaction rating, and more. It’s the best place to look to find the right legal consultation for your business.
Long story short: starting an Idaho LLC can be a pretty pricey endeavor. If you look at each cost separately, it doesn’t seem too bad (even the Certificate of Formation is a manageable $100). But when you add them all up or tack on some additional services, the total price tag grows pretty quickly.
Thankfully, since you’ve read this guide, you know what you’re up against. And sometimes, knowing is half the battle—and now you’re armed with all the information you need to budget the start-up costs so you can start your Idaho LLC off on the right foot. We wish you and your new business the best!