Idaho is continually evolving as a very popular place to live, raise a family, find your dream job, or even run your own business.
If you would like to start your entrepreneurial journey by taking the first steps to start your own business, you will find that registering a business in Idaho is a pretty simple and straightforward process. This is because of the state’s efficiency and unmatched support for new businesses starting out.
There is an abundance of different business development centers with the sole focus of helping start-up entrepreneurs and those already operating a small business to develop, maintain, and be as successful as possible on a local, national, and international level.
Idaho’s ongoing support for small businesses can be seen with the state’s approach to encouraging new businesses to register within the state. With access to many different business development centers, low corporate income taxes, affordable homes, paired with a low cost of living, generous Idaho Secretary of State filing fees, a solid education system providing many skilled workers, and good infrastructure, it will come as no surprise why many people choose Idaho to register their business.
How to Register a Business Name in Idaho – 7 Easy Steps
The Idaho Secretary of State makes it reasonably easy to register your business name. There are three ways you can do this:
- 1. Do it yourself directly on their website.
- 2. Pay a document filing company that can register everything online for you – there is a modest fee for this but it saves a lot of time and ensures it is done correctly.
- 3. Hire an attorney or accountant to file and register your new company – there are higher fees associated with this.
Step 1 – Determine your registered name
Firstly, you must determine that your business name is unique and not being used by someone else. A business registration company can do this research on your behalf or alternatively, you can search directly on the Idaho Secretary of State website.
Once you have established your name is available you can register a business name in Idaho directly on their website if you are comfortable with the process. Or, if you want a company to do this for you that specializes in this, you can use an online registration service to do it.
These document filing companies usually offer a free registered agent service for one year with most of their packages which is often a necessity for new businesses and those being registered by foreigners with no U.S. address.
Before doing any of this, you must decide on the right structure.
Step 2 – Choose the right business entity
You need to choose the right type of business to register and the most common options are a limited liability company (LLC) or an incorporated company (Inc.). If you are keeping things really small and simple (one or two people), then you may consider a sole proprietorship or a general partnership.
Even if you plan to be a solopreneur, it is usually more beneficial for you to register an Idaho LLC to make sure, as the owner, you have limited liability under this structure, and so you can benefit from the pass-through tax advantages.
Here is a quick rundown of the various options and what they might mean to you:
- Limited Liability Company: An Idaho LLC is often the best route for most entrepreneurs because the structure comes with personal asset protection, no double taxation, is fairly easy to maintain, and does not have high registration or annual renewal costs. Through LLC formation you have better tax flexibility and income can be taxed as a pass-through entity like a sole proprietor or partnership, or as a corporation.
- Incorporated Company: An Idaho Corporation offers personal asset protection and your company can own property, vehicles, incur liabilities, and is responsible for its own debts and can conduct business without the owners risking their personal assets such as their homes, cars, personal savings, retirement, etc. On the flip side, owners of sole proprietorships or partnerships face unlimited liability for both business and personal assets.
Step 3 – Make sure your name is not being used by another company
This may seem obvious, but if you check the Idaho Secretary of State website and see that your chosen business name is available, it doesn’t mean that someone else is not using the same or similar name, particularly in another state.
Many people register an “official business entity name” and trade under a different name. This is called an Idaho dba, or “doing business as” name or assumed trading name, and needs a separate DBA certificate.
You will want to do a Google search for your official name and your desired trading name (if different) to make sure no one else is using this name. Most importantly, you will want to make sure you can get an easy-to-remember website domain name that is not being used by someone else.
Having an awesome name or trading name for your business can be crucial to your success, so making sure the domain name is available too, and registering it right away, is equally as important.
Finally, if you go to the Idaho Secretary of State website and discover that someone else has registered the name you would like, you can search for variations of that name by adding a word before it or after it, or using some other variations until you find a name that is available and acceptable for you.
Step 4 – Request an Employer Identification Number (EIN)
Once you have registered your new business in Idaho you will need to get an EIN for a number of reasons. These include paying taxes for your business, opening a bank account, obtaining credit cards or lines of credit, establishing terms with vendors and suppliers, hiring employees, and more.
There are only a few instances where you likely won’t need an EIN. More often than not, many business activities are just not possible without having an EIN.
An EIN is the business equivalent of a social security number and is used to track your business dealings. Even if you do not intend to hire employees, you will almost certainly still need an EIN for your Idaho company and it protects you from having to use your social security number.
An EIN (also known as a federal tax id) is free to obtain from the IRS and you can apply online but if you are not comfortable filling in forms you can use a third-party document filing service to do this for you for a small fee. This ensures you are 100% compliant with the law and they handle everything with the IRS.
Step 5 – Obtain the Required Business Licenses and Permits
To operate your business in Idaho you must comply with federal, state, and local government regulations. Idaho does not require all businesses to have a “general” license to operate but depending on the type of business you start, or the location of your business within the state, you might need certain licenses and permits.
For example, if you open a restaurant or similar food-related business you will most likely need a health permit, sales tax permit, facilities permit, and others. If you plan to sell alcohol, you will need a liquor license.
You must find out how to obtain the necessary Idaho business licenses and permits for your business and fill out the appropriate forms. If you follow the link we have provided you can enter the type of business you plan to operate and the State of Idaho will tell you what type of license or permit you need and who to contact.
Alternatively, you could hire a professional document filing company to do this for you. It eliminates a lot of time and hassle and ensures you are correctly complying with the law.
Step 6 – Determine Your Business Employer Requirements
There are several things you need to check regarding your responsibilities as an employer in Idaho because there are requirements you must meet at the federal and state level. These could include various workforce commissions, safety, and state tax obligations, as well as labor law requirements including the minimum wage in Idaho and employee rights and remedies under the Idaho minimum wage act.
To learn more about Idaho employer resources take a look at the Idaho Labor Cabinet website.
Step 7 – Open a Business Bank Account for your Idaho Company
As a new business owner, you should seriously consider separating your personal and business bank accounts to make it easier to track and account for your income and expenses. For certain business types, such as an LLC or a Corporation, it is essential that you open a separate business bank account to maintain your liability protection.
Once you have your EIN and your company registration documents, coupled with your driver’s license, you are ready to go to the bank and open your checking account.
Don’t worry, this won’t be expensive or leave you burdened with hefty monthly fees to pay – there are many free business bank accounts out there for you to choose from. Each has its different features and benefits, so you can decide what bank and checking account best suits your needs.
Summarizing Registering a Business in Idaho
Idaho has a solid business ecosystem, tailored specifically for businesses both large and small, and it is constantly improving too! Idaho’s focus on specifically aiding small businesses is constantly improving, with many different business development centers littered around the state and free support systems to help out startups and businesses already in operation.
Small businesses thrive in Idaho due to its comparatively low state tax burden (6.95% flat corporate income tax rate), an ever-growing economy, plenty of readily available office and other commercial space, affordable housing, supportive local communities, a good education system (39.4% college-educated), highly-skilled workforce, quick access to large consumer markets, and one of the most highly regarded business environments in the United States.
The state fee for registering a business in Idaho is a reasonable $100 for an LLC and $100 for a corporation. The annual filing fee to maintain your company in Idaho is $100 for a corporation and the same ($100 per year) for an LLC.
The Gem State is committed to your success and has many resources at your disposal that you can take advantage of.
Resources for Small Businesses in Idaho
Whether you are registering as an LLC, Corporation, or simply as a Sole Proprietor in Idaho you are going to need to tap into the resources available to you to drive your small business forward.
Idaho has a multitude of small business development centers that are dedicated to supporting the development and retention of small businesses. The support they provide to entrepreneurs covers everything from crafting business plans to navigating the state’s tax codes. Visit the Idaho Small Business Development Center website to find out more.
Here are some additional small business resources in Idaho:
- SCORE Idaho: Not only are there small business development centers tailored around working with small businesses and startups for growth and development, but SCORE’s volunteer business professionals and expert mentors are readily available and are free to use for those looking to begin their entrepreneurial journey.
- Idaho SBA: The U.S. Small Business Administration (SBA) helps small business owners and entrepreneurs pursue the American dream. The SBA is dedicated to small businesses and provides counseling, capital, and contracting expertise as the nation’s only go-to resource and voice for small businesses.
These services are very useful and cost-efficient, and it makes perfect sense to arm yourself with all the help and information you can get.