Key Takeaways
- Idaho law does not mandate an LLC to have an operating agreement. However, it is highly recommended to draft one to define internal operations, ownership structure, and member responsibilities, minimizing potential conflicts.
- Utilize our free Idaho LLC Operating Agreement template to ensure compliance with state regulations.
- To form an LLC in Idaho, you’ll need to file Articles of Organization with the Idaho Secretary of State, designate a registered agent, and fulfill the required filing fee.
Idaho LLC Operating Agreement Templates by Type
Single Member LLC
Basic Single Member LLC Operating Agreement
Used 4,920 times
Are you required to uphold your limited liability corporation status in accordance with state law? If the business is sued, the owner’s assets may be safeguarded by this agreement.
Use this operating agreement template in Idaho when there is only one owner of the LLC.
Multi Member LLC
Multi-Member LLC Operating Agreement Template
Used 4,872 times
Ensure that your newly formed LLC is run the right way by having a multi-member operating agreement in place.
Utilize this operating agreement template in Idaho when multiple individuals or entities co-own the LLC.
50/50 LLC
50/50 LLC Operating Agreement Template
Used 4,872 times
This free 50/50 LLC Operating Agreement template for businesses with equal ownership.
Employ this operating agreement template in Idaho when two equal partners equally share ownership and management responsibilities within the LLC.
Member-managed LLC
Member-Managed LLC Operating Agreement Template
Used 4,919 times
A manager is chosen by the firm owners to oversee day-to-day operations in a manager-managed LLC. Use this Member-Managed LLC Operating Agreement Template right away.
Opt for this operating agreement template in Idaho when the LLC’s management responsibilities are delegated to appointed members.
Legal Requirements
An Operating Agreement is vital for a Limited Liability Company as it cannot function autonomously and requires human intervention. Despite not being a statutory requirement (as per Idaho Statute § 30-25-102), it plays a pivotal role in various business aspects, from financial transactions to legal disputes. Here are some reasons why:
- Proof of Ownership: The LLC Certificate of Organization requires only one member’s name, which aids in maintaining privacy but complicates proof of ownership.
- Reinforcing Limited Liability Status: To reap the benefits of limited liability, a clear demarcation between personal and business finances is necessary.
- Preventing Misunderstandings: The Operating Agreement lays down the company’s rules, which are legally binding to all members.
- Customizing Internal Operations: Without an Operating Agreement, an LLC is governed by Idaho’s default laws, which may not align with your business model.
How to Form LLC in Idaho
Establishing a Limited Liability Company in Idaho involves several key steps:
- Select a Business Name: Choose a distinctive and appropriate name for your business that adheres to Idaho’s business naming regulations. You can check the availability of your desired name at Idaho Secretary of State.
- Submit Idaho Articles of Organization: File the Articles of Organization with the Idaho Secretary of State. This document includes crucial information about your business, such as its name, purpose, and registered agent’s name and address.
- Designate a Registered Agent: Appoint a registered agent who will receive legal documents on behalf of your LLC. The agent can be an individual resident of Idaho or a business entity authorized to do business in Idaho.
- Create an Operating Agreement: While not mandated by Idaho law, an operating agreement is strongly recommended. It outlines your LLC’s ownership structure and operating procedures.
- Acquire an Employer Identification Number (EIN): Apply for an EIN from the Internal Revenue Service (IRS). This is necessary for tax filing and reporting purposes. You can apply for it on the IRS website.
- Establish a Business Bank Account: Open a separate bank account for your LLC to keep your business finances separate from your finances. This is crucial for maintaining your LLC’s limited liability status.
- Register for State Taxes: If your LLC has employees, sells goods to customers in Idaho, or is required to pay sales tax, you must register for certain state taxes. You can register for state taxes with the Idaho State Tax Commission.
- Secure Business Licenses and Permits: Depending on the nature of your business, you may need to obtain specific business licenses and permits at the state, county, and/or city level.
- Submit an Annual Report: Idaho LLCs are required to file an Annual Report online with the Idaho Secretary of State. This keeps your business in good standing with the state.
Idaho LLC Laws
The legal framework in Idaho is primarily governed by the Idaho Uniform Limited Liability Company Act (IULLCA), which provides comprehensive guidelines for forming, operating, and dissolving LLCs within the state.
- Pass-Through Taxation: LLCs are typically classified as “pass-through” entities for tax purposes. This means that the LLC’s profits and losses are passed through to its members, who report this information on their individual tax returns.
- Federal and State Income Taxes: The Internal Revenue Service (IRS) taxes Idaho LLCs based on the number of members. Single-member LLCs are taxed as sole proprietorships, while multi-member LLCs are taxed as partnerships. The Idaho State Tax Commission follows the same taxation method.
- Elective Status: LLCs can request an “elective status” by filing an extra form with the IRS. Once granted, the IRS will treat the LLC as a Corporation (either an S-Corporation or C-Corporation) for tax purposes.
- Nonresident Members: If any LLC members are nonresidents of Idaho and make at least $1,000 in income every year, the LLC must either have the nonresident owner file Form PTE-NROA, file a composite return where the LLC pays income tax on behalf of the nonresident owners at the corporate tax rate, or withhold Idaho income tax for the nonresident owners at the highest individual tax rate.
- Affected Business Entity (ABE) Election: Idaho LLCs, S corporations, and other pass-through entities can pay income tax at the corporate rate. The LLC pays corporate tax, and each owner is credited against their state income tax using the amount paid by the LLC.
