How to start an Idaho corporation

It might seem like a lot at first, but once you understand the steps, it’s very doable. This guide will walk you through everything you need to know to start your Idaho corporation.

How to start a corporation in Idaho

Incorporating means registering your business as a corporation so the law sees it as its own entity, separate from you. Each state has its own rules for how to do this, so the process can seem confusing. Let’s go through each step: 

1. Choose a name for your Idaho corporation

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following Idaho requirements:

• Your name should end with "Company," "Corporation," "Corp.," "Incorporated," "Limited," or an abbreviation of one of these terms.
• Your corporation's name cannot be deceptive. If you're selling dry goods, don't name your company "Sal's Idaho Spuds."
• Ensure that your name is distinguishable from all other existing business names.

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

2. Decide between an Idaho S-Corp and C-Corp tax designation

There are similarities between an Idaho S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences, however, come down to the following:

• Ownership Rules: A C-Corp is responsible for its own debts, and it pays its own taxes. You can have an unlimited number of shareholders. Revenues can be doubly taxed when the owners pay taxes on corporate profits they receive as dividends. However, they're not taxed on the corporation's undistributed profits. An S-Corp is taxed like a partnership with a "pass-through" structure. It can pass its profits and losses to its shareholders. Shareholders pay taxes on their share of the profits at their individual tax rates. To form an S-Corp in Idaho, your business must be a domestic corporation, provide only one class of stock, and have less than 100 shareholders. Your shareholders are also limited to individuals, certain trusts, or estates.
• Documents: If you decide to form an S-Corp, you must file IRS Form 2553 to elect this status.

3. Appoint directors and shareholders for your Idaho corporation

Each state has its own personnel requirements for incorporating. In Idaho, your corporation must have at least one director. Otherwise, there is no requirement that directors live in the state and there is no age requirement.

State the number of your corporation's directors in either your Bylaws or your business's Articles of Incorporation. 

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have an Idaho address) or choose one to do that service for you (if you are not located in Idaho or would like an extra layer of privacy).

5. File your Articles of Incorporation with the state of Idaho

Once you have a business name and registered agent, you can register your business as an Idaho corporation with the state by filing your Articles of Incorporation. This document may be referred to in other states as "Certificate of Organization," "Certificate of Filing," or "Articles of Organization."

Idaho requires that you file additional paperwork with your Articles of Incorporation, including an Annual Report. The report must be submitted to the Idaho Department of State before the end of the anniversary month of your incorporation. Failure to do so can jeopardize your corporate status.

6. Get an Employer Identification Number (EIN)

Before opening your doors for business, apply to the IRS for an employer identification number, or EIN. All corporations with employees in Idaho must have an EIN. An EIN is similar to your Social Security number, but it's for businesses. You'll also need an EIN to open your corporate bank account.

Congratulations! After you have completed all these steps, you have formed your Idaho corporation.

What to do after incorporating in Idaho

Idaho requires that corporations create corporate records to maintain their corporate status, such as bylaws and corporate minutes. Bylaws ensure your corporate compliance and set forth your company's operating rules and structure. Although you don't have to file your bylaws with the state, you'll need them to demonstrate to banks, lending institutions, creditors, the IRS, and the courts that your corporation is valid and legitimate. Bylaws also help to establish rules so you can keep your corporate assets and debts separate from your personal ones.

Keeping Corporate Minutes of your director and shareholder meetings is also mandated by the state of Idaho. Your corporate minutes should be maintained at your corporate office with other business records. The minutes keep track of all votes on your important business decisions and help you to secure your corporate status.

We have more detailed information regarding Idaho's requirements for Bylaws and Corporate Meeting Minutes.

Still have questions? Learn more about how to start your own business with Rocket Lawyer and get started today!
 

Key takeaways Starting a corporation in Idaho means following state rules, like choosing a unique name, filling out paperwork, and paying fees to make it official. One important choice is deciding how your corporation will be taxed in Idaho, either as an S-Corp or a C-Corp. This affects how the business and owners pay taxes, and the differences between the two change from state to state. After forming the corporation, it’s recommended to keep records – like Bylaws and Meeting Notes – to stay in good standing with the state and prove your business is real and operating correctly.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a corporation?
• What is an S-corporation?
• How are corporations taxed?
• How to start a corporation
• How to register a corporation by state