How to Start a Idaho Corporation (original) (raw)

Start a Idaho Corporation

When you plan to start a business in Idaho, you must decide on the appropriate structure. Starting a corporation may be more complicated than creating an LLC in Idaho or a sole proprietorship. However, it is not that difficult as well. There are a few guidelines that you should be aware of when it comes to creating Idaho corporation. Starting a corporation involves a legal process, that is, the process of incorporation.

In this article, I will share a step-by-step guide to start a corporation in Idaho. I will also enlighten you on the advantages and disadvantages of having a corporation. Some people consider starting a corporation in Idaho more than other business structures since it has many advantages over other forms.

What is a Corporation in Idaho

In definition, a corporation is a formal organization established by stockholders, shareholders, or other people to make a profit. Like individuals, corporations can undertake contracts, own assets, sue and be sued, pay taxes, limit state and federal taxes, and loan funds from banking institutions.

Common Types of Corporations

Before you start with the process of forming a corporation, you should know what type of corporation you will form. There are several different forms of corporations you can take into consideration, depending on your corporation’s objectives and ownership structure.

C-Corporation: C-Corporation is the most known type of incorporation. They have almost all corporate distinguishing characteristics. Profits are distributed to corporate owners who are taxed at an individual level. The corporation is taxed similarly to a business unit.
S-Corporation: An S-Corporation is set up similarly to a C-corporation but has different tax implications and owner limits. S-corps have no more than 100 stockholders and are not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.
Non-profit Corporation: Nonprofit businesses are frequently used by religious, educational, and charity institutions to run their operations without making a profit. Thus, a nonprofit corporation is exempt from paying taxes. The nonprofit organization’s gifts, contributions, or cash are reinvested in the company to fund its growth, future endeavors, or operations. Read how to start a nonprofit corp in Idaho to learn about nonprofit corporations.

If you have a small business, it is recommended that you form an LLC instead of a corporation in Idaho. LLCs have more tax benefits than other structures. Besides, LLCs protect your personal assets. However, it is wise to consult a legal expert before you start setting up your business in Idaho.

– LLCBuddy Editorial Team

How to Start a Corporation in Idaho

To start a corporation in Idaho, you must follow the below steps that, include forming a corporation name, appointing a board of directors, filing for Articles of Incorporation, drafting corporate bylaws, meeting with the board of directors, issuing stocks, creating a shareholders agreement, requesting for an EIN, and getting a license and permit. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Choose a Corporation Name in Idaho

Naming your business is one of the most crucial activities during the startup phase. Your corporation name serves as the foundation for your brand. Legal procedures should be taken into account when choosing your corporation name. Choose a corporation name that will enable you to develop a strong brand identity without being hampered by irrelevant factors.

If you are forming an LLC, there is a complete guide on Idaho LLC name guidelines for a proper LLC name. Here are some guidelines you must follow while naming your corporation in Idaho-

Your business name must contain entity identifiers, such as “Incorporated,” “Limited,” “Corporation,” or “Company,” or an abbreviation, such as “Inc.,” “Co.,” or “Ltd.”
Exclude any words in your business name, such as “Trust,” “Bank,” “Credit Union,” or “Trustee,” or words related to a government agency, such as “FBI,” “State Department,” or “Treasury.”

Step 2: Board of Directors Initial Appointment

To form a corporation in Idaho, you must appoint an initial board of directors before making them permanent once the corporation is formed. In Idaho, you may appoint at least Three board of directors. The initial board of directors is in charge of guiding the overall strategy of your business. The structure, responsibilities, and powers given to a board of directors are determined by the bylaws of a company or organization. So, appointing your corporation’s initial board of directors in Idaho is a big step in forming a corporation.

Step 3: Filing the Articles of Incorporation in Idaho

After you appoint the initial board of directors in your Idaho corporation, the next step is to write and file a Articles of Incorporation. In writing, the Idaho Articles of Incorporation, the corporation name, principal place of business, the purpose of business, Idaho Registered Agent contact information, and the names and addresses of incorporators and/or initial board members, should be written.

Filing a Articles of Incorporation in Idaho may be done with three ways, online, by mail and in-person. The Articles of Incorporation fee may vary from different states. However, in Idaho, it costs $120 for filing in-person and by mail.

Online Filing: Create an account/Log in to the SOS site, get the online form, fill it, and submit online
Offline filing: Send the form by mail or drop it off in person to Office of the Office of the Secretary of State, 450 N 4th Street, P.O. Box 83720, Boise, ID 83720-0080

Step 4: Draft Corporate Bylaws

Now you are done filing a Articles of Incorporation in Idaho, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

In creating corporate bylaws, you should include the following on how the decisions will be made-

The responsibilities are given to each officer.
How will judgments in business be made?
Where and when are the annual shareholder meetings?
The minimum number of shareholders required for decision-making.
Location and timing of dividend payments.

Step 5: Hold the First Board of Directors’ Meeting

After drafting the corporate bylaws, gather all the board of directors for the first meeting. This meeting will be finalized by appointing directors to manage the company’s daily operations, approve the bylaws, choose the corporation’s accounting year, and approve the stock issue. All board meetings should have minutes taken and stored with the company’s records.

Step 6: Issuing Stock in a Corporation

After starting your Idaho corporation, one of the first official corporate actions is issuing stock to the shareholders. Keep track of the number of shares issued to each shareholder and the purchase price. A corporation in Idaho is managed by its shareholders, who contribute to the business in exchange for ownership shares.

Step 7: Draft and Finalize a Shareholders Agreement

Even though drafting and finalizing a shareholders agreement is unnecessary, I suggest you still comply since it will benefit your corporation and its shareholders. A small business’s shareholders enter into a shareholder agreement contract. It establishes how ownership will be handled in unexpected situations, like a shareholder passes away, retires, becomes disabled, or quits the corporation. Early on in the life of your Idaho corporation, signing a shareholders’ agreement can help maintain corporate continuity and prevent future disputes.

Step 8: Request an EIN in Idaho

After everything is in place, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your Idaho corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Idaho can be through the following:

Apply Online- The EIN online application is the preferred method for customers to apply for and obtain an EIN.
Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
Apply by Mail- The EIN application For m SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in a number of ways. It will give your corporation the final advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 9: Get Licenses and Permits for your Corporation in Idaho

Before your corporation operates in Idaho, you must have a business license. A business license is a document issued by a government agency that permits you to operate your business in the geographic region that that agency governs. To legally operate your corporation, you’ll need a business license. Numerous corporate licenses need to be filed and renewed regularly. Check out how to get business licenses and permits in Idaho to know more.

You must also register a DBA name if you intend to conduct business using a name other than your corporation’s legal name. The DBA name is sometimes known as “doing business as” or a “fictitious business name.” Depending on your location, you may need to register the DBA with your state, city, and county. You can skip this step if your business solely uses your legal company name.

Important Information

Paying your Taxes in Idaho

Even if you have established your corporation in Idaho, pay your taxes and keep everything up to date so you won’t pay any penalty. Unlike an LLC, there is a corporate tax that every corporation in Idaho has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in Idaho are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in Idaho

A filing and annual fee must be paid to form a corporation in Idaho. Without it, your corporation won’t operate. The initial filing fee for a corporation may vary depending on the state. However, in Idaho, it costs 120forfilingin−personandbymail.ThecorporationinIdahoalsohastofileanannualreport(thoughitmightnotbemandatory,itisrecommendedtofileone).Ensureyoucomplywithallthenecessaryfeesandcostssoyourcorporationwillrunsuccessfullyandsmoothly.If,inthefuture,youmakeanychangestoyourcorporation,youmustfiletheIdahoAmendment.Itcosts120 for filing in-person and by mail. The corporation in Idaho also has to file an annual report (though it might not be mandatory, it is recommended to file one). Ensure you comply with all the necessary fees and costs so your corporation will run successfully and smoothly. If, in the future, you make any changes to your corporation, you must file the Idaho Amendment. It costs 120forfilingin−personandbymail.ThecorporationinIdahoalsohastofileanannualreport(thoughitmightnotbemandatory,itisrecommendedtofileone).Ensureyoucomplywithallthenecessaryfeesandcostssoyourcorporationwillrunsuccessfullyandsmoothly.If,inthefuture,youmakeanychangestoyourcorporation,youmustfiletheIdahoAmendment.Itcosts50 to file an amendment in Idaho.

Advantages of Starting a Corporation in Idaho

Limited Liability: The biggest advantage of setting up a Idaho corporation is that the shareholders are not personally responsible for the debts of the company. As a result, when you incorporate as a corporation, personal assets like homes, vehicles, and other possessions are prohibited. One of the main benefits of setting up a corporation over a general partnership or sole proprietorship business structure is that neither the business nor the owners are held legally responsible for the obligations of the business, even if it means giving up their personal assets.
Limitless Corporation: The fact that a corporation’s existence is independent of its owners is another significant benefit of incorporation. In other words, a corporation has an endless life and will continue operating normally even if the owner dies or decides to sell their ownership.
Advantages in Tax: The deduction of health insurance premium payments made on behalf of an owner-employee is one of the many financial benefits to which corporations are entitled. Corporations also save on self-employment taxes since their revenue is not subject to workers’ compensation, Social Security, or medical taxes. Tax rates on corporate profits are lower than those on individual income.

FAQs

What are the steps to form a corporation in Idaho?

The steps to form a corporation in Idaho include choosing a corporate name, filing the Articles of Incorporation, obtaining a registered agent, drafting corporate bylaws, issuing stock and obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).

Is there a fee to start a corporation in Idaho?

Yes, there is a $100 fee to file the Articles of Incorporation with the Secretary of State.

What is the time frame for starting a corporation in Idaho?

The time frame for starting a corporation in Idaho can vary, but the filing of the Articles of Incorporation usually takes 1-2 business days.

What is the minimum number of directors needed to start a corporation in Idaho?

The minimum number of directors needed to start a corporation in Idaho is one.

What is the corporate income tax rate in Idaho?

The corporate income tax rate in Idaho is 7.4%.

Is there a minimum capital required to start a corporation in Idaho?

No, there is no minimum capital required to start a corporation in Idaho.

What is the process for registering a corporation in Idaho?

The process for registering a corporation in Idaho involves filing the Articles of Incorporation, obtaining a registered agent, drafting corporate bylaws, issuing stock and obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).

What are the requirements for naming a corporation in Idaho?

The requirements for naming a corporation in Idaho include using a distinct name that is not likely to mislead the public and does not contain any restricted words or phrases that require additional paperwork. The name must also end with an approved corporate designation, such as “Corporation” or “Inc.”.

How long does it take to get an Employer Identification Number (EIN) in Idaho?

It typically takes 1-2 business days to receive an Employer Identification Number (EIN) in Idaho.

What is the filing fee to register a corporation in Idaho?

The filing fee to register a corporation in Idaho is $100.

Does Idaho require corporations to hold annual meetings?

Yes, Idaho requires corporations to hold annual meetings.

Does Idaho require corporations to keep minutes of all meetings?

Yes, Idaho requires corporations to keep minutes of all meetings.

Are there any special requirements for foreign corporations in Idaho?

Yes, foreign corporations in Idaho must register with the Secretary of State and obtain a Certificate of Authority.

Are there any special tax requirements for corporations in Idaho?

Yes, corporations in Idaho must pay corporate income tax and franchise tax.

Does Idaho require corporations to file annual reports?

Yes, Idaho requires corporations to file annual reports.

Does Idaho require corporations to have a registered agent?

Yes, Idaho requires corporations to have a registered agent.

What is the process for dissolving a corporation in Idaho?

The process for dissolving a corporation in Idaho involves filing the Articles of Dissolution with the Secretary of State, notifying creditors and shareholders, settling debts, distributing assets and filing the final tax returns.

What is the fee to dissolve a corporation in Idaho?

The fee to dissolve a corporation in Idaho is $30.

Are there any other fees or taxes associated with starting a corporation in Idaho?

Yes, there may be other fees and taxes associated with starting a corporation in Idaho, such as franchise taxes, fees for obtaining a Certificate of Authority for foreign corporations and fees for issuing stock.

Does Idaho require corporations to keep records?

Yes, Idaho requires corporations to keep records of all corporate activity including minutes, stock certificates, filings, tax returns and financial statements.

Is there a way to reduce the corporate income tax rate in Idaho?

Yes, certain types of corporations such as S-Corporations may be eligible for reduced corporate income tax rates in Idaho.

Are there any other benefits to starting a corporation in Idaho?

Yes, there are other benefits to starting a corporation in Idaho, such as limited liability protection for shareholders, potential tax savings, increased access to capital and increased credibility for the business.

Are there any restrictions on selling stock in Idaho?

Yes, there are restrictions on selling stock in Idaho, such as requiring the issuance of a stock certificate, the payment of taxes and the filing of required documents with the Secretary of State.

Is it easy to transfer assets to a corporation in Idaho?

Yes, it is easy to transfer assets to a corporation in Idaho, provided that the assets are properly documented and transferred in accordance with applicable laws.

Does Idaho require corporations to issue stock certificates?

Yes, Idaho requires corporations to issue stock certificates when issuing stock.

Are there any reporting requirements for corporations in Idaho?

Yes, corporations in Idaho are required to file annual reports and submit any other necessary documents to the Secretary of State.

What happens if a corporation fails to comply with the requirements for doing business in Idaho?

If a corporation fails to comply with the requirements for doing business in Idaho, it may have its corporate charter revoked, be subject to fines and other penalties and be prevented from doing business in the state.

What is the process to start a corporation in Idaho?

The process to start a corporation in Idaho requires filing Articles of Incorporation with the Idaho Secretary of State. The Articles of Incorporation must include the name of the corporation, the purpose of the corporation, the name and address of the registered agent, the duration of the corporation, the name and address of the incorporator, and the number of shares authorized.

What are the filing fees to start a corporation in Idaho?

The filing fee to start a corporation in Idaho is $101.

What type of information is required to incorporate a business in Idaho?

To incorporate a business in Idaho, you will need to provide the name of the corporation, the purpose of the corporation, the name and address of the registered agent, the duration of the corporation, the name and address of the incorporator, and the number of shares authorized.

What are the annual reporting requirements for a corporation in Idaho?

Corporations in Idaho must file an annual report with the Idaho Secretary of State each year. The annual report must include the corporation’s name, the name and address of its registered agent, the address of its principal office, and a statement of the number of shares authorized.

Is it necessary to have a registered agent in Idaho?

Yes, a registered agent is required in Idaho in order to incorporate a business. The registered agent will accept legal documents on behalf of the corporation.

What is the minimum amount of capital required to form a corporation in Idaho?

There is no minimum amount of capital required to form a corporation in Idaho.

What are the tax obligations for corporations in Idaho?

Corporations in Idaho are subject to both state and federal taxes. State taxes include income, franchise, and sales and use taxes. Federal taxes include corporate income tax, payroll taxes, and self-employment tax.

Why Idaho Corporation is So Important

With its diverse economy and strategic location in the intermountain West, Idaho has seen a surge in corporate investment and development over the years. From manufacturing to technology, agriculture to tourism, corporations in Idaho span various industries, each contributing to the state’s overall economic vitality in their unique ways.

One of the primary reasons why corporations are so important in Idaho is their ability to create employment opportunities for the local population. Corporations, both large and small, employ thousands of individuals in the state, providing them with stable incomes and valuable benefits. This, in turn, helps to reduce unemployment rates, alleviate poverty, and improve the standard of living for many Idahoans.

Furthermore, corporations in Idaho play a critical role in fostering innovation and driving economic growth. Through research and development initiatives, corporations invest in new technologies, products, and services that not only improve their own competitiveness but also benefit society as a whole. By constantly pushing the boundaries of what is possible, corporations in Idaho contribute to the state’s reputation as a hub for innovation and entrepreneurship.

Additionally, corporations in Idaho contribute to the local economy through taxes and other forms of financial support. By paying corporate taxes, licensing fees, and other levies, corporations help to fund essential government services like education, healthcare, and infrastructure. This, in turn, benefits the entire community by creating a more conducive environment for business growth and development.

Moreover, corporations in Idaho often give back to the community through philanthropic initiatives and charitable contributions. Whether through donations to local nonprofits, sponsorship of community events, or volunteer programs, corporations in Idaho demonstrate their commitment to social responsibility and making a positive impact on the lives of those around them. This not only builds goodwill with customers and employees but also helps to strengthen the social fabric of the state.

In conclusion, the importance of corporations in Idaho cannot be overstated. From driving economic growth and innovation to creating job opportunities and supporting local communities, corporations play a crucial role in shaping the future of the state. By recognizing and valuing the contributions of corporations in Idaho, we can foster a business-friendly environment that encourages investment, development, and prosperity for all.

Conclusion

When determining which corporate form is best for you, be selective. You must know which business structure is bet-fitted for your product/service in Idaho. Consult a legal professional before you take the first step while setting up your business. Finding the ideal ratio of corporate advantages and legal protection that meets your unique needs is very important. In forming a corporation in Idaho, you need to ensure that every detail is well-formed so that your corporation will be successful. And if you have any questions, share them in the comment section below.