By Lane V. Erickson, Idaho Business Lawyer
The purpose of this article is to explain the basic steps that need to be completed in order to create a limited liability company or LLC in Idaho. Starting a new business is always an exciting Adventure. Our goal as the premier Idaho business attorneys is to assist each client with the formal steps and requirements necessary to help them move their small business forward. The fact that you are reading this article means that you have already either decided or are considering taking the step of creating an Idaho LLC as part of your small business structure. There are numerous reasons why this is a good idea. While the purpose of this article is not to explain the reasons why having an LLC is part of your business structure will be helpful to you, I will simply say good job on getting this far.
When it comes to small businesses, the business entity that is the most useful is the LLC. At the Racine law office our team of Idaho business attorneys have helped clients structure and create business entities for over 70 years. Our team includes partners Lane Erickson and TJ Budge, and attorneys Nate Palmer and Dave Bagley. Our attorneys have decades of experience, knowledge, and skill in helping business clients deal with all of their business needs including creating an LLC to help move our client’s businesses forward.
Starting and operating a small business is a daunting task. It seems like there is a never-ending list of things that need to be done. One of those things is deciding how you want to structure your business. To help you get started here are some basic tips that will help you as you move forward towards creating an LLC for your business.
1. Get Professional HelpThe first and best tips that we can give to any client is that they need to get professional help. This doesn’t mean that they need to go see a shrink. Rather, they simply need to build a team of experts and professionals who could give them advice and counsel about how to structure their business. This is especially true when it comes to creating an LLC.
The professionals that you should talk to include a qualified business law attorney and an experienced accountant. You may also want to have a financial advisor as well as mentors or coaches with actual experience in creating an operating small businesses. These professionals can help you avoid many of the pitfalls and mistakes that most small business owners make simply because they don’t know any better. This is especially true when it comes to using an LLC to structure your business.
2. Choose a NameThe next thing that you should do is you should consider what you want to name your business. In order to do this, it’s important that you choose a name that isn’t already being used by a business in Idaho. Again, this is one of the ways that professionals can help you. By using a qualified attorney, you have the ability to search registrations of all businesses in Idaho that have already been created. This gives you the ability to see whether the name that you would like to use for your business is available. If it isn’t, you may be able to find some small derivative of the name that you can use.
The reason the name is important is because it’s part of the brand of your business. You don’t want people to confuse your business with somebody else’s business or vice versa. Sometimes the name of the business you choose describes what it is the business does. This is not a requirement though. Even if you do choose a regular business name for your LLC you also have the chance to use an assumed business name as well.
3. File all Required DocumentsThe third step in creating your LLC is to complete and file all the required documents. For purposes of an LLC one of the main documents this includes is a certificate of organization. This document is filed with the Idaho Secretary of State’s office and is the document used to complete the registration of your business. This document contains the name of your business, the address of your business, the name of the owners of the business, and the name of the registered agent who can receive legal notices on behalf of your business.
Depending on the type of business you have you may also be required to file for and receive a local business license or retail license. You may also need to file a number of documents with the state of Idaho having to do with taxes, and insurance if you are going to have employees as part of your business. This is one of the reasons that step one above is so important. By using qualified professionals to help you get your business started, you will know that you have completed all of the documents and filed all of the filings that will need to be done based on your specific business.
4. Obtain a Tax ID NumberThe fourth step is obtaining your tax ID number from the IRS. This is actually called an EIN which stands for employer identification number. Even if you aren’t going to have any employees you are still required to get this number from the IRS. This number acts as the social security number for your business and is used to open all bank accounts and to do all tax filings for your business.
Once again, for a person who has never done this before, obtaining a tax ID number or EIN can be intimidating. Having help from qualified professionals makes this process simple. In fact we often help obtain an EIN for our clients and the process usually only takes about 10 minutes to complete.
5. Create and Sign an Operating AgreementThe final step is creating your operating agreement. But creating it alone is not enough. It also needs to be signed by all the owners of the business. The purpose of the operating agreement is that it is a contract between all of the owners that explains and controls a number of different things. For example, it describes the percentage of ownership each owner has in the business. Additionally, it describes how the business will be managed. Furthermore, it controls what happens to an owner’s ownership interest in the business in the event of a death, disability, divorce, or bankruptcy of one of the owners or if one of the owners simply decides they want to sell their interest and get out of the business.
By using a qualified professional who can take the time to learn more about how your business will operate, the operating agreement can be designed specifically for your type of business. Much like estate planning, when it comes to an LLC and its operating agreement, you don’t want just an off-the-shelf cookie cutter approach. Rather, you want to make sure that the document is specifically designed for the business you will be operating so that it can consider the issues that need to be included in the agreement between all the owners.
Our team of premier business lawyers at the Racine law office have assisted numerous clients in completing these goals and setting up their LLC. We are confident that we can help you too!
Enlist an Idaho Business Attorney to Help YouOur team of Idaho lawyers can help you with any of your business structure or operation needs. Whether you are seeking to create a new business or review a current business, we are available to discuss your options and answer your questions at an initial consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a consultation. You can also email us directly at lane@racineolson.com or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho business problems.