In Idaho, you may incorporate a S corporation (S corp) by founding a limited liability company (LLC) or a corporation and then choosing S corp status with the IRS when you file for your EIN.
An S corporation is a tax categorization, not a company structure, according to the IRS. The S corp classification is used to lower a company’s tax burden.
In our How to Start a S Corp in Idaho tutorial, we’ll walk you through the steps.
You must examine the following things before founding a S corporation:
S corporations are restricted to one class of stock and 100 stockholders, among other things. For more information, see our What Is a S Corporation? guide.
As entrepreneurs, we feel that incorporating a S corporation via an LLC is the best option since the benefits of founding a corporation are offset by S corp limitations. LLCs are also less difficult to manage than corporations.
You must determine if the S corp tax status is preferable to the default LLC tax status for your company. Read our LLC vs. S corp tutorial to fully grasp the tax benefits of a S corp.
There are two major methods to form a S corporation:
We do not advocate forming a company with the S corp tax status since it undermines all of the advantages of forming a corporation.
Forming an LLC and Choosing S Corp Status in Idaho
It is simple to form an Idaho LLC and choose S corporation tax status. You may utilize our guidelines to set up an LLC with S corp status on your own, or you can engage a service provider like ZenBusiness to do it for you.
Step 1: Give Your LLC a Name
Step 2: Select a Registered Agent.
Step 3: Submit the Organizational Certificate.
Create an Operating Agreement in Step 4
Step 5: Obtain an EIN and submit Form 2553 to elect S Corporation tax status.
The first and most significant step in forming an LLC in Idaho is deciding on a name.
Make certain that the name you chose conforms with Idaho naming rules and is readily searched by prospective customers.
1. Follow the Idaho LLC naming guidelines:
Your name must include one of the words or acronyms listed below: limited liability company, limited company, L.L.C., LLC, L.C., or LC. “Limited” may be shortened to “Ltd.,” while “business” can be shortened to “Co.”
If the LLC is a professional company (such as a law firm), the name may contain the words “professional” before “limited” or the letter “P” at the start of any of the authorized abbreviations.
Your name cannot include wording that falsely states or implies government connection.
Restricted terms (such as “bank”) may need to be approved before they may be used in company names.
Your name must be distinct from any other businesses already registered with the Idaho Secretary of State.
2. Does the name exist in Idaho? You may check the Idaho Secretary of State website’s company search to discover whether your selected LLC name is available.
3. Is the URL accessible?
We suggest that you check to see whether your company’s name is accessible as a web domain. Even if you don’t intend to construct a company website right away, you may want to purchase the URL to prevent others from gaining it.
Your Idaho LLC must have a registered agent.
A registered agent for your LLC will accept legal papers and tax notifications on your behalf. When you submit your LLC’s Certificate of Organization, you will name your registered agent.
Many company owners opt to use the services of a registered agent. Many of these firms will incorporate your LLC for a modest price and provide free registered agent services for the first year.
The Idaho Certificate of Organization is needed to properly establish a limited liability company (LLC).
An LLC operating agreement is a legal document that defines your LLC’s ownership and member responsibilities.
An EIN is a number assigned by the US Internal Revenue Service (IRS) to companies in order to identify and tax them. It is basically a business’s Social Security number.
When you apply directly with the IRS, EINs are free.
For full assistance with completing the form, please see our Form 2553 Instructions page.
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