Idaho Startup
If you're forming a Idaho startup but you're not sure what type of business is best
for you, we can help. Our Idaho startup page has information on DBAs, LLCs, and
corporations of all type (for-profit or nonprofit; foreign corporations and domestic).
Idaho DBA
Known elsewhere as a trade name or fictitious name, an Idaho DBA is called an Assumed Business Name.
This type of business is the simplest type of business to form; the business is
a legal and financial extension of its owner (called the sole proprietor), and the
owner is personally liable for the debts and obligations of the business.
An Idaho DBA, unlike similar businesses in other states, is considered perpetual;
it exists until the owner dissolves the business, and does not expire.
Incorporate in Idaho
If a business expects to have a large amount of capital tied up in inventory or
take on significant risk, or if the owner simply does not want to risk exposure
to a lawsuit, that business might
incorporate in Idaho. Doing so provides limited liability protection to
the owner or owners.
If the corporation will raise capital by selling shares, it will choose one of two
types of tax classifications: C corporation or S corporation.
C Corporation
If the business will remain as a
C corporation, it will experience "double-taxation"—that is, the corporate
income is subject to both a corporate tax and an individual tax (once it has been
distributed to shareholders and officers).
S Corporation
An
S corporation, on the other hand, is a pass-through entity; it avoids double
taxation by having no corporate income tax. However, it has other ownership limitations
that a C corporation does not have.
Idaho Foreign Corporation
If a corporation that has already been registered in another state expands its business
into Idaho, it must register as a
foreign corporation first. To do so, it must submit a Certificate of Good
Standing from its original state of incorporation, along with the Application for
Certificate of Authority, to the Secretary of State.
Idaho LLC
An Idaho LLC is
another type of business that provides limited liability to its owners; depending
on the amount of owners (one or several), it has a few different tax classification
options. Rather than issuing shares of stock, LLCs involve ownership percentages.
Idaho Nonprofit Corporation
A 501c3
nonprofit corporation is a specific type of nonprofit that is formed for purposes
laid out in IRS Code 501c3: religious, literary, educational, scientific, and a
few others.
To file as a 501c3 tax-exempt organization, a business must first register as an
Idaho nonprofit corporation; then, once registered, the business must apply for
501c3 status from the IRS by sending in form 1023 along with its filed Articles,
mission statement, and other supporting documentation.