If you own a business that was created in a state other than Idaho, you will need to qualify or register that business in Idaho if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Idaho) limited liability company (LLC) to do business in Idaho.
Note: Both Idaho’s LLC Act and its foreign business laws are in a state of transition. Key parts of the LLC Act change effective July 1, 2017. With those changes, and unlike most other states, there is no law specifically for registering foreign LLCs. Instead, there is only be a set of laws that cover registration of foreign businesses generally. Idaho law refers to these businesses collectively as “foreign entities.”
For Idaho purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Idaho. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in New Hampshire is a foreign LLC in Vermont.
According to Idaho’s LLC Act, you are required to register your foreign company with the state of Idaho if you are “doing business” or “transacting business” in Idaho. (Idaho business laws currently use both terms.) What does this mean? Well, like most states, Idaho’s business laws do not specifically define either “transacting business” or “doing business” in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
Certain exceptions may apply and the rules can get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo’s articles on Internet Sales Tax: A 50-State Guide to State Laws.
Like most states, Idaho law specifies certain activities that do not constitute doing business in the state. The items listed include:
For the full, legal description of each of the listed items, check Section 30-21-505 of the Idaho Statutes. If your LLC’s only activity in Idaho is one or more of the listed items, you should not need to register with the state.
To register your business in Idaho, you must file a Foreign Registration Statement with the Idaho Secretary of State(SOS). You can download a blank registration statement form from the SOS website. Unlike many other states, Idaho has one form for all types of businesses (corporations, LLCs, and so on).
To complete the form, you must provide more or less the same information that you need to create an LLC in your home state. More specifically, for an Idaho application for registration, you need to provide:
You must include a certificate of existence or certificate of good standing with your application. The certificate should be issued by the secretary of state (or equivalent office) in the state where your LLC is organized. The certificate must be dated within 90 days of filing your registration statement. The basic filing fee is $100 if you type the statement and $120 if you complete it in handwriting.
If your LLC transacts business in Idaho without registration, it cannot bring a lawsuit in the state. In addition, the Idaho attorney general can initiate legal action to stop your LLC from doing further business in the state. However, not being registered does not invalidate your LLC’s contracts or prevent it from defending a lawsuit in Idaho. Also, the limitation on personal liability of an LLC member will not be waived solely because the company transacted business in Idaho without registration.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Idaho are similar. You will use the same form. See the Idaho Secretary of State website for full details, including information and filing instructions for registering a foreign corporation in Idaho.