Idaho S Corporation Formation Attorneys & Lawyers

Why use UpCounsel to form an S Corporation in Idaho

Starting an S Corporation in Idaho with a business startup attorney on UpCounsel is easy, informative, and cost-effective. In just three simple steps, our S Corporation attorneys will help you protect your business and personal assets, and help you organize your business for state and federal compliance for an S Corporation.

When forming an S Corporation in Idaho with UpCounsel, the attorney you choose to help you will conduct a business name search for your Idaho S Corporation and assist you in preparing your S Corporation Operating Agreement, along with providing other legal services based on your needs. Once your Articles of Incorporation have been prepared and successfully filed with the Idaho Secretary of State, your Idaho S Corporation has been formed and begins its existence as a corporate entity.

However, a corporation does not register as an S Corporation with the Secretary of State. It registers as a corporation with the state and then may file for S Corporation status with the IRS. S Corporation status is a taxation category which provides income tax advantages to small businesses.

Choosing a Company Name for Your S Corporation

One of the first steps in the process of forming your S Corporation is to choose your business name.

The business name that you choose must contain the words "Incorporated" or "Inc." It must be distinguishable (not the same as or deceptively similar to) the name of an S Corp or foreign S Corporation reserved or registered.

Your S Corporation name may contain the name of one or more members.

By using UpCounsel, you can choose several business names in order of preference. Your attorney of choice can then conduct a name check for your Idaho S Corp before filing to see which names are available. Once you have chosen an available name, your chosen S Corporation attorney can help you properly register your name with the State of Idaho.

Requirements for Forming a Idaho S Corporation

Articles of Incorporation: When forming an S Corporation in Idaho, the Articles of Incorporation must be filed following NRS Chapter 86 with the Idaho Department of State Division of Corporations. Idaho state law requires that certain information be included in your Articles of Incorporation when forming your Idaho S Corporation.

This information must include:

1. The S-Corp's name and address.
2. The S-Corp's purpose.
3. The S Corporation must appoint a statutory agent designated to for its' service of process. The Original Appointment of Statutory Agent (incorporated into the Articles form) must provide the agent's name and address as well as the agent's signature accepting the appointment.
4. The number of shares the S Corporation is allowed to issue.
5. The incorporator's name, address, and signature.

Additionally, a Idaho S Corporation formation generally requires inclusion and/or consideration of the following:

S Corporation Qualification Requirements: For a corporation to qualify as a S Corporation for tax purposes, it must meet the following requirements:

1. Must be a domestic corporation.
2. Have only allowable shareholders including individual, certain trusts, and estates; and may not include partnerships, corporations or non-resident shareholders.
3. Have only one class of stock
4. Have no more than 100 shareholders
5. Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations).

Additionally, a Idaho S Corporation formation generally requires inclusion and/or consideration of the following:

S Corporation Operating Agreement: Although the S Corporation Operating Agreement is not required with the Articles of Incorporation, it is a good idea for every S Corporation with more than one member to have one. The Articles of Incorporation may contain restrictions or prohibitions on the power of the members to adopt, amend, or repeal an operating agreement. Idaho recognizes operating agreements as governing documents.

Membership: A S Corporation must have one or more members.

Eligibility Requirements: A natural person or an entity.

Procedure for Membership: The member may acquire an interest in the S Corporation directly from the S Corporation at the time of formation and, after formation, at the time provided in and upon compliance with the Articles of Incorporation or the operating agreement or, if not provided, only upon the vote of a majority in interest of the S Corporation members, excluding the vote of the person acquiring the membership interest, and only when the person becomes a party to the S-Corp's operating agreement.

Resident Agent needed for a Idaho S Corporation

Remember every Idaho S Corporation must have a registered agent in Idaho, which is the person or office designated to receive official state correspondence and notice if the company is "served" with a lawsuit. The statutory agent may be a Idaho resident or business entity authorized to do business in the state. However, the registered agent must have a physical Idaho street address.

Idaho Secretary of State

Once you create an S Corporation in Idaho, the Idaho Secretary of State will require that certain recurring responsibilities and duties be fulfilled. The most important of these are explained below.

For further information, contact the Idaho Secretary of State.

Recurring Responsibilities and Duties for Idaho S Corporations

Annual Report: Each S Corporation shall provide an annual report to the Idaho Secretary of State regarding its financial condition to each of its officers, directors, and registered agent. The first annual report is due by the last day of the first month after S-Corp's Article of Incorporation was filed. The initial filing fee is $125.

Records: Each Idaho S-corp must keep the following records open to inspection at its office:

1. The Articles of Incorporation and any amendments
2. The S-Corp's Bylaws
3. A stock ledger or a statement of where it is kept.
4. A signed "Incorporator's Statement" showing the names and addresses of the initial directors who will serve on the board until the first annual meeting of shareholders.

Business Licenses: Business licenses and/or permits are required for most businesses. Contact the Idaho Secretary of State for specific licenses.

Annual List of Officers: All corporations doing business in Idaho must file a List of Officers, Directors, and Registered Agent and State Business License Application every year with the Idaho Secretary of State. Forms will be mailed to the corporation's registered agent each year. The filing fee is $125.

Filing Fees for a Idaho S Corporation

The processing fee for the Articles of Incorporation is $100 but can expediate for more. Also, the filing and reservation of the S-Corp's name is $20. These fees can change so it would be best to check with the Idaho Secretary of State on what the latest fees are. You may pay these fees in many different forms including cash, check, money orders, or debit and credit cards

Taxes for a Idaho S Corporation

A Idaho S Corporation is a special type of corporation created through an IRS tax election. An eligible corporation can avoid double taxation (once to the corporation and again to the shareholders) by a corporation with a Subchapter S designation by the IRS. A corporation must file a Form 2553 to elect "S" status within two months and 15 days after the beginning of the tax year.

Owners of the S Corporation report business losses or profits on their personal tax returns, and therefore the business itself is not taxed. Each shareholder is responsible for paying taxes on their pro rata share of the S corporation's items of income, deductions, and credits (through a Schedule K-1 form).

Idaho state law follows federal law for income tax purposes. Therefore if a corporation is classified as an association taxable as a S Corporation for federal income tax purposes, so will it be taxable as a corporation for state tax purposes.

Federal Income Tax: An S Corporation does not pay federal income tax.

Federal Tax Identification Number: Your corporation will need to obtain a federal tax identification number, which is also known as an Employment Identification Number (EIN). You do not need to get a new EIN after the corporation choose to become a S Corporation. An EIN is similar to an individual's social security number. You will need an EIN for your S Corporation as long as there is one member, even if the S Corporation does not have employees. For certain tax filing requirements the attorney you choose on UpCounsel can help prepare your Federal Tax ID Application, if you have not done so already.