How to Move an LLC to Idaho

There are many reasons why a business owner may want to move an LLC to Idaho. This article discusses the use of domestication, known in some states as LLC conversion, to transfer an LLC to Idaho.

What is Idaho LLC Domestication?

Idaho domestication is a procedure that an LLC uses to change its domicile state—the state where the company is legally organized. An LLC organized in a different state—called a foreign LLC or out-of-state LLC—can domesticate into Idaho if the other state also authorizes LLC domestications.¹ After completing the domestication process, the LLC is considered an Idaho LLC, and it is organized under and governed by the Idaho Uniform Limited Liability Company Act (Idaho LLC Act).²

Idaho law authorizes a similar procedure—called a conversion—that changes an LLC into a new type of entity. An Idaho LLC can convert into an Idaho corporation, for example.³ Or, an out-of-state entity that is not an LLC can convert into an Idaho LLC.⁴

Some states combine the process for changing an LLC’s domicile state (what Idaho calls domestication) and the process for changing an LLC into a different form of entity (what Idaho calls conversion) into a single procedure called conversion. Idaho uses two separate procedures. This article focuses on Idaho LLC domestications that turn out-of-state LLCs into Idaho LLCs.

Why Transfer an LLC to Idaho?

Changing a business’s domicile state may be a wise business strategy, or it may be a more convenient arrangement for the owner (or both). Any of the following reasons could support a business owner’s decision to move an out-of-state LLC to Idaho.

• Improved legal and regulatory climate. An Idaho LLC domestication may be a good business decision if Idaho’s legal and governmental climate has advantages over the current state. Business publications often rank Idaho in the top tier of states for business—noting the strong economy, solid infrastructure, and business-friendly regulatory environment. An LLC might also benefit from a move to Idaho if it wants to customize its operating agreement in a way the current state does not allow.⁵
• Reduced annual reporting. Domesticating into Idaho may save an LLC time and money on annual reporting. If the LLC will not continue doing business in the original state, it will no longer need to file an annual report there. Like most states, Idaho requires LLCs to file annual reports, but (unlike most states) Idaho charges no annual report fee. So, an LLC that domesticates to Idaho potentially reduces its annual report fees to $0.00 if it has no reporting requirements in other states.
• Owner convenience. Many business owners find it more convenient for the business’s legal home state to be the same as the owner’s state of residence. An owner in that situation needs to be concerned with only one state’s laws—which reduces legal issues and avoids confusion. An LLC owner who lives where the business is organized may also enjoy more convenient dealings with government agencies.
• Lower tax burden. Idaho is, in general, a low-tax state—highlighted by especially low property taxes. Idaho also offers tax incentives for growing businesses in Idaho. Moving to a state with lower taxes can result in substantial savings, and domestication can sometimes reduce a company’s tax bill by limiting the number of states that tax the business. A state’s power to tax a business requires a sufficient connection—called a taxable nexus—between the state and the business. An LLC that domesticates to Idaho may avoid being taxed by the original state if the transfer ends the taxable nexus.
• Easier professional hiring. Nearly all businesses must hire an accountant, attorney, or other professional at some point. Laws and regulations that professionals work with are often determined at the state level. A professional who completes a project for a business needs to know the correct state’s rules. An Idaho-resident owner should have ready access to local professionals familiar with Idaho law—making hiring easier and enabling convenient in-person meetings. An owner in Idaho may have a more challenging time finding nearby professionals with experience in a different state’s system.

What are the Benefits of Idaho LLC Domestication?

An Idaho LLC domestication is the most streamlined method to transfer an out-of-state company into Idaho. There are other ways—such as forming a new Idaho LLC and merging it with the existing out-of-state LLC. But the other options are more disruptive and typically require significant legal fees.

The Idaho domestication process’s advantages over alternative approaches include the following:

• The company continues operating as normal. Domestication is a behind-the-scenes procedure. The domesticating LLC can continue its day-to-day, revenue-generating activities during and after a domestication to Idaho. Employment relationships with the business’s employees also remain intact, so releasing and re-hiring employees is unnecessary.
• The LLC has the same legal identity and EIN. A domesticating LLC need not obtain a new Employer Identification Number (EIN). It can keep using the current EIN, and it continues its same administrative history. This is because an LLC that domesticates to Idaho is the same entity before and after domestication, and there is no break in its existence.⁶
• The company can keep its financial accounts. Domestication does not affect the LLC’s assets.⁷ There is no need to close bank accounts or open new ones. The LLC may start working with an Idaho bank at the members’ or managers’ discretion, but switching banks is optional.
• Existing contractual relationships are intact. A domesticating LLC’s contractual rights and obligations are not altered by a domestication. The company can continue its business relationships, and existing agreements are still valid and enforceable.⁸
• There is no need to wind up affairs or dissolve the LLC. The Idaho LLC domestication process does not involve winding up affairs or dissolving the out-of-state LLC in the current state.⁹ Winding up and dissolution are time-intensive, costly processes. Avoiding them by transferring the LLC directly from the current state to Idaho is a core advantage of domestication.
• The business need not register as a foreign LLC. An out-of-state LLC that domesticates to Idaho has no need to register as a foreign LLC. The company may register in the former state, but that is only necessary if it wants to keep doing business there. The company is an Idaho LLC after domestication, so there is no need to register as a foreign LLC in Idaho.¹⁰

What LLCs can Convert to Idaho LLCs?

An out-of-state LLC cannot domesticate to Idaho unless its current state’s law authorizes LLC domestications.¹¹ The current state need not call the procedure domestication (it may be called conversion). The decisive factor is whether the state has a legal procedure that officially transfers an LLC to another state.

An LLC considering a domestication into Idaho should also confirm that Idaho LLCs can engage in the kind of business the LLC does. Some states restrict LLCs from doing certain types of business—often insurance or banking. Idaho’s LLC Act allows LLCs to have “any lawful purpose.”¹² However, a domesticating LLC’s business must be lawful in Idaho. An out-of-state LLC should not move to Idaho if it is involved in a business that is unlawful in Idaho—even if it is lawful in the current state.

Domestication of PLLCs

Idaho differs from some states by allowing LLCs to provide professional services. A professional service is a service that a provider can offer only with a license or certification. Professional services in Idaho include (among others) the practice of architecture, dentistry, law, medicine, nursing, physical therapy, professional geology, and social work.¹³

An LLC that is formed for the sole and specific purpose of providing a professional service and related services is called a professional limited liability company or PLLC.¹⁴ Idaho PLLCs are governed by the Idaho LLC Act, by Idaho law applicable to professional entities, and by the rules of the profession that the PLLC practices.¹⁵

An out-of-state LLC that provides a professional service should use the Idaho domestication process only if the company and its members satisfy (or can satisfy) all Idaho requirements and rules for PLLCs. Some of the legal rules for Idaho PLLCs include:

• Certificate of organization must identify profession. An Idaho PLLC’s certificate of organization must identify the company as a PLLC and state the profession that the company’s members practice.¹⁶
• Licenses are required. An Idaho PLLC may provide a professional service in Idaho only through members, managers, employees, and agents who have the necessary Idaho license or certification.¹⁷
• Only professionals can be members. Only a person with the necessary license or certification (or another professional entity) can have an ownership interest in an Idaho PLLC.¹⁸ Existing members can sell or transfer their interests only to other licensed professionals.¹⁹

How Much Does Idaho LLC Domestication Cost?

The expense for an LLC domestication to Idaho includes service-provider costs, filing fees, and a commercial registered agent’s fee (if hired).

Service-Provider Costs

The domesticating LLC’s service-provider costs are the labor costs charged by the service provider that the LLC hires to manage or assist with the domestication process. The amount varies by provider and may depend on whether the provider accepts a flat fee or charges hourly.

Work that goes into a domestication typically includes:

• Gathering and organizing information needed to prepare domestication documents;
• Preparing domestication documents;
• Communicating with the LLC’s members or managers about approving and signing documents;
• Filing signed documents with the Idaho Secretary of State and the current state’s equivalent office; and
• Communicating with state offices.

Filing Fees

The Idaho Secretary of State’s office and the current state’s equivalent office will charge filing fees for the domestication documents. Filing fees in Idaho are $130.00—which is made up of $30.00 for the statement of domestication and $100.00 for the certificate of organization.²⁰ There is also a $20.00 manual processing fee for documents that are filed in paper form.

The current state will also charge a filing fee for that state’s version of the statement of domestication. Idaho’s fee for an Idaho LLC domesticating to another state is $30.00.

Registered Agent Fees

Idaho law requires every LLC to have a registered agent with legal authority to receive for the LLC service of process, notices from government agencies, and other important communications.²¹ An Idaho LLC can list a business address and the title of an office with the company—such as vice president or secretary—as the company’s registered agent.²² Service of process is made on the individual who occupies the office.

An Idaho LLC’s registered agent must have a physical address in Idaho.²³ If an LLC has no Idaho address, it can hire a commercial registered agent. Commercial registered agents—which are registered with the Idaho Secretary of State—charge an annual fee to serve as a business’s registered agent.²⁴

Commercial registered agents also formalize the process of receiving important communications and provide a consistent point of contact for an LLC. A commercial registered agent’s relatively small fee (typically around $150.00 per year) if often a worthwhile expense even if an LLC has an Idaho office.

How Long Does Idaho LLC Domestication Take?

The length of the Idaho LLC domestication process depends in large part on each party’s turnaround time. The total time needed to finish the process includes:

• The members’ or managers’ time to give the document preparer the necessary information;
• The document preparer’s time to prepare the domestication documents;
• The members’ or managers’ time to review and sign the domestication documents or request changes; and
• The processing time needed by the Idaho Secretary of State’s office and the current state’s equivalent office.

Documents filed online typically require less processing time than documents filed in paper form. The Idaho Secretary of State’s Office offers expedited processing for an extra fee for some filings.

What Laws Govern Idaho LLC Domestication?

A domesticating LLC needs to consider the laws of two states—the current state and the state where the LLC is domesticating. An LLC domesticating to Idaho must follow Idaho’s requirements for LLCs domesticating to Idaho (described in this article) and the current state’s requirements for LLCs transferring to a new state.

The current state’s law controls:

• Domestication availability. Whether domestication from the state is an option for the LLC;²⁵
• Plan of domestication content. What must be included within the LLC’s plan of domestication;
• Domestication approval. How the LLC’s members or managers must approve the domestication;²⁶
• Current state filings. What document(s) must be filed in the current state and the content of such documents; and
• Additional state requirements. Any additional domestication requirements listed in the state’s law.

Domestication laws are generally similar, but there can be significant differences in the details between states. It is important to be familiar with both states’ rules so that no requirements are omitted.

What is the Idaho LLC Domestication Process?

The Idaho LLC domestication process consists of two components: document preparation and administrative tasks.

Document Preparation

An LLC that domesticates to Idaho must prepare multiple domestication documents that describe the terms of the domestication. The document preparer needs to be sure that the documents meet all relevant requirements of both states.

• Plan of Domestication. A Plan of Domestication that is designed to comply with the requirements of both Idaho law and the law of the state that the LLC is moving from.
• Idaho Statement of Domestication. The Idaho Statement of Domestication with all information and any related documents needed for filing with the Idaho Secretary of State’s Business Services Office.
• Domestication Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, statement of conversion, certificate of conversion, or a similar term.²⁷
• Idaho Certificate of Organization. The Idaho Certificate of Organization for filing with the Idaho Secretary of State’s Business Services Office.
• Idaho Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as an Idaho LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Domestication. A resolution approving the transaction and adopting the Idaho organizational documents as the LLC’s governing documents.

Administrative Tasks

An out-of-state LLC makes the Idaho domestication effective and officially becomes an Idaho LLC by completing several administrative tasks.

• Conduct preliminary name search. Check the official records of the Idaho Secretary of State’s Business Services Office to determine whether the LLC’s name is available in Idaho. (If the name is unavailable, a slight name change may be required to complete the domestication.)
• Obtain signatures on the Statement of Domestication. The Statement of Domestication must be signed by the required parties. The Idaho Secretary of State’s Business Services Office allows the Statement of Domestication to be e-signed.
• Obtain signatures on the Certificate of Organization. The Certificate of Organization must be signed by the required parties. The Idaho Secretary of State’s Business Services Office allows the Certificate of Organization to be e-signed.
• File the Statement of Domestication. File the Statement of Domestication with the Idaho Secretary of State’s Business Services Office. The Statement of Domestication may be e-filed.
• File the Certificate of Organization. File the Certificate of Organization with the Business Services of the Secretary of State. The Certificate of Organization is filed as an attachment to the Statement of Domestication and may be e-filed.²⁸
• File domestication documents with prior state. File the domestication documents with the Secretary of State or equivalent agency for the state that the LLC is moving from.

What is the Legal Effect of Idaho LLC Domestication?

An LLC can domesticate into Idaho without disrupting its regular operations. The following legal effects of an Idaho domestication are designed to allow for a streamlined transition.

• Idaho law governs the LLC. When the domestication becomes effective, the LLC is an Idaho LLC governed by the Idaho LLC Act.²⁹ The company’s Idaho certificate of organization and written operating agreement take effect and bind the LLC and its members and managers.³⁰ If the out-of-state LLC had authority to do business in Idaho as a foreign LLC, the authority becomes unnecessary and is automatically revoked when the domestication takes effect.³¹
• The LLC is the same entity with the same rights as before domestication. An LLC that completes an Idaho domestication is still the same entity, and there is no pause or break in its existence.³² It has all the same rights, privileges, immunities, powers, and purposes after the domestication—except to the extent the plan of domestication or another law says differently.³³
• The company owns the same property. The Idaho LLC continues to own all the same real estate, personal property, and other assets that the out-of-state LLC owned before the domestication. The domestication is not considered an asset transfer, and it does not impair the company’s rights or interests in its property.³⁴ There is no need to sign deeds or other documents that assign or transfer assets.
• The company has the same liabilities. The Idaho LLC still owes the same debts, taxes, and other liabilities that the out-of-state LLC owed.³⁵ It also has all the same contractual and legal obligations.
• Legal matters move forward with no interruption. Court cases, administrative proceedings, and other legal matters in which the LLC is involved move forward regardless of the domestication. If the LLC’s name changes during the process, the new name is substituted for the former name.³⁶
• Members’ interests convert according to the plan of domestication. When the domestication takes effect, ownership interests in the out-of-state LLC convert as described in the plan of domestication.³⁷ Ownership interests ordinarily become ownership interests in the Idaho LLC—with the members keeping the same percentages. Members can agree to treat interests differently—such as by exchanging them for cash, property, or rights to acquire ownership interests (or some combination).³⁸
• Domestication is not dissolution. A domestication is not considered a dissolution, and the domesticating LLC does not have to dissolve in the original state when the process is complete.³⁹ The domestication process does not trigger any rights that members, managers, or third parties may have if the LLC dissolves, liquidates, or winds up affairs—unless the LLC’s current state’s law or its operating agreement expressly provides otherwise.⁴⁰

1. Idaho Stat. § 30-22-501(b).
2. Idaho Stat. §§ 30-25-101, et. seq.
3. Idaho Stat. § 30-22-401(a).
4. Idaho Stat. § 30-22-401(b).
5. See Idaho Stat. § 30-25-105 (allowing members wide discretion to customize an LLC’s operating agreement).
6. Idaho Stat. § 30-22-506(a)(1)(B).
7. Idaho Stat. § 30-22-506(a)(2).
8. Idaho Stat. §§ 30-22-506(a)(2)-(4).
9. Idaho Stat. § 30-22-506(g).
10. See Idaho Stat. § 30-22-506(f).
11. Idaho Stat. § 30-22-501(b).
12. Idaho Stat. § 30-25-108.
13. Idaho Stat. § 30-21-901(b).
14. Idaho Stat. § 30-21-102(39).
15. Idaho Stat. § 30-21-901.
16. Idaho Stat. § 30-25-201(b)(5).
17. Idaho Stat. § 30-21-901(d).
18. Idaho Stat. §§ 30-21-102(39); 30-21-901(g).
19. Idaho Stat. § 30-21-901(i).
20. Idaho Stat. § 30-21-214.
21. Idaho Stat. § 30-21-402.
22. Idaho Stat. § 30-21-404(a)(2).
23. Idaho Stat. § 30-21-403.
24. Idaho Stat. § 30-21-405.
25. Idaho Stat. § 30-22-501(b).
26. Idaho Stat. § 30-22-503(b).
27. Fourteen states use the term articles of domestication to refer to the document that must be filed with the state to approve the domestication: Iowa, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, North Dakota, South Dakota, Utah, Vermont, Virginia, Wisconsin, Wyoming, and Indiana. The corresponding document may be called a statement of domestication (Alaska, Arizona, Connecticut, Idaho, Illinois, Mississippi, and Pennsylvania); articles of conversion (Florida, Nevada, North Carolina, Oregon, and Washington) or certificate of conversion (California, Delaware, Georgia, Michigan, Ohio, and Texas). It may also be called a statement of conversion (Colorado, Maine), certificate of domestication (Kansas), request for conversion (Louisiana), or statement/plan of domestication (District of Columbia).
28. Idaho Stat. § 30-22-505(b)(5).
29. Idaho Stat. § 30-22-506(a)(1)(A).
30. Idaho Stat. §§ 30-22-506(a)(6) and (8).
31. Idaho Stat. § 30-22-506(f).
32. Idaho Stat. § 30-22-506(a)(1)(B).
33. Idaho Stat. § 30-22-506(a)(4).
34. Idaho Stat. § 30-22-506(a)(2).
35. Idaho Stat. § 30-22-506(a)(3).
36. Idaho Stat. § 30-22-506(a)(5).
37. Idaho Stat. § 30-22-506(a)(9).
38. See Idaho Stat. § 30-22-502(a)(3).
39. Idaho Stat. § 30-22-506(g).
40. Idaho Stat. § 30-22-506(b).