How to Get Foreign Qualification in Idaho (2022)

Do you own a limited liability company (LLC) created in a state other than Idaho, but you want to expand your business to the the Gem State? If so, you’ll need to qualify your foreign LLC in order to transact business in Idaho.

What is a foreign qualification and how do foreign LLCs function within the state of Idaho? In this guide, we’ll answer these questions and more.

Guru Tip: If you’d rather hire an online service to handle this process for you, many of the best LLC services can handle it for you.

What Is a Foreign Qualification?

A foreign qualification enables your limited liability company to do business in the state of Idaho. It doesn’t matter which state you originally formed your business in ― or in other words, the state your domestic LLC is located in ― as the qualification process to register a foreign LLC in Idaho is the same regardless of where your domestic LLC is based.

The confusion surrounding foreign qualification usually centers on what it means to “do business” in a state outside of your primary state. This gets especially problematic considering some states don’t strictly define what it means to transact business in that state. However, Idaho is one of the few states that does clearly define what it means to “transact business.”

What Qualifies as ‘Doing Business’ in Idaho

According to Idaho Uniform Business Organizations Code, “transacting business” is defined in the following way: “To engage in any commercial or other activity that is intended to or likely to produce a financial benefit, whether it is for the purpose of profit to the person who engages in the activity or for the purpose of supporting a charitable, benevolent or other nonprofit function.”

What Does NOT Qualify as ‘Doing Business’ in Idaho

Like many states, Idaho has adopted parts of the Revised Model Act, which outlines certain activities that are exempt from the above definition. The following activities do not qualify as “doing business” in this state:

• “Maintaining, defending, mediating, arbitrating, or settling an action or proceeding;
• Carrying on any activity concerning its internal affairs, including holding meetings of its interest holders or governors;
• Maintaining accounts in financial institutions;
• Maintaining offices or agencies for the transfer, exchange and registration of securities of the entity or maintaining trustees or depositories with respect to those securities;
• Selling through independent contractors;
• Soliciting or obtaining orders by any means if the orders require acceptance outside this state before they become contracts;
• Creating or acquiring indebtedness, mortgages or security interests in property;
• Securing or collecting debts or enforcing mortgages or security interests in property securing the debts, and holding, protecting or maintaining property so acquired;
• Conducting an isolated transaction that is not in the course of similar transactions;
• Owning, without more, property; and
• Doing business in interstate commerce.
• A person does not do business in this state solely by being an interest holder or governor of a foreign entity that does business in this state. (Idaho Code, Sec. 30- 21-505)”

How to Get Foreign Qualification in Idaho

To obtain Foreign Qualification for your Idaho business, you must file a “Foreign Registration Statement” with the Idaho Secretary of State. You can access this form here and file online via the Secretary of State’s website. The primary information you will need is the name and address of your registered agent, and names and addresses of your governors.

Filing Fee: $100. In addition to the Foreign Registration Statement, you will also need to submit a Certificate of Existence. This form must be requested from the state in which your business was formed, and dated within 90 days of filing your registration statement.

What Is the Penalty for Not Getting Foreign Qualification in Idaho?

There are two major penalties for doing business as an unregistered foreign entity in Idaho:

• Your business cannot bring forward a lawsuit in Idaho courts, though it can still defend itself against lawsuits
• The Attorney General can take legal action to prevent your LLC or Corporation from doing any further business in the state

Should I Hire a Business Service Provider to File My Idaho Foreign Qualification?

If you don’t want to handle your foreign qualification on your own, you have options. Some entrepreneurs choose to hire a lawyer to prepare and file their Certificate of Authority, which can be a good option if you’re concerned about getting the job done right. However, attorney’s fees can be quite expensive.

The other option is to hire a business service provider like Incfile or ZenBusiness to register your foreign LLC with the state of Idaho.

These companies can typically get your foreign qualification done for a fraction of the price of an attorney. This is our preferred route if you don’t want to go with the DIY option.

Conclusion

Getting foreign qualification in Idaho is easy, with simple online forms that do not require excessive information. One of the most time-consuming hurdles is acquiring a certificate of existence from your business’ home state, as rules and wait times can vary. However, just because it is relatively easy does not mean that you should take the foreign qualification process lightly. The penalties for non-compliance can be severe -- you can even be prevented from doing any further business in the state.

We hope this article managed to answer your questions about obtaining an Idaho foreign qualification, and we wish you a prosperous business future!