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Does an Idaho LLC Provide Limited Liability to all Owners/Investors?

Yes. 

An CDA LLC owners usually enjoy limited personal liability for many of their business transactions, but this protection can be diminished. Since CDA LLC has little rules regulating and formalizing their business behavior, the owner(s) can unintendedly be putting themselves at risk.

CDA LLC owners can be held personally liable if:

  • Personally injures someone.
  • Personally guarantees a bank loan or a business debt.
  • Fails to deposit taxes withheld from employees’ wages.
  • Intentionally engages in fraud, illegal, or recklessness that causes harm.
  • Treats the LLC as an extension of their personal affairs, rather than as a separate legal entity.
  • No functioning operating agreement to govern their behavior.

If owners don’t treat the Idaho LLC as a separate business, a court can decide that the CDA LLC doesn’t exist. This would mean that the owners are instead doing business as individuals who are personally liable for their acts.

Does an CDA LLC Provide Owners with Shares of Stock?

No. 

An CDA LLC cannot issue stock, nor can they issue stock if elected to be taxed as an CDA S or C-Corporation.

Does CDA LLC Pay State Taxes?

Yes. 

All income from your CDA LLC will pass-through to you personally, and that income will be subject to Idaho state taxes on your personal tax return.

or  CDA C-Corporation Elections: While your taxes will change, the facts, ownership, and management structure will not.

Does an CDA C Corporation Have Flexible Tax Reporting?

No.

If you form your CDA businesses as a C-Corporation, then there is no other taxation option available.

Does an CDA LLC File Annual Idaho State Renewal Reports?

Yes.

All CDA businesses, regardless of entity type, must complete the annual state renewal report.

You will receive a renewal card in the mail annually. It is usually a bright, colorful postcard that is sent out to your business mailing address or a registered agent.

On the card, it will say “Annual Report Due – Reminder Notice.” On the back of the card, there is a website www.sos.idaho.gov with a PIN below. You will go to this website and file online.

Renewing your CDA business license with the Secretary of the state is easy. They will have you confirm a few pieces of information, mostly concerning any changes that have occurred during the year.

Once you are done, print the completed Annual Report Form and place it with your other important documents.

Does an CDA LLC Have a Perpetual Existence?

Yes. 

Idaho state allows CDA LLC to have a perpetual existence that can outlive its original owners/members. However, this may not be true with other states.

Does an CDA LLC Have Strict Ownership Rules?

No. 

CDA LLC’s are unique in that there are no restrictions on ownership. Both resident and non-resident aliens, as well as foreign persons and entities, may own an LLC within the United States. CDA LLCs can also be owned by individuals, corporations, and other LLC’s.

Does an CDA LLC Need to take a “Reasonable Wage”?

No. 

Since an CDA LLC is a pass-through and unable to differentiate between a wage and other payout methods, you will pay self-employment taxes on your share of the profits.

S or C-Corporation Elections: While your taxes will change, the facts, ownership, and management structure will not.

Does an CDA LLC Pay Self-Employment Taxes on All Profits?

Yes. 

An CDA LLC is a pass-through and unable to differentiate between a wage and other payout methods. Therefore, you will pay self-employment taxes on your share of the profits regardless of how you withdraw the funds.

S or C-Corporation Elections: While your taxes will change, the facts, ownership, and management structure will not.

Does an CDA LLC Provide Large Fringe Benefits?

If you’re an CDA LLC taxed as a partnership or sole proprietor, your fringe benefits are generally considered guaranteed payments or other compensation for income and self-employment tax purposes.

Naturally, there are exceptions to the general rules. Certain fringe benefits aren’t taxable; instead, they are given the same tax treatment as non-owner/employees.

CDA LLC fringe benefits not subject to taxes:

  • Cell phones provided for non-compensatory business reasons
  • On-premises athletic facilities
  • Minimal value (de-minimis) benefits
  • Minimal value (de-minimis) meals
  • Retirement planning services, under employer’s qualified plan
  • Working condition benefits
  • Lodging on business premises
  • Meals on business premises provided for the convenience of the employer
  • Employee discounts