If you’re ready to form a small business in Iowa, a Limited Liability Company (LLC) is perhaps the best business structure you can choose. An LLC provides you with the beneficial legal protections of a corporation, but it’s easier to run and offers better tax rates.
Forming an LLC in Iowa follows the same process as other states, but Iowa does have a few differences that can make it more complicated. To make the process go as smoothly as possible, follow the steps in our guide below closely.
The first step is to choose a name for your LLC. This is something you’ve likely already given a lot of thought to, so be ready with your ideas. Note that your LLC doesn’t have to match your brand’s name exactly, and you can use a DBA (doing business as) name later should you decide to rebrand.
You need to make sure that your LLC’s name is not already in use by a business in Iowa, so you will need to do a search to check that your preferred LLC name is available. You can search the Business Entities database with the Iowa Secretary of State to see if a name is already taken.
Note that your name must be distinguishable from other names, which means it can’t be so similar someone may think it is the same business. For example, if there is a business called Happy Homes LLC, you may not be able to call your business Happiest Homes LLC. If in doubt, call the Iowa Secretary of State’s office and they’ll be able to tell you if it’s okay or not.
Your chosen LLC name must include a designator on the end to identify it as such. The designators you can choose from in Iowa are:
Your business name also can’t include any terms or abbreviations that would affiliate it with a government agency, such as State Department, FBI, or IRA. You may also need to file additional paperwork if you wish to use a restricted term like “bank” or “attorney” in your LLC’s name.
If you want to have all your business assets under one name, it is a good idea to check whether a related domain name (website address) is available.
If you have found a suitable business name but aren’t going to be filing for your Certificate of Organization for a little while, it’s a good idea to reserve your name. You can find the form you will need to do this here, which can be either mailed or submitted online with a filing fee of $10, and this will reserve your business name for up to 120 days.
A Registered Agent is a person or company who takes on the responsibility of receiving legal (“Service of Process”) and government mail on behalf of your Iowa LLC. “Service of Process” are those legal documents, like tax notices, as well as subpoenas and the like, which you hope not to receive.
In the state of Iowa, your Registered Agent must have a physical address within the state and be able to accept mail during normal business hours (9 AM to 5 PM, Monday to Friday). If you reside in Iowa, this person can be you, a family member, a friend, or a commercial registered agent.
Since the registered agent’s address will be available publicly, most LLC owners decide to use a commercial registered agent. A commercial registered agent will forward your mail to you electronically or physically for a small monthly fee.
If you are unsure whether or not you should act as your own registered agent, read through our guide here.
If you decide a commercial registered agent is the best choice for your LLC, we can be your agent in Iowa. Simply reach out to us and we’ll give you the information you need to continue with your Iowa business formation.
This is the step that makes your business an official legal entity in Iowa. This step can be completed by mail, but it will be simpler (and much quicker!) if you submit it online to the Iowa Secretary of State.
Most states will provide you with an application form or template, but Iowa makes it slightly more difficult by necessitating that you draft your own following their rules.
Fortunately, their rules are simple. Filing a domestic LLC in Iowa costs $50, which can be paid online. The information you will need to include in your Certificate of Organization is:
If you are filing for a Foreign LLC, meaning you already have an LLC in another state, you need to file an Application for Certificate of Authority. The filing fee for a Foreign LLC is $100. You also need to include a Certificate of Good Standing or a Certificate of Existence from your home state, which cannot be more than 90 days old.
Once the Secretary of State has filed the Certificate of Organization, your LLC will be formed, and you can move on to the next steps in this guide. It usually takes 1-2 days for your documents to be approved if you file online.
An Operating Agreement is not legally required by the state of Iowa, but it is a good thing to have and is a necessity if you are not the sole owner (known as a “member”) of your LLC. As an internal document, the Operating Agreement does not need to be shared with anyone outside of your business.
Your Operating Agreement needs to outline the rights, responsibilities, and obligations of the LLC members. It should include the following:
With your Iowa LLC formed, it is time to get your Employer Identification Number (EIN) so that you can complete the rest of the steps. An EIN is essentially a Social Security Number for your business that will allow you to apply for licenses, hire employees and handle payroll, pay taxes, and open a business bank account.
The good news is the process of getting your EIN is incredibly easy, free, and fast. Simply click here to apply for your EIN online and your EIN will be automatically generated for you.
You also have the option to apply by mailing Form SS-4, but you will have to be prepared to wait up to a month to receive your EIN.
All Iowa LLCs are required to file a Biennial Report with the Iowa Secretary of State. This report is due by March 31st during odd-numbered years only. The fee for filing online is $30, or you can send your report by mail, but doing so costs more at $45.
Don’t forget to register with the Iowa Department of Revenue for any taxes that you may need to pay – you can register your LLC online here.
One of the last steps you need to take before you will be able to operate in the state of Iowa is to obtain any necessary licenses and/or permits that your business needs. Since Iowa does not have a general, comprehensive business license, what your LLC will need depends on your industry and/or the services you provide.
The Iowa Business License Information Center has a useful Business License Search to help you determine what licenses and/or permits your Iowa LLC will need before it can open for business.
Alternatively, you can look to your LLC’s city or county clerk for more information.
Though not a legal requirement, your Iowa LLC will need to have a business bank account. Even if you are not the only member of your LLC, a business bank account is essential to ensure that your personal and business finances stay separate. This will ensure that your personal assets are protected if your business should get into legal trouble. After all, isn’t personal protection why you chose an LLC business structure?
Make it easier for yourself, and keep your personal assets safe, by using your newly acquired EIN to open a new business bank account.
The final step of this guide is to understand that you are legally required to keep the following essential documents on-site at your LLC’s registered office:
Now you’ve reached the end of our guide, your Iowa LLC is formed and you’re ready to get to business!
Although this process is straightforward when you know what you’re doing, it definitely takes up a lot of time, filling in the right forms and making sure all documents are drafted properly with the correct information included. Wouldn’t you rather be focussing on the more exciting aspects of starting a business?
Luckily for you, we help aspiring business form LLCs and corporations every day, and we can do the same for you. If you want to get on with perfecting your services, developing products, and getting your marketing strategy ready, we’ll handle the boring stuff for you.
All you need to do is fill in this short form and we’ll take care of the rest, registering your business name, filing for your Certificate of Organization, and getting your EIN for you.