Forming an LLC in Iowa: Everything You Need to Know
Forming an LLC in Iowa is done according to Chapter 489 of Iowa state law and is affordable and simple to establish.3 min read
Forming an LLC in Iowa is done according to Chapter 489 of Iowa state law. It is affordable and simple to establish. You should first learn about how the LLC is formed, along with its requirements, before determining that an LLC is the best type of business structure for you. Keep in mind that an LLC provides several benefits, including the fact that there is no maximum number of members as opposed to other business structures, i.e. S Corp.
You’ll need to choose a business name that is different from any other LLC names being used in the State of Iowa. Similar to most other states, the State of Iowa requires that the LLC business designator be included in the end of the business name, i.e. LLC, L.L.C., etc. The business designator can also be abbreviated too, i.e. ‘Ltd. Liability Co.’.
There are also restricted terms that cannot be used in any business name, and these include words like: Bank, Attorney, University, FBI, Secret Service, etc.
Once you’ve chosen your name, you can reserve that name up to 120 days for a fee of $10. If you wish to mail your reservation request, it can be sent to the Secretary of State, Business Division, Lucas Building, 1st Floor, Des Moines, Iowa 50319.
If you’d prefer to conduct business under an alternative name and not the official business name, then you can use a fictitious name. You’ll need to file a fictitious name resolution, which can be found on the Iowa Secretary of State website. You’ll need to pay a $5 in order to request the use of a fictitious business name.
The State of Iowa requires that you obtain a registered agent, the third party that will accept legal papers on your behalf. The agent must be either a person who physically resides in Iowa or a business that is authorized to conduct business in the State. Multi-member LLCs can also elect a member to act as the registered agent. If you operate a single-member LLC, and you reside in the State, then you can act as your own LLC.
Certificate of Organization
The Certificate of Organization must be filed with the Iowa Secretary of State Business Services Division. The State doesn’t provide a sample of the form; however, there are instructions for filling out the form on its website. This document will include the business name and address, the members of the LLC, and the registered agent name and address. It will cost $50 to file this document. The processing time is generally between 5-7 days.
Some additional requirements for forming your Iowa LLC include the following:
- Draft an operating agreement. While this is not necessary in the State of Iowa, it is highly beneficial.
- Obtain an EIN (Employer Identification Number), which is your business identification number. This number will allow you to open a business bank account. You will also need this number if you have employees.
- Obtain applicable business licenses and permits, i.e. zoning license, license to sell certain services or food, etc.
- Register for unemployment insurance tax and workers compensation. You’ll only need this if you intend on hiring employees.
- File a biennial report, which is due on April 1 on odd-numbered years. Each filing will cost $45 (via mail) or $30 (if filing online).
Foreign LLCs Doing Business in Iowa
If you operate a foreign business, and wish to conduct business in the State of Iowa, you will need to appoint a registered agent who is located within the State. Furthermore, you’ll need to register your foreign business by filing an Application for Certificate of Authority, along with the applicable $100 fee. This must be submitted with a Certificate of Good Standing from your foreign LLC home state, which must be dated no later than 90 days prior to the filing of the certificate.
Before you file, ensure that your business name is available in the State of Iowa. If it isn’t, then you’ll need to choose a fictitious business name, which will be the name used only in the State of Iowa for conducting business.
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