How To Form An LLC In Iowa: Everything You Need to Know
Forming an LLC in Iowa is a simple process that requires naming your LLC and registering it with the state of Iowa. 3 min read
How to Form an LLC in Iowa
Forming an LLC in Iowa is a simple process that requires naming your LLC and registering it with the state of Iowa. An LLC is a flexible business entity that provides personal legal protections to its members. In essence, an LLC protects your personal assets in the event of a legal proceeding or judgment against you. Your personal assets include:
- Personal Bank Accounts
This means that your business is sued instead of you. There is no limit on the number of members, and members can include individuals, other LLCs, foreign entities, and corporations.
It is known as a hybrid business entity that combines aspects of a LLC and corporation. You may also create an Iowa LLC to purchase or hold tangible assets such as:
- Real estate
Creating an LLC is an easy process, but you must meet certain criteria before successfully registering your entity.
Naming your LLC
Before deciding on a name, you must check to see if it’s already in use by another organization. The name should be unique when comparing it to other names that may sound similar. You can check to see if your intended name is already taken in the Iowa state online database. Also, your name must include designators such as “LLC,” “L.L.C.,” or “Limited Liability Company.” Further, you are restricted from using certain words, such as “attorney,” “bank,” or “university.” Such words come with additional paperwork and certification.
With that, you may not use the following words in any fashion:
- Secret Service
You may not use any words that link your LLC to government agencies.
Once you choose your name, you may reserve it for up to 120 days as you complete the registration process. Reserving a name is not mandatory, but it prevents others from taking your name until your paperwork is fully registered. In addition, you should reserve a domain name, even if you have no intention of taking your business online. Doing so prevents others from using your business name online. Further, you should also create a business email that matches your LLC name (ex. @yourcompany.com). The application can be registered online or via mail, and you must pay a $10 filing fee.
Iowa requires you to appoint a registered agent. A registered agent accepts any legal paperwork on your LLC’s behalf. A registered agent must meet the following qualifications:
- Have a Physical Street Address in Iowa (No P.O. Boxes)
- Must be Authorized to Conduct Business in Iowa
A registered agent can be anyone within the LLC, or you can appoint yourself.
Certificate of Organization
Your Certificate of Organization creates your LLC. Most states provide the filing forms, but Iowa forces you to use your own paperwork to file. However, the state gives you instructions on its website so you can file accordingly. You can either create your own certificate or have a lawyer do it for you. A good certificate should include:
- Name of LLC
- Primary Address
- Name of Registered Agent and Address
The filing fee is $50, and you can mail the form, or apply online. Processing times take from two to three business days, depending on the volume of applications coming in.
An operating agreement establishes the internal operations of your business. It also allows other members to know their rights, duties, and responsibilities. An operating agreement is not mandatory, but you should create one to organize the management structure of your business. Most importantly, your agreement should also outline the compensation system within your organization.
The compensation plan can be based on the percentage ownership that each member has purchased in the company. There are no set rules on how to divide payments based on each stake; this is something that you and other members must agree upon. The operating agreement does not need to be mailed into any state agency, but you should keep it in plain view for all members and/or employees to see.
Employer Identification Number (EIN)
An EIN is used by the IRS to identify and tax your business. You only need an EIN if:
- You have more than one member
- If you choose a corporate tax structure
- If you intend to hire employees
You may get an EIN for free via the IRS website.
Do you need to learn more about how to form an LLC in Iowa? You can do so by submitting your legal inquiry to our marketplace. UpCounsel’s lawyers have graduated from the most prestigious universities in the county and will help you through the LLC filing process in Iowa, including any other questions or concerns you may have. In addition, we will help you obtain the necessary permits and licenses so you can legally do business in Iowa.