LLC in Iowa: Everything You Need to Know
You can also use an Iowa LLC to hold tangible assets in the form of aircrafts, boats, cars, or real estate. 3 min read
LLC in Iowa
An LLC in Iowa separates personal from business assets. Your personal assets include such things as:
- Personal bank accounts
In essence, LLCs protect your personal assets in the event of a judgment or court proceeding against you. You can also use an Iowa LLC to hold tangible assets in the form of aircrafts, boats, cars, or real estate. If you are already familiar with state guidelines, creating an LLC is a simple and inexpensive process.
You can do so by registering with the Iowa Secretary of State office. Fill out the necessary paperwork, and pay any dues to register your LLC. You will register your LLC using articles of organization, otherwise known as your formation document.
Choosing Your Name
Before filing, you need to find a suitable name for your business. Keep the following in mind when choosing a name:
- The name must end with “LLC” or “L.L.C.,” or “Limited Liability Company.”
- You LLC cannot use the names of any other business entities, such as “Corporation,” “Limited Partner or “Trust.”
Your name cannot associate with government agencies, such as “Secret Service” or “Treasury Department.”
An Iowa name must be “distinguishable upon the records,” which means that the public should differentiate your chosen name from ones existing in the state database. Keep in mind that different designators do not qualify as differentiation in names. For instance, your desired name of “Smith Investments” cannot be used if you found a similar company called “Smith Investments Inc.”
You may search data by going to the online Iowa database to see if your intended name is already in use. In addition, check to see if you can extend your name registration in domain form as well. Register a domain name even if you do not wish to create a website. This prevents other parties from using your name online.
With that, you can obtain domain privacy protections with your order to safeguard your personal information.
Once your name is chosen, choose a registered agent of your name. A registered agent accepts legal documents or other important papers on behalf of your company. Registered agents are a mandatory part of the LLC filing process. The agent in question must have an Iowa-based address, and P.O. boxes are not permitted. Further, the agent must operate during normal business hours.
The registered can include the following:
- Friends or family members
- Another company
- Anyone who agrees to be a registered agent
“Service of Process” is the legal mail process that comes from state or legal offices. The service of process will be served to your agent, who will then forward the documents to your LLC. If you choose yourself as the registered agent, you will place your name on the filing documents. If you appoint someone else, he or she would need to sign as the agent on your filing documents. Having a commercial registered agent is more reliable and offers more privacy.
Articles of Organization
Iowa does not have an official articles of organization document, but the state will accept any form as long as it has the following information:
- LLC name
- Name of registered agent and office
- Primary business address
- Manager-managed or member-managed
- Duration (Leave this part blank if you wish to keep your LLC opened indefinitely)
Once you completed the articles of organization, you can send it to the Secretary of State office via online, mail or fax. The approval process takes 7-14 business days regardless of submission method, but process times may vary depending on submission volumes and how well-staffed the office is.
An operating agreement is not mandatory, but you should have one in place to structure the internal operations of your organization. It is an internal document and an agreement between all members of the LLC. An operating agreement should include the following guidelines:
- Compensation Plans and/or Profit Distribution System
- Management Structure
- Member Roles
One of the most important aspects of an operating agreement is detailing the percentage stake of each member and issuing shares accordingly. You may tailor a compensation plan how you see fit, but all members should agree to the same system.
If you are contending with a complex ownership system involving investors and/or many members, contact an attorney to get guidance in setting up the right payment system for your business.
All information in your articles of organization should also be in the operating agreement.
To find out more about an LLC in Iowa, submit your legal inquiry to our UpCounsel marketplace. UpCounsel retains the best lawyers in the country help you through the filing process in Iowa. We will also help you in areas pertaining to tax filing and obtaining the necessary licenses and permits for your business.