How to Start an LLC in Iowa (IA LLC 2024) (original) (raw)
How to Start an LLC in Iowa: If you’re looking to start an LLC in Iowa, you’ve come to the right page. Setting up an LLC is easy and cost-effective. To form an LLC, you must follow a few steps that include naming your LLC, hiring a registered agent, filing your formation documents, doing the operating agreement, and finally obtaining the EIN. You can easily set up your LLC at a very low cost in Iowa. Though, you must pay the mandatory state filing fee. These fees and charges can be tax deductible, making the LLC formation cost almost negligible.
On this page, You’ll find all the steps that must be taken to ensure that your Iowa LLC has been correctly formed. We recommend you read the whole article very carefully, word by word, don’t miss anything 🙂
How to Start an LLC in Iowa
An LLC (aka Limited Liability Company) is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. For an LLC, members’ personal assets are not affected by business debts. However, in some cases, if the LLC is sued for business debts, courts might pierce the corporate veil and use the owner’s personal assets to meet their corporate liabilities.
If you wish to start an LLC in Iowa, you must file your Certificate of Formation with the State and pay a filing fee of $50. While it’s the most important step, it’s not the only one. There are 4 other crucial steps to follow to get your LLC formed in Iowa. Below are all 5 steps that explain everything you need to do to start an Iowa LLC in 2024. Let’s get started! You can always hire a professional LLC formation service in Iowa to set up your LLC instead of doing it alone; a Pro service will ensure everything is done properly.
Step 1: Decide a Name for Your Iowa LLC
The first step while forming a limited liability company in Iowa is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
Iowa LLC Naming Guidelines
There are a few specific requirements all the LLCs in Iowa have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available and no other existing business in Iowa can have the same name. ZenBusiness offers unlimited business name searches without any hassle.
- “Limited Liability Company”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Iowa State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
| Important Links – | Submit Offline Form to – |
|---|---|
| Iowa Business Entity Search – Online SearchName Reservation Form – PDFName Reservation Form – OnlineIowa LLC Name Search – Instructions | Secretary of StateBusiness Services Division Lucas Building, 1st FloorDes Moines, Iowa 50319 |
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided on, then you can reserve your LLC name for 120 days. To keep the name, you must file a name reservation application and pay $10 to reserve your name with the Iowa Secretary of State.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Iowa Secretary of State by submitting a Fictitious Name Resolution Form in Iowa along with the filing fee of 7∗∗forthefirstpageand∗∗7 for the first page and 7∗∗forthefirstpageand∗∗5 for each additional page after the first page.
Recommended: You can do name search, business domain, website, emails, and a lot more in one place by hiring a professional service. We recommend using –
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Apart from LLC formation, ZenBusiness offers customized website templates and business emails at a very reasonable price. If you plan to get a website, then it is wise to have a “.com” domain for your business, but these days you can also use other TLDs like “.io”, “.company”, “.xyz,” etc. Here you can get everything you need for your business in one dashboard.
Do I have to include LLC in my company email/domain?
It is not legally mandatory to use the word LLC in your domain name or email. If you want, you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in Iowa
The second step to forming an LLC in Iowa is to appoint a Registered Agent. A registered agent is a person or business entity working on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Iowa. Hence, hiring a competent Iowa Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of Iowa or has a physical street address. This address will be used as the principal address of your LLC to receive any legal documents. Most LLC formation companies also provide registered agent services. Below are two great LLC formation services; even if you buy their cheapest plan (normally $0), you also get registered agent service and other services at a very reasonable price.
| LLC Service | Our Rating & Pricing | Top Features | Learn More |
|---|---|---|---|
#1 TOP PICK |
4.5/5 $0 + State Fees | 100% accuracy guarantee Worry-free service Great customer support | Learn More |
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4/5 $0 + State Fees | Free LLC Formation Affordable Add-on services Other business solutions | Learn More |
These two are our top recommendations for registered agent service, as they are competent and authorized to conduct business in Iowa. Some LLC formation services also offer standalone Iowa registered agent services. You can purchase only Registered Agent services without purchasing any other LLC formation services. This standalone service might become handy if you are doing it yourself and don’t want to disclose your home address or you don’t want to pierce the corporate veil.
Who Can Be a Registered Agent?
A person above 18 years of age and has a physical address in the state of Iowa can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One is responsible for handling all the legal documents on the LLCs behalf.
Can I Be My Own Registered Agent?
Yes, you can be your own registered agent if you are a resident of the state of Iowa and you are above 18 years of age. To become a registered agent, you must have the authority to conduct any type of business in Iowa.
Why Shouldn’t I be My Own Registered Agent?
There are a few reasons why you shouldn’t be your own registered agent. The address of the registered agent is used to communicate with the SOS or for any legal activities. If you are your own registered agent, you might have to upload your personal address to the public forum. Besides, the registered agent must be at the address during business hours. It won’t be easy for you as you also have to take care of other things in your LLC. Hence, it is wiser to appoint a separate entity as your registered agent.
What is Piercing the Corporate Veil in LLC?
If an LLC is sued in Iowa, in some cases, courts might decide to lift the corporate veil, which means the owners of the LLC will be personally liable for their business debts. They might have to forgo their personal assets to repay their business debts. This is called piercing the corporate veil, where personal and business assets are not separated anymore. Your personal assets can be protected if you have enough capital and all your LLC documents are properly filed.
Registered Agent Consent Application
In Iowa, there is no need to submit a separate Consent Letter to the Secretary of State. At the time of change of Registered Agent (or the name or address), the new Registered Agent has to sign the consent letter. It comes with the Application form to Change the Registered Agent. Also, if not with the Change form, the agent can separately write a consent letter and submit it along with the change of registered agent form. The filing fee of $5 should be paid for it. For more information on the same, read our guide on Iowa Registered Agent.
Step 3: File Certificate of Organization in Iowa
The third and most important step in forming an Iowa LLC is to file the Certificate of Organization. This Iowa Certificate of Organization is a legal document that is required to register your business with the Iowa Secretary of State. It costs $50 (by mail and online) to file your formation certificate in Iowa.
The Certificate of Organization includes details like the name of the LLC, the registered agent’s name, address, employees’ details, and the company’s structure (member-managed or manager-managed). Before hiring employees in Iowa LLC, one should know about the rules and regulations thoroughly. Also, if you are expanding your existing business (an LLC) in other states to Iowa, you must register as an Iowa Foreign LLC.
How to File Online
Go to the Secretary of State Online Service. You will get the online service page. If you are already a subscriber, then click on the “log in to Subscribe Account” option and log in with your credentials. If you’re not subscribed, you must create a new account by clicking on the “Sign-up” button below. Read more about the Iowa Certificate of Organization for online registration.
Processing Time: Normally, it takes around 2 weeks (approx) to get your LLC formed in Iowa. The processing time for online filing might be a little faster than offline filing. With an additional cost, you can get expedited filing as well. However, the document processing time can be changed due to various factors.
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Every LLC owner has to pay the filing fees to register their business in Iowa. This fee is mandatory but also tax deductible. If you’re doing it yourself (filing on your own), it will not cost you any additional service fee. However, it is not feasible to do that as the DIY process might be delayed, complicated, and messy, especially if you’re a novice entrepreneur. Hence, it is recommended to get professional guidance to get your LLC formed in Iowa.
Step 4: Create Your Iowa LLC Operating Agreement
Moving on to the fourth step, filing your operating agreement. An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing an Iowa LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation that helps in taking future business decisions, especially if you decide to dissolve Iowa LLC later. Hence, having an operating agreement may not be necessary, but it is surely ideal.
Recommended: You can get a professionally made operating agreement for very less cost with ZenBusiness. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
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The operating agreement draft can be created for free if you don’t hire a professional. However, there is an advantage to appointing a proficient person/service. You will get a businesslike quality operating agreement at a very cheap fee, which will help you in the future. Hiring a professional service means you can sleep well at night 🙂
Step 5: Filing an LLC EIN in Iowa
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business.
EIN in Iowa is needed when the LLC hires employees. Hiring employees in Iowa LLC requires following specific rules and regulations. On the other side, EIN for Iowa foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN), one must fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally, complete the form and send it to the address given. You can also get an EIN Assistant to help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
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Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulations, you are now done with all the necessary steps to form your Limited Liability Company in Iowa. If you do it yourself, it should take you a long time to understand and do all the steps properly.
However, if you use ZenBusiness, it should be way faster. You will always have a live chat option and phone support with experts for any help you need. Their worry-free service will make things easier for you.
After Starting Your Iowa LLC
After forming your LLC, there are still some things that you will need. The most important thing is to separate your business and personal assets. LLCs have limited liability protection that protects your personal assets from business liability. This is called a corporate veil. However, the corporate veil can be lifted or pierced by the court if the LLC is sued. In that case, the owners of the LLC become personally liable for their corporate debts. A few things like appointing a legit registered agent, having enough capital, and filing all the major documents with the state can save the LLCs from being pierced into the corporate veil.
BOI Report Filing
According to the Corporate Transparency Act, every LLC, corporation, and other type of business that is registered with the Iowa SOS or similar authority, must file the BOI report with FinCEN. From January 1, 2024, it is mandatory to file a BOI report for every business entity. In this report, LLCs have to share information about the beneficial owners (having equal or more than 25% share). LLC owners can file BOI reports online or offline.
LLCs in Iowa that are created before January 1, 2024, should file their BOI report by January 1, 2025. LLCs that are created in 2024, must file the BOI report within 90 business days of finishing the LLC formation process. Missing out on filing the BOI report may lead to a monetary penalty of $500/day.
Apart from that, there are a few things you need to take note of,
- Get a company business bank account
- File Iowa business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees
- File an Iowa LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
The LLC formation processing time in Iowa is 7-10 business days if filing offline (by mail). The process takes 1 business day if filed online. Check how long it takes to form an LLC to know about the tentative timelines.
Cost of Iowa LLC
LLCs can be formed by spending less price. Apart from the mandatory state filing fees, you don’t have to bear additional service charges if you do it yourself. Following are the fees and taxes LLCs in Iowa must pay to register and run a business in the state. Forming an LLC is no doubt cost-effective compared to other business structures. However, the fees and charges (tax-deductible) that you must pay to the state, such as name reservation fee, name filing fee, LLC filing fee, and Franchise Tax & Sales Tax (If applicable). Here are the main fees and taxes you must pay while forming your limited liability company in Iowa,
| Fees/Tax | Amount to be Paid |
|---|---|
| Name Reservation Fee (online and by mail) | $10 |
| Certificate of Organization Fee | $50 (by mail and online) |
| Business Tax | 12% |
| LLC Biennial Fee | $60 |
| Sales Tax | 6% |
In Iowa, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then you can do that online. Your LLC name will be reserved for 1 year without registering your LLC. It can be done by paying $10.
In Iowa, an Annual Report has to be produced every year. It costs $60. Also, the State of Iowa requires the Business Tax each year. The amount is paid at the rate of 12% of the LLC revenue. Read our guide on LLC costs in Iowa for more information.
Iowa Foreign LLC
If you are interested in forming a Foreign LLC in Iowa then you need to file the Certificate of Foreign LLC to the Iowa Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the Iowa SOS to form your foreign LLC in Iowa. To know more in detail, check out our guide on Iowa Foreign LLC.
Reasons to Start an LLC in Iowa
Iowa has the biggest industry of advanced manufacturing units. Around $28,000+ billion is contributed by the advanced manufacturing businesses in Iowa, as reported by the Bureau of Economic Analysis in 2016. Iowa is one business-friendly state in the USA.
Tax Filing Become Easy In Iowa LLC
Starting an LLC in Iowa is beneficial because of the tax filing structure it has. It is easy and consumes less time for the LLCs. This leads to saving some time for the entrepreneurs. The filing fee is also less here. Not just the tax filing if you will look up at the management and the administrative tasks of an Iowa LLC, they are also easy to work on.
Moreover, it is hassle-free to set up all the rules and regulations necessary to run the businesses efficiently. Due to these swift procedures, the business-minded people start calculating the time they save and decide to Start an LLC in Iowa.
International Trade Assistance For LLC
International trading is a dream of businesses that are new in the field and are trying to increase the boundaries of their business. If you are moving to Iowa, then you should know that there is a program in which the government provides international trade assistance to some businesses. For that, one needs to show their authority and prove that they actually deserve this.
Flexible Distribution In Iowa
In many states starting up an LLC with a member, partners abide a person that they have to distribute the profits of the LLC equally. But in Iowa, this rule is changed. The member can take the decision to divide the profits among the partners in whatever way they want.
Economic Development Set Aside Assistance
If a person is looking forward to starting a small-sized business, then the government becomes a helping hand for them and helps them achieve growth. Under this program, if the small and medium-sized businesses can increase job and employment opportunities then they will receive financial assistance from the government.
The only condition is that a person has to clear the expectation bar that the government has set. Only some innovative start-ups will get this help under which they can receive an incentive of up to $1 million.
Other Tax Incentives
There are some other business tax credits available in Iowa. High-Quality Jobs, New Job Creation, Redevelopment programs, Research Activities, Equipment, Computer & Industrial Machinery programs, and some more programs are available. The qualified LLC can enjoy long-lasting benefits from these tax credit programs. Read more on Iowa’s classification of LLC tax.
Top Businesses in Iowa
When an entrepreneur wants to Start an LLC in Iowa, then you should know the best business industries in Iowa. There are some specific businesses to which the state is providing an excellent environment. The list of businesses is mentioned below in detail.
Renewable Energy
Facts show that Iowa is number 1 in the United States of America regarding ethanol and biodiesel production. The reason behind this is the waste product of agriculture is utilized better with rising and modern technologies. Due to this, high-quality fuel is produced. Due to the increase in demand for biofuel in every sector, more businesses need more businesses to cater to the needs.
Value-Added Food Manufacturing
The state of Iowa is known for supplying 1/14th of the total food consumed in the USA every day. More people depend on the food that is produced in the state due to the quality. That is why the manufacturing and conversion of raw material from agricultural fields to processed, packed food is on the rise in the state. From beef to dairy and from poultry to food ingredients, the value addition in every material is done and then sold in the market.
The companies present in the state have doubled in the past 7 years, showing how profitable this business can be.
Warehousing business
The state of Iowa is benefitted from its geographical location. They are located in the mid due to which the demand for a warehouse in the state is more. The total sales that Iowa warehouse has made in a year are $5 billion. The state allows catering to be national and international products and transports and earn money by providing them warehouses.
Here are some small budget high-profit business ideas specifically designed for Iowa State
- App Development Business
- Food Truck Business
- Blogging in Specific Niches
- Bakery Business
Iowa LLC Formation Review
Time needed: 5 minutes
Just to recap, here are the easy steps again when forming an LLC in Iowa. Click on the steps in this list to read the full detail.
- Name your Iowa LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Iowa, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming an LLC in Iowa. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Iowa but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
F.A.Qs
Can I file an LLC in Iowa by myself?
If you are a resident of Iowa, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
What is the cost of forming an LLC in Iowa in a year?
Apart from the formation fee of 50(domesticLLC)and50 (domestic LLC) and 50(domesticLLC)and100 (foreign LLC), LLC costs in Iowa include $60 for Biennial Reports every 2 years. LLCs are liable to pay sales tax of 6% every year.
How long does it take to get an LLC in Iowa?
It takes no time (immediate) to get an LLC in Iowa if you file it online. It takes up to 14 business days to get an LLC for the mail filing. If you hire a professional LLC service, then it might take less than that. We recommend TailorBrands which has impeccable turnaround time.
How to renew my LLC in Iowa?
Every year all the LLCs have to submit an Annual Report and pay $60 every 2 years to the Iowa Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
What is the tax structure for an LLC in Iowa?
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Iowa Classification of LLC Tax.
In Conclusion
When it comes to forming an LLC in Iowa, it is much simpler than other business structures. In Iowa, starting a small business or a start-up is easy because of its diverse resources. For small budget holders, forming a limited liability company is desirable. The steps explained in this article are generic steps for starting a business in Iowa. It is recommended to consult an attorney or service provider.
In Iowa, while establishing an LLC, make sure you check with the local bodies like the city council and district office to get updated with local regulations. We recommend ZenBusiness, one of the best LLC services that offers LLC formation at $0 (+ state filing fees). Hiring a professional service would make things easier. From having a registered agent to complying with the local and state government, everything will be smoother than doing things all by yourself.