How To Form An Iowa LLC
By Bazal Razzaq
Updated: August 29, 2023, 12:30pm
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- Choose a name for your Iowa LLC
- Create a business plan
- Appoint a registered agent
- Obtain the nine-digit EIN from the IRS
- Prepare and file a Certificate of Organization from the Secretary of State
- Draft an Operating Agreement
- Submit a Statement of Information/ Biennial Report
- Final Word
- How To Form An LLC In 50 States
- Frequently Asked Questions (FAQs)
Looking for ways to set up an Iowa LLC with ease? Well, you’re at the right place!
Over the years, Iowa has seen an increase in business registrations. In fact, 2021 boasts the formation of over 33,260 new businesses between July 1, 2020, and June 30, 2021.
Well, you can be the next! Our detailed guide discovers how you can create an Iowa LLC in the best and most efficient way possible.
#1 Choose a name for your Iowa LLC
The very first step in your Iowa LLC formation journey should be choosing a distinct, unique, memorable, and legally compliant name for your company. Your chosen name should adhere to the following naming requirements to avoid any future troubles,
- Your LLC’s name must be distinguishable from existing business names on record with the Iowa Secretary of State. You can check for name availability on the Iowa Secretary of State business name database.
- Your LLC’s name must include a legal ending like “Limited Liability Company,” “LLC,” or “L.L.C.”
- Certain words that imply a specific purpose (e.g., “bank,” “insurance,” “university”) may require additional approval or documentation.
- Your chosen name should not be misleading or imply a service/purpose it doesn’t have/provide.
- You can reserve a name for 120 days by filing a reservation application.
Still unsure? Here’s a complete list of Iowa’s naming rules and regulations. You can go through it before deciding on a proper name.
We recommend checking with the Iowa Secretary of State or legal authorities to ensure your chosen name complies with all requirements.
You have the option to operate your Iowa LLC with two options,
- With its legal name,
- or by adopting a DBA (“doing business as”), which is also known as an assumed name, trade name, or fictitious name.
For those who don’t know, a DBA is basically a pseudonym through which your customers will identify your brand. If you’re not comfortable doing business with your official LLC name(one that’s mentioned in your Articles of Organization form) and would like to use a different, less formal name for your company, a DBA is the correct option! You can register your trade name with the Iowa Secretary of State either online, by postal mail, or by filing a Fictitious Name Resolution. The filing fee is $5.
If you already have a unique and legally compliant name in mind but just aren’t prepared to start your LLC yet, you always have the option to reserve your name by filing the Application for Reservation of Name with the Iowa Secretary of State. You can save it for up to 120 days. The filing fee is $10, and submissions can be made online or by mail.
#2 Create a business plan
While it’s not a mandatory requirement for an LLC in Iowa to have a business plan, it’s an open secret that every successful one does! A structured, transparent, and clear business plan outlines the roles, rights, and responsibilities of every owner/member, employee, and manager of your company and also helps sort out your daily operations, finances, and due governance of the LLC. The best part? Well, you can create a functional plan that best suits your budget.
Here’s most of what you can include in your affordable business plan,
- A Brief Company Description and Summary
- Your LLC’s main objectives, goals, and values
- Complete Market research and analysis
- What Makes Your Business Special
- Your products and Services
- Marketing and promotion strategies
- Who Your Customers Are
- How You Plan On Reaching Your Customers
- Financial Goals and Management
- Lastly, Logistics.
#3 Appoint a registered agent
To ensure the proper formation of your LLC, you need to hire a registered agent. This agent will receive important legal, financial, and official notices and documentation for your business, like government correspondence, lawsuit notices, and tax papers.
Usually, you have the following options when it comes to choosing a statutory agent for your Iowa LLC:
- Serve as your own registered agent.
- Choose another business entity.
- Hire a registered agent service.
- An individual within the company(manager/employee/member)
- An Attorney, lawyer, or legal facility.
To become a registered agent for an Iowa LLC, you must:
- Be located in Iowa or have a physical street address in the state.
- Maintain regular business hours to receive legal documents and official mail.
- Obtain consent from the LLC to act as its registered agent.
- Be at least 18 years old.
- Provide a valid physical street address in Iowa (P.O. Boxes are not sufficient).
- Ensure you can reliably receive and forward legal and official documents to the LLC.
Note that these requirements can vary over time, so it’s essential to check the latest information from the Iowa Secretary of State or legal authorities.
#4 Obtain the nine-digit EIN from the IRS
For the next step, you need to apply for your Federal Employer Identification Number(EIN) with the Internal Revenue Service(IRS). You use your EIN to keep track of your business tax reporting and to identify your LLC for taxation purposes. You can think of it like a Social Security Number(SSN) for your company.
The main purpose of an EIN is to assist with the following purposes:
- Hire employees/managers/officers
- Apply for business licenses and permits
- Conduct daily business operations
- Meeting federal and state tax obligations
- Opening professional business bank accounts
- You can get your EIN simply by applying online or by downloading the form and then sending it by mail or in-person to the address mentioned below:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
The filing process is completely free.
#5 Prepare and file a Certificate of Organization from the Secretary of State
To formally register your LLC with the Iowa Secretary of State, you need to file your Certificate of Organization document.
Here’s what you need to mention in your form,
- The name and business address of your LLC.
- Name, address, and contact details of your LLC’s registered agent
- Names, addresses, and contact details of all LLC’s organizers
- Duration of LLC (if not perpetual)
- The management structure: member-managed or manager-managed
- Management information
- Names and addresses of initial managers (if Manager-managed) or initial members (if Member-managed)
- Will the members/owners be liable for debts
- Effective date
- Filing Fee
- Any additional provisions like ownership percentages or voting rights.
- Signature of LLC’s organizer.
You have the option to file online, by mail, or through fax. If you’re submitting a hard copy of your form, you need to file your own Certificate of Organization following the guidelines set by Iowa state statutes. Note that in this particular US state, you need to create your very own Certificate of Organization document(by following these instructions), as the state of Iowa does not have a standard Certificate of Organization to file by mail or fax.
You can send in your drafted form to the address mentioned below:
Lucas State Office Building
321 E 12th St
Des Moines, IA 50319
Fax: (515) 242-5953
Also, if you’re planning to file online, you need to submit the form with Iowa Fast Track Filing. After logging in, simply click on “File A Document” located in the top menu.
The filing fee is $250 and is nonrefundable.
#6 Draft an Operating Agreement
An operating agreement is a legal document that will outline your Iowa LLC’s internal and external activities and management structure. It also defines the roles, rights, and responsibilities of its members/owners. Even though it isn’t a legal requirement, it’s still a good practice to have one in place.
A basic operating agreement can include the following information,
- Name and main address of the LLC
- How long the LLC will exist
- Name and address of the registered agent
- Details about the Articles of Organization
- The main purpose of your LLC
- Members/owners and their shares/contribution
- Allocation of profits and losses.
- The whole process outlines how new members will join, and old members will leave
- Meetings and Voting Rights
- How the LLC is run
- Dissolution and Winding Up
- Indemnification and liability clauses
- Dissolution and winding up
A well-mapped-out agreement is important for many reasons, like member voting rights and the LLC’s dissolution. It is also helpful during member conflicts and clarifying financial responsibilities. Also, in case of a lawsuit, if your LLC doesn’t have an agreement, then the courts will make decisions on the basis of state laws and regulations, which may or may not align with what’s best for your LLC.
#7 Submit a Statement of Information/ Biennial Report
In Iowa, you’re required to file a Biennial Report with the state authorities every second year. You can do it online for $30 or send it by mail for $45. On the Fast Track Filing portal, you can choose whether you wish to file the report online or prefer to print a paper form.
These reports are due every odd-numbered year by March 31. The Secretary of State will remind you/send notifications before each due date. While Iowa doesn’t fine or penalize you if you miss your deadlines, there’s always a risk of your LLC being dissolved after a few months for failure to submit your report.
After forming your Iowa LLC, don’t relax just yet but focus on maintaining your business and properly complying with the state authorities.
To maintain and properly run your Colorado LLC, follow these steps:
- Get necessary permits and licenses, like health or zoning permits and pro licenses.
- Register with the state’s tax agency.
- Open a professional business bank account.
- Get a company credit card.
- Buy business insurance.
- Protect your name and logo with a trademark.
If you’re looking to hire workers for your Iowa LLC, make sure to stay within the legal guidelines by taking these actions:
- Confirm eligibility of new employees, whether or not they can work in the US.
- Report newly hired employees to the state as required.
- Offer workers’ compensation insurance.
- Deduct and manage employee taxes appropriately.
- Display workplace compliance posters visibly in your workspace.
For any more information on the same, you can check the Iowa WorkForce Development website.
And that’s a wrap! That was how you can form an LLC in the Hawkeye State!
Frequently Asked Questions
An Iowa LLC is a legal business structure that combines the flexibility of a partnership or sole proprietorship with the limited liability protection of a corporation. It shields your personal assets from business liabilities.
The filing fee for Articles of Organization is a set amount, but other costs might include legal fees for drafting documents or any required licenses or permits.
An Operating Agreement outlines the ownership and operating procedures of your LLC. While not required by law, it’s highly recommended, especially for multi-member LLCs.
Yes, you’ll need to file a Biennial Report every two years and pay a fee to keep your LLC in good standing.
Online filings are typically processed within a few business days, while paper filings might take longer.