Having an LLC in Iowa is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in Iowa.
On this page, you’ll learn about the following:
- How to Start an LLC in Iowa
- After Starting your Iowa LLC
- Iowa Foreign LLC
- Why LLC in Iowa
- Best Businesses in Iowa
- Iowa LLC Formation Review
How to Start an LLC in Iowa
An LLC or a 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. This section gives you a step-by-step guide on how to start an LLC in Iowa.
Step 1: Decide a Name for Your LLC
Deciding on a business name is the first step to start an LLC. In Iowa, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the Iowa business naming requirements. Once you pass through them, you can successfully name your business.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
- You can only get the EIN number when you have your name registration certificate with you.
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, Iowa. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in Iowa. The cost of a name reservation is $10.
Important Quick Links:
Secretary of State
Business Services Division Lucas Building, 1st Floor
Des Moines, Iowa 50319
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Step 2: Assign a Registered Agent in Iowa
A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will do things like filing services and receive significant legal forms, formation documents, a notice of lawsuits, and other official government correspondence in Iowa. Choosing an Iowa registered agent service for your LLC is required.
Make sure your registered agents are residents of Iowa. It could also be a business. Here are the recommended agents and employees for you:
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Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Iowa. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Certificate of Organization in Iowa
A Certificate of Name Reservation is needed to file a Certificate of Organization, as other states call it. You need to make reports of this certificate with the Iowa Secretary of State, which costs $50. LLC cost in Iowa includes biennial report and sales tax along with filing cost. You may file them online or by mail.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Iowa LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county. To know more about online filing, visit the Iowa Certificate of Formation.
How to File by Mail
If you prefer filing real-life forms for your Iowa LLC registration, then you can download the Iowa Limited Company Certificate of Organization requirements. Read the form thoroughly. It will have to fill, among others, your name, city, state, zip code, and signature. You may also file in person by visiting the office on business days.
Mail To: Lucas State Office Building
321 E 12th St
Des Moines, IA 50319
Fax: (515) 242-5953
Step 4: Create Your Iowa LLC Operating Agreement
An operating agreement is an internal 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 LLC operating agreement Iowa does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve Iowa LLC later.
Step 5: Filing an Iowa LLC EIN
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 types of business for tax purposes and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
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.
And that’s all! Congratulation, you are now done with all the necessary steps to form your Iowa LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
After Starting your Iowa LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Iowa business permits & licenses
- Get liability for business and professional liability insurance with coverage for employees
- File a Iowa LLC annual report or biennial report
- Already existing LLCs that wish to operate in Iowa must register as Iowa foreign LLC.
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.
Iowa Foreign LLC
To register an Iowa foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, Iowa. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check Iowa Foreign LLC to know more about having a foreign LLC.
Why 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, 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.
Best Businesses in Iowa
When an entrepreneur wants to Start an LLC in Iowa, then you should know the best business industries of Iowa. There are some specific businesses to which the state is providing an excellent environment. The list of businesses is mentioned below in detail.
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 is due to the quality. That is why the manufacturing and conversion of raw material of 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.
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.
To recap, here are the simple 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. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- 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.
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.
Apart from the formation fee of $50 (domestic LLC) and $100 (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.
It takes no time (immediate) to get an LLC in Iowa if you file it online. For the mail filing, it takes up to 14 business days to get an LLC.
Every year all the LLC 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.
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.
Having an LLC is easier than other forms of business. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. On the other side, the formation of LLCs requires less paperwork and fewer legal complexities. If you have any questions, leave a comment below.