Welcome to how to start an LLC in Iowa. In this guide we’re going to review how to start a Limited Liability Company that the Iowa Secretary of State recognizes as your individual or business entity.
Before we get into it, you can have some help with an LLC formation service like ZenBusiness. I recommend you start with them to get your LLC name, registered agent services and they’ll help your LLC’s operating agreement get setup too.
I also like to talk about what Iowa is known for and the business ideas that come from that. The top five business ideas I’d recommend you consider are:
- Start a Bread Business – Iowa is the birthplace of sliced bread
- Join the Iowa State Fair –
- Start a T-Shirt Company – Iowa is the Hawkeye state so get creative!
- Start a Farming Business – Focus it on Corn! Iowa is known for corn and I believe you can come up with something amazing!
- Start a Grotto of the Redemption Business – Yes – there is an amazing place to go see this
Alright – enough of the fun stuff – let’s get down to business and talk about your LLC name and the Iowa LLC naming guidelines you’ll need to follow.
Name Your Iowa LLC
The rules you’ll need to follow for this are:
- The name of your LLC must contain the phrase “Limited Liability Company” or the abbreviation “L.L.C.”
- Your LLC’s name cannot contain certain restricted terms without additional paperwork and a licensed individual, such as “bank”, “attorney”, “university” or “insured”.
- The name of your LLC cannot be the same as any other business entity already on file with the state of Iowa.
- You may reserve a name for 120 days by filing an Application for Name Reservation with the state.
My recommendation is to always go directly to the Iowa Secretary of State site that has the search portal to check it:
https://sos.iowa.gov/search/business/search.aspx
There are services that can ‘hold’ the name for you but if you just go over to ZenBusiness -they will be able to get it done for you extremely quickly. You are going to be a business entity responsible for making sure that the LLC owners understand this is their responsibility. If you’re going to be working with the state business services division and have to deal with the Internal Revenue Service, you’re going to need to make sure your LLC name is correct.
Once you’ve gotten your Iowa Secretary of State approved business name, then you’re going to need to go get the domain from GoDaddy and setup a website. If your LLC formation is going to be complete, you’ll need a digital version of your Iowa Limited Liability Company to conduct business on the internet too so make sure you’re capturing the website domain and have a website up and running too.
Even if you’re going to be forming a foreign LLC, you’re still going to need to do this for the Iowa Secretary of State’s office.
Once you’ve done this, you’ll need to move on to getting a registered agent or registered agent service that will help you with the legal pieces you may not want to handle on your own.
Choose your Iowa Registered Agent
All LLCs in Iowa must have a registered agent. The term “registered agent” refers to the business or individual designated to receive important legal documents on behalf of your LLC. This can be you, another member of your LLC, or an outside party such as a professional registered agent service.
The role of the registered agent is to receive and forward important legal documents, such as service of process (if your LLC is sued) and annual report forms.
You must list the name and address of your LLC’s registered agent in your Articles of Incorporation.
Your registered agent must have a physical street address in Iowa — P.O. boxes are not allowed. The registered agent must be available during normal business hours to receive and forward important legal documents.
You can act as your own registered agent, but we recommend using a professional service. Professional registered agents provide many benefits, including:
Reliability: You can count on a professional registered agent to be available during normal business hours to receive important legal documents on your behalf.
Privacy: A professional service can keep your personal information (name, address, phone number) private.
Compliance assistance: Professional registered agents will make sure you stay compliant with all annual filing requirements.
We recommend using ZenBusiness for your LLC’s registered agent service. When you form your business with them, they will include the first year of this service – so go there and get setup.
There are going to Iowa law firms who can help you with acting as an agent for you but Northwest has done this for so long – I’d just go directly with them.
Prepare and File Articles of Organization
The next step is to file your LLC’s Articles of Organization with the state. The Articles of Organization is a simple document that provides basic information about your LLC, such as the LLC’s name, address, and the names of its members.
To get started, download the Articles of Organization form from the Iowa Secretary of State website.
Fill out the form and include the following information:
The name of your LLC and whether it will use the “Limited Liability Company” or “LLC” designation.
The names and addresses of all organizers. An organizer is anyone who signs the Articles of Organization to form the LLC.
The registered agent’s name and address.
Whether your LLC will be member-managed or manager-managed.
The effective date of the Articles of Organization, if you want it to be later than the date of filing.
The signature of at least one organizer.
Attach a check or money order for the $50 filing fee made out to the “Iowa Secretary of State.”
Mail your completed Articles of Organization and filing fee to:
Secretary of State
Corporate Division
Lucas Building, 1st Floor
321 E. 12th Street
Des Moines, IA 50319
Once you’ve done this, you’ll need to get an operating agreement pulled together. I believe this is the most important legal document you’ll have IF you’re working with other LLC members in the business. Let’s get into it.
Create an operating agreement
All LLCs, regardless of size, should have an operating agreement. The operating agreement is an internal document that outlines the LLC’s ownership structure, member roles and responsibilities, and rules for running the business.
An LLC operating agreement is not required by Iowa law, but we highly recommend having one. If your LLC has more than one member, state law presumes that your LLC will be “member-managed.” This means that each member can participate in the day-to-day decision-making for the business.
If you would like a manager (or managers) to handle the day-to-day operations of your LLC, this must be stated in the operating agreement.
If you’re going to put any personal assets into the business up-front as ‘seed funds’ then I really think it’s important to clarify how funds are distributed or ownership of the company. If you’re going to setup a single member LLC, I still think it’s important to do this because at some point you may need to bring someone else on and it’s always good to have that documented in your Iowa LLC operating agreement.
The last thing you want is to have personal liability to anything related to operating agreements and wondering if you’ve documented everything correctly to conduct business with an Iowa LLC certificate. I would just make sure you get this done.
There are many different ways to structure an LLC’s ownership and management, so it’s important to discuss your options with the other members of your LLC before drafting the operating agreement.
Once you’ve decided on the ownership and management structure of your LLC, you can download a template operating agreement from the Iowa Secretary of State website.
If you’re not sure what to include in your operating agreement, we recommend hiring an experienced business attorney to help you draft the document.
Get an EIN
The next step is to obtain an IRS (EIN) from the IRS. An EIN is a nine-digit number that the IRS assigns to businesses for tax filing purposes. Having an Employer Identification Number is one of the most important things as a Limited Liability Company.
You can apply for an EIN online, by fax, or by mail.
To apply online, visit the IRS website and follow the instructions here:
To apply by fax, send a completed Form SS-4 to the fax number listed on the form.
To apply by mail, send a completed Form SS-4 to the address listed on the form.
Once you have obtained your EIN, you will need to provide it to your bank to open a bank account.
Open A Business Bank Account
It’s important to keep your personal and business finances separate, so you will need to open a business bank account. Your business assets are going to be in whatever online
When you go to open a bank account, you will need to provide the following documentation:
- Your business’s Employer Identification Number (EIN)
- Your business’s formation documents, such as the Articles of Organization or Certificate of Formation
- A government-issued photo ID, such as a driver’s license, passport, or state ID card
You will also need to decide on a business structure before you can open a business bank account. The most common business structures in Iowa are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.
Once you have decided on a business structure and gathered the required documentation, you can visit your local bank or credit union to open a business account.
When you open a business bank account, you will need to deposit money into the account to get it started. The amount of money you need to deposit will depend on the bank’s requirements.
Some banks may require that you open an account with a certain amount of money, while others may allow you to open an account with a smaller amount of money and then make a deposit later.
Once you have opened your business bank account, you will need to use it to pay for all of your business expenses. This includes things like inventory, supplies, rent, utilities, and employee salaries.
You will also need to keep track of all of your income and expenses so that you can prepare your tax return at the end of the year.
We recommend that you use accounting software, such as QuickBooks or FreshBooks, to track your income and expenses. This will make it easier for you to prepare your tax return and keep track of your finances.
Get Small Business Insurance
It’s important to get small business insurance to protect your business from liability. This includes things like property damage, personal injury, and professional liability.
You can get small business insurance through an insurance agent or broker. You can also get small business insurance online through a website like eHealthInsurance.
When you’re shopping for small business insurance, you will need to consider the following:
- The type of business you have
- The location of your business
- The number of employees you have
- Your annual revenue
You will also need to decide whether you want to buy a business liability insurance policy or a business owners policy (BOP).
A business liability insurance policy will protect your business from liability for things like property damage, personal injury, and professional liability.
A business owners policy (BOP) is a package policy that includes both property insurance and liability insurance. This type of policy is typically less expensive than buying a separate property insurance policy and a separate liability insurance policy.
Once you have decided on the type of insurance you need, you will need to shop around and compare prices. You can do this by getting quotes from different insurance companies. I recommend you look at commercialinsurance.net – they do a great job.
Get a Business License
You will need to get a business license before you can start operating your business.
The process for getting a business license varies from state to state. In most states, you will need to submit an application and pay a fee.
You can typically find the application for a business license on your state’s website.
File an Annual Report
Most states require businesses to file an annual report. This is a report that includes information about the ownership and financial status of your business.
The process for filing an annual report varies from state to state. In most states, you will need to submit an online form and pay a fee.
You can typically find the annual report form on your state’s website.
Pay Annual Taxes
You will need to think about Federal Taxes, collect sales tax, business tax structure, Iowa business taxes and of course how it all connects to your Federal Employer Identification Number so you can make sure the IRS is happy.
You’ll need to pay your annual taxes by filing it at:
The Department of Revenue’s Business Tax division
1110 Grand Ave.
Des Moines, IA 50309-2584
You will file and pay your annual taxes online at the Iowa Business Taxpayer Access Point (BTAP). To create an account, you will need to provide your business name, address, contact information, and Social Security number or Employer Identification Number.
You will also need to provide your bank account information so that the taxes can be withdrawn from your account.
The annual tax for a limited liability company in Iowa is $45. This tax is due on April 1st of each year.
FAQs
How much does it cost to start an LLC in Iowa?
The filing fee for creating an LLC in Iowa is $50. The annual tax for an LLC in Iowa is $45.
Do I need a business license to start an LLC in Iowa?
Yes, you will need to get a business license before you can start operating your business in Iowa.
Do I need to file an annual report for my LLC in Iowa?
Yes, most states require businesses to file an annual report. The process for filing an annual report varies from state to state. In most states, you will need to submit an online form and pay a fee.
What taxes will I need to pay for my LLC in Iowa?
You will need to pay Federal Taxes, collect sales tax, business tax structure, Iowa business taxes and of course how it all connects to your Federal EIN so you can make sure the IRS is happy. The annual tax for a limited liability company in Iowa is $45. This tax is due on April 1st of each year.
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