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Recurring costs - Biennial Report fee $45 online, $60 by mail
Filing Time - It normally takes less than 2 weeks for the LLC to be filed with the state.
Don’t want to form an LLC by yourself? - Let IncFile guide you through the LLC formation process so you know everything was done right. Only pay state fees!
The Limited Liability Company (LLC) is a popular business entity choice structure for many businesses starting in Iowa. The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in Iowa without an attorney.
Unlike a sole proprietorship or partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting for the business owner’s personal assets.
Related: How Does an LLC Protect You?
Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration and management flexibility.
The LLC filing fee is $50 and approval typically takes 24 hours when filing online and around one week when filing by mail.
How to Form an LLC in Iowa
Unlike most states, the State of Iowa does not provide a document to form the LLC. In order to file the LLC with the Secretary of State, you will need to create a Certificate of Organization. The State provides statutory requirements of what needs to be in the Certificate of Organization in state statutes Chapter 489, Section 201.
Below we have information of what information is needed to create your own Certificate of Organization.
1. LLC Name
In Iowa, each registered LLC must have a unique name, nor be confusingly similar. Here, you can check on available Iowa LLC names before filing.
Next, every LLC must include one of the following designators at the end of the business name:
Limited Liability Company
Limited Liability Co.
Ltd. Liability Company
Ltd. Liability Co.
A comma may be used after the business name and before the designator. “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.
Before finalizing a name, you may also want to see if a domain name is also available to have a matching website address.
2. Initial Registered Office Address
The initial registered office address can be the physical address of the business or the address where the business records are stored. A P.O. Box may not be used.
3. Registered Agent
To have an LLC in Iowa, a Registered Agent must be identified. The registered agent can either be a resident of Iowa or a registered agent service. The agent must have a physical address in the state to act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc on behalf of the LLC.
Even though the business owner can be the registered agent, their name and address become public record and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home.
4. Effective Date (optional)
If you want to file the LLC, but not want it to start until a date in the future, you can add a section stating the effective date of the LLC. By default, the LLC is effective on the date submitted. If you prefer to have the LLC officially start at a later date (up to 90 days), enter that date and time in these fields.
Review the information and the LLC organizer (could be a member, attorney or individual helping form the LLC) will sign and date the Certificate of Organization.
6. Pay and Send
The next step is to send in the Certificate of Organization.
Prepare a check or money order made out to “Iowa Secretary of State” and mail to
Secretary of State
Lucas Building, 1st Floor
321 E. 12th Street
Des Moines, IA 50319
Scan the completed Certificate of Organization, upload to the Secretary of State and pay via credit card – https://sos.iowa.gov/file/origination/index.aspx
Download the Credit Card Authorization Form – https://sos.iowa.gov/business/pdf/CCAUTH2.pdf
Then fax the completed Certificate of Organization and Credit Card Authorization Form to the Secretary of State at 515-242-5953.
Companies like IncFile and IncAuthority help guide you to make sure it’s done right and you only pay the normal state fees.
Check out our reviews of popular LLC formation services to learn more.
Tasks After Forming Your LLC
Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.
Prepare an Operating Agreement
The operating agreement is a document that governs the framework of an LLC. This document covers items like ownership rights, member responsibilities, how profits and losses are distributed and more.
Most states do not require an LLC to have an operating agreement but it is still worth considering. Without an operating agreement:
- The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit
- Member’s personal liability protection may be diminished
- Members may not have a full understanding of their roles and responsibilities which could lead to costly disputes in the future
Related: Iowa operating agreement template
Obtain an EIN
The EIN or Employer Identification Number is a unique 9-digit number for a business. Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.
The EIN will be needed in order to open a bank account, register for business licenses and permits, file tax returns, pay payroll taxes and more.
Related: How to Apply for an EIN
Open an LLC Bank Account
Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.
Several documents will be needed to open a business bank account such as:
- A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
- Copies of the original formation paperwork from the state showing the creation of the LLC.
- Driver’s licenses of the members.
- Depending on the age of the LLC, a Iowa Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.
Apply for Business Licenses and Permits
Depending on what your business does and where it is located, there will likely be a variety of business licenses and permits to register for before starting. Some common registrations include:
- Business License – Some cities require businesses to obtain licensing before they can start. In some cases, even home-based businesses must have licensing in order to legally operate.
- Professional License – Certain services such as barbershops, accountants, salons and others must be licensed.
- Business Tax Permit – In order to sell products and certain services, registration with the Iowa Department of Revenue will be necessary.
File the Biennial Report
LLCs are required to file an annual report with the Iowa Secretary of State. The annual report updates ownership information and other details.