How To Start An LLC In Iowa 2023?
Starting an Iowa LLC may allow you as an individual or business entity[1] to enjoy new tax benefits, get better deals on a business credit card, and protect your personal assets, among other benefits.
However, the LLC formation process can be complicated. From choosing a valid business name to filing operating agreements and ensuring you’re prepared for Iowa business taxes, there’s a lot to do.
That’s why we’ve put together this guide. It offers step-by-step instructions for creating a limited liability company that complies with the Iowa Secretary of State and Internal Revenue Service. Keep reading to learn more.
6 Basic Steps To Start an LLC In Iowa 2023
- Choose a name for your LLC
- Choose a registered agent
- File articles of organization
- Create an LLC operating agreement
- Obtain an EIN
- Annual Tax
How To Start An LLC In Iowa?
Whether you want to start an LLC with just you or you have more than one member, these are the steps that you’ll need to follow to do so in a way that complies with the state’s fast-track filing system.
Choose A Name for Your LLC in Iowa
The first thing that you need is a business name. As you’re choosing the LLC name, keep the following sub-points in mind.
Naming Rules In Iowa
There are some special rules to choosing a business name in Iowa. The main thing of note is that your business name must have some variation of LLC in it.
Searching Available Name in Iowa
You need to make sure that no other company has used your desired name[2] to file a certificate of organization or operating agreement in the state before you proceed.
Choose A Registered Agent in Iowa
Next, you’re going to need a registered agent (also called a statutory agent). This person goes on file with the state’s office to accept whatever important internal document you get, such as the service of process or correspondence related to business debts.
There are plenty of registered agent services to choose from in the state. These charge a small fee in exchange for taking on this role for your organization online. But you can also be your own statutory agent if you don’t mind doing it yourself and wish to save some money.
File Organizational Paperwork With the State
Next up is filing your certificate of organization with the state. This document, along with your Iowa LLC operating agreement, provides key information about your company, what it does, and how it’s structured to the state.
Prepare An LLC Operating Agreement
Filling out and filing your operating agreements comes next. You will need to pay your filing fee when submitting these. An operating agreement outlines your company’s management structure and financial decision-making process. The operating agreement and certificate of the organization make up the bulk of your LLC file.
Obtain An EIN for Your LLC in Iowa
The next thing you need is an employer identification number. Your IRS employer identification number is what allows you to do things like open up a business bank account and hire employees. You may have to pay a small filing fee to get this.
Annual Tax
Finally, all that’s left to do is make sure you comply with your ongoing taxation and biennial report requirements. Having a separate business bank account will make this a lot easier for you to do.
It’s also worth noting that if you choose to use an Iowa registered agent service free or paid, you may be able to get some help with ongoing compliance requirements like this.
What Is An LLC?
Let’s start with the basics. The acronym LLC is short for limited liability company. It’s a kind of tax structure that you can use to conduct business.
As a business owner, there are several benefits to creating an Iowa LLC today, that may be worth looking into if you’re interested in liability protection and unique kinds of assistance under Iowa law.
What Is An LLC In Iowa?
Iowa LLCs are just LLCs that have been formed in this state based on the framework created by the Iowa Secretary of State. LLC owners who plan on primarily doing business in Iowa will want to hold their limited liability companies here to ensure they get access to as many benefits as possible.
One thing to note about this process is that you need a registered agent service designated in whatever state your LLC is headquartered in. And your registered agent service needs to have a registered office address in that state. So it’s easiest to form a limited liability company[3] with the Iowa Secretary of State if this will be your primary state business services division.
Benefits Of Starting An LLC In Iowa
Starting an Iowa LLC can be better than running a sole proprietorship for several different reasons.
First, Iowa LLCs have a better tax situation. If you want to save money when hiring employees, paying federal taxes, and for other business transactions, then business entities that are formed as member-managed LLCs may have the upper hand.
Also, with an LLC, your business assets are separate from your personal assets. This means you have personal liability protection in the event of future financial difficulty. It ensures that your own funds don’t become subject to seizure in the event of a business failure.
Finally, both a foreign LLC and a domestic LLC will have greater flexibility after filing an operating agreement and certificate of organization to become a foreign LLC or domestic LLC. This can be beneficial for things like profit sharing and management.
Requirements To Start An LLC in Iowa
You’ll need to satisfy a few requirements when filing for an Iowa LLC certificate of organization and associated business licenses. Here are the two big ones to keep in mind while filling out your LLC’s operating agreement.
Appoint A Registered Agent
First, you need to have a registered agent. They’ll act as your principal office mailing address for legal documents like the service of process. You need to have this street address on file to ensure the Iowa Secretary of State and every other government agency can connect with your company easily.
Note: you do have the option of becoming your own registered agent instead of hiring professional services if you’re okay with being the business entity responsible for this and wish to save money for your small businesses.
The LLC’s Name Must Be Different From an Existing Business
As we already mentioned before, you can’t have the same LLC name as any other official company in the state. The operating agreement and certificate of organization for your Iowa limited liability company need to show unique needs, according to Iowa LLC naming guidelines of the Iowa Department of State and Iowa Secretary of State.
How Much Does An LLC Cost In Iowa?
It only costs $50 to file your operating agreement and certificate of organization paperwork with the Iowa Secretary of State. However, there are other fees[4] to be aware of.
For example, you will need to file an Iowa biennial report every other year. Each biennial report that you file will cost another $30-$45, depending on whether you pay the online filing fee or file by mail.
You may also pay a one-time fee if you use a formation service to start your new company. You may have to pay to obtain business licenses that allow you to open a business checking account and collect sales tax through standard business law as other business entities, single-member LLCs, and manager-managed LLC companies do.
Top 2 LLC Services in Iowa
| Product | ||
| Name | ZenBusiness | Northwest Registered Agent |
| Full review | Read full review | Read full review |
| Link | Check Price | Check Price |
ZenBusiness
ZenBusiness may be worth taking a look at for your business as well. It stands out by offering after-hours customer support from some of the most helpful representatives in the business.
Another nice feature of ZenBusiness is that the company provides ongoing assistance with accounting, taxation, business advice, and other compliance services. Like Northwest, they also consistently receive high ratings from customers.
ZenBusiness will also create your LLC for free, as long as you purchase another package from them, such as a year of statutory agent service. If you were planning on buying that type of service anyway, then you may as well do so at the same time as starting your LLC to save money – whether you decide to go with ZenBusiness, Northwest, or another provider in the state.
Northwest Registered Agent
Northwest stands out with its commitment to offering high-quality services at affordable prices. They can help you get your LLC started faster than many other services and will do so at a price point that won’t break your budget.
Plus, this company offers several other compliance services, such as support from statutory agents, that you may be interested in pursuing. You can often gain access to either these services or your LLC formation service for free if you pay for one or the other.
Northwest consistently receives strong reviews from customers, and it’s an option that most Iowa businesses will be happy with.
Final Thoughts
Starting an LLC is a smart decision if you’re a business that wants to benefit from better rules around taxation and asset protection. You may also get some nice flexibility around management and profit-sharing that could be advantageous.
You always have the option of starting your LLC on your own, but filling out and filing all of the paperwork can be a bit of a challenge. Hiring a service like Northwest or Zen Business may be a smart move to avoid these complications so that you can focus on running your company.
Whether you decide to launch an LLC in Iowa or not, we hope this guide has brought some value to your decision-making process.
This is a kind of business entity that you register with the state of Iowa. It offers advantages related to taxation and personal asset protection.
It costs $50 to file the initial paperwork to start the LLC formation process. But you will need to pay to file things like biennial reports every so often as well. These forms all cost under $50 to submit.
Generally, members of LLCs filing Partnership Returns pay self-employment tax on their share of partnership earnings. If the LLC is a corporation, normal corporate tax rules will apply to the LLC and it should file a Form 1120, U.S. Corporation Income Tax Return.