How to Start an LLC in Iowa
An LLC (Limited Liability Company) is a business structure that combines the benefits of limited liability and flexibility provided by a corporation, partnership, or sole proprietorship. If you're a business owner who wants to limit personal liability for business debts and legal matters, forming an LLC is a great option to consider.
To form an LLC in Iowa, you need to file a Certificate of Organization with the Iowa Secretary of State and pay a filing fee of $50. You can choose to apply online, by mail, or by fax. This document is the legal proof that your Iowa Limited Liability Company has been officially created.
If you want to get started with forming an LLC in Iowa, you can follow our step-by-step guide on "How to Start an LLC in Iowa" for more information.
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1. Select a Name for Your Iowa LLC
When naming your LLC in Iowa, there are two important guidelines to keep in mind. Firstly, the name of your LLC must not be too similar to the name of any other existing business registered with the Iowa Secretary of State. Additionally, your LLC's name must contain the phrases "Limited Liability Company", "L.L.C.", or "LLC", or their corresponding abbreviations, "Co." and "Ltd.", respectively.
Iowa LLC Business Name Reservation
To ensure that your chosen LLC name is not taken by another business entity, you may reserve it with the Iowa Secretary of State. First, confirm the name's availability using the Iowa SoS Business Entities Search tool. If the name is available, you can file an Application for Reservation of Name, either online or by mail, and reserve the name for up to 120 days for a fee of $10.
2. Appoint a registered agent in Iowa
Iowa, like many other states, requires new LLCs to appoint a registered agent as part of their formation process. Your Certificate of Organization must include the name and address of your registered agent.
The main role of a registered agent is to receive official correspondence from the Iowa Secretary of State and legal documents related to your business. In essence, if your business is served with a lawsuit or subpoena, the state of Iowa needs to know how to get the paperwork to your LLC's leadership.
In Iowa, a registered agent can be an individual or a business entity, as long as they have a registered office address within the state. This address cannot be a P.O. box, as legal documents are typically served in person. You must designate a physical address where the agent can receive important paperwork.
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3. Prepare and File Certificate of Organization
The Certificate of Organization is a crucial document that establishes your LLC by providing essential information about it.
To properly register your Iowa LLC, you need to prepare and file the Certificate of Organization with the Iowa Secretary of State. This might sound like a daunting task, but it simply involves filling out an online form or sending it by mail.
The certificate requires basic information such as:
- your LLC name
- name and address of your registered agent
- street and mailing address of the LLC's principal office, and
- mailing address for future correspondence.
You'll also need to sign the Certificate as the person forming the LLC. After filing, the secretary of state will review the Certificate, and if approved, your LLC becomes a legal business entity.
The state will then issue you a certificate that confirms your LLC's existence, which is essential for obtaining an Employer Identification Number (EIN), business licenses, and opening a business bank account.
4. Draft an Operating Agreement
While it is not required by law, it is highly recommended that all newly formed limited liability companies in Iowa draft a comprehensive LLC operating agreement. This operating agreement should accomplish the following:
- Outline the LLC's business structure.
- Establish the individual responsibilities and obligations of LLC members.
- Describe how the LLC will be managed.
5. Get an Employer Identification Number (EIN)
If you have a multi-member LLC, you are required to obtain an EIN for your business. This identification number may also be known as a Federal Tax Identification Number (FTIN) or Federal Employer Identification Number (FEIN).
Even if you have a single-member LLC without employees, it is recommended to get an EIN instead of using your Social Security number for security and privacy purposes. Obtaining an EIN is a simple and free process through the IRS website.
6. File Biennial Reports
Every two years, all LLCs conducting business in Iowa must submit a Biennial Report to the Secretary of State. You have the option of completing the report on the Secretary of State website or downloading a pre-filled form from the same site.
The report must be filed by March 31 of odd-numbered years. Prior to the report's due date, the Secretary of State should notify you. The online filing fee is $30, while the mail-in filing fee is $45.
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