State Processing Times and Fees
Each state has standard processing times, but not every state has expedited times for filing a corporation. You should look for the average wait times for both standard and expedited filings, because they change periodically.
Iowa charges a filing fee for incorporating. Visit “compare pricing” in our incorporation center to see all state fees for Iowa.
Deciding Between an Iowa S Corp and a C Corp Tax Designation
There are similarities between an Iowa S Corp and a C Corp regarding liability, structure, management and compliance. The differences in Iowa come down to the following:
- Ownership Rules: A C Corp is taxed as a separate entity from its shareholders. It pays corporate taxes on its profits, and its shareholders do not. However, its shareholders do have to report and pay income taxes on what the corporation pays them. S Corps are “pass-through” tax entities. They pay no taxes at the corporate level, but shareholders do pay income tax on their shares of the corporation’s profits.
- Documents: If you decide to incorporate as an S Corp, make the election with the IRS by filing IRS Form 2553, Election by a Small Business Corporation. Get all your shareholders to sign it and then file it within two months and 15 days after the start of your corporation’s first tax year.
Each state has its own personnel requirements for corporations. In Iowa, you must comply with the following rules:
- Age requirement: Directors need to be at least 18 years of age.
- Number of directors: A minimum of one director.
- Residency: There is no requirement that directors live in Iowa.
Other Requirements for Your Articles of Incorporation
In addition to personnel requirements, you must include the following in your Iowa Articles of Incorporation:
You must appoint a registered agent. A registered agent is a person or business designated by you to receive important tax, government and legal documents for your corporation, including service of process of lawsuits. The agent needs to be available during normal business hours. Iowa requires that you include the name of your registered agent in your Articles of Incorporation, and that the agent have a physical address in the state of Iowa. We can help you designate your registered agent when you incorporate with us.
You must also include the below in your Articles of Incorporation in Iowa:
- The name and address of each incorporator.
- The names and addresses of the initial directors.
- The number of shares to be issued and the designation of each class.
- The par value for authorized shares.
Other Required Paperwork
Iowa requires the filing of additional paperwork along with your Articles of Incorporation, which includes filing a biennial report that is due between Jan. 1 and April 1 of the first even-numbered year after the calendar year of your incorporation. Failure to file the report can jeopardize your corporation's status.
Guidelines for Your Name
Your corporate name should be unique and make a statement about your business. Make sure it complies with the following Iowa requirements:
- Your corporate name should be distinguishable from that of any other registered business in Iowa and end with “Company,” “Corporation,” “Corp.,” “Incorporated,” or an abbreviation of one of these terms.
- Your name cannot be deceptive. If you're selling cookies, don't name your company "Emilie’s Hardware."
- Make sure your name is distinguishable from all other existing corporate names.
Iowa Corporate Taxes & Reports
Unfortunately, your new corporation does have to pay taxes. Before getting started, however, you have to apply for an employer identification number, or EIN, for IRS purposes. An EIN is similar to your Social Security number, but it's for a business. All corporations with employees need to have EINs. You will also need an EIN to open your corporate bank account.
Many business owners choose S Corps as they are generally exempt from corporate income tax and there is no double taxation. A C-Corp offers more flexibility, because you can have several classes of shareholders with different voting rights. However, electing a C-Corp may have additional tax implications.
Keeping Corporate Records and Ongoing Filing Requirements
Iowa requires that corporations create records to maintain their corporate status. Bylaws set forth your company’s operating rules and define your corporation’s structure. You don't have to file them with the state, but you'll have to provide them to banks, lending institutions, creditors, the IRS and courts to prove that your corporation is valid and legitimate. Bylaws also help establish rules so you can keep your corporate assets and debts separate from your personal ones.
Keeping minutes of your director and shareholder meetings is also mandated by the state of Iowa. Your minutes should be maintained at your corporate office with other records. The minutes keep track of all votes on your important business decisions and help to secure your corporate status.
Best of luck with your new Iowa corporation! We have all the legal documents, filing and tax information you'll need to get started.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.