How to start an Iowa corporation

It might seem like a lot at first, but once you understand the steps, it’s very doable. This guide will walk you through everything you need to know to start your Iowa corporation.

How to start a corporation in Iowa

Incorporating means registering your business as a corporation so the law sees it as its own entity, separate from you. Each state has its own rules for how to do this, so the process can seem confusing. Let’s go through each step: 

1. Choose a name for your Iowa corporation

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following Iowa requirements:

• Your business name should 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 business names.

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

2. Decide between an Iowa S-Corp and C-Corp tax designation

There are similarities between an Iowa S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences, however, 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.

3. Appoint directors and shareholders for your Iowa corporation

Each state has its own personnel requirements for incorporating. In Iowa, directors need to be at least 18 years of age and there is a required minimum of one director. There is no requirement that directors live in Iowa.

State the number of your corporation's directors in either your Bylaws or your business's Articles of Incorporation. 

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have an Iowa address) or choose one to do that service for you (if you are not located in Iowa or would like an extra layer of privacy).

5. File your Articles of Incorporation with the state of Iowa

Once you have a business name and registered agent, you can register your business as an Iowa corporation with the state by filing your Articles of Incorporation. This document may be referred to informally as a corporation's "Articles," or in other states, it may be called a "Certificate of Organization," "Certificate of Filing," or "Certificate of Formation."

Iowa requires the filing of additional paperwork along with your Articles of Incorporation, which includes filing a biennial report that is due between January 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.

6. Get an Employer Identification Number (EIN)

Before opening your doors for business, apply to the IRS for an employer identification number, or EIN. All corporations with employees in Iowa must have an EIN. An EIN is similar to your Social Security number, but it's for businesses. You'll also need an EIN to open your corporate bank account.

Congratulations! After you have completed all these steps, you have formed your Iowa corporation.

What to do after incorporating in Iowa

Iowa requires that corporations create records to maintain their corporate status. Corporate 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 Corporate 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.

We have more detailed information regarding Iowa's requirements for Bylaws and keeping Corporate Meeting Minutes. 

Still have questions? Learn more about how to start your own business with Rocket Lawyer and get started today!
 

Key takeaways Starting a corporation in Iowa means following state rules, like choosing a unique name, filling out paperwork, and paying fees to make it official. One important choice is deciding how your corporation will be taxed in Iowa, either as an S-Corp or a C-Corp. This affects how the business and owners pay taxes, and the differences between the two change from state to state. After forming the corporation, you have to keep records like bylaws and meeting notes to stay in good standing with the state and prove your business is real and operating correctly.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a corporation?
• What is an S-corporation?
• How are corporations taxed?
• How to start a corporation
• How to register a corporation by state