How to start an Iowa LLC

An LLC is a type of business that helps protect its owners (called members). This means that if the business owes money or gets sued, the members' personal assets, like their house or car, are usually safe. 

In the state of Iowa, an LLC is defined as “an entity formed under [the Uniform Limited Liability Company Act]” (Iowa Revised Uniform Limited Liability Company Act, section 489.102). That means an LLC in Iowa is a company created within the state or a company that becomes subject to Iowa's state regulations surrounding LLCs.

If that sounds like a lot of legal jargon - that's because it is! What you need to know is that LLCs are popular with business owners because they are simple and flexible to run. They have fewer rules compared to comportations and the owners can choose if they want to manage the business themselves or appoint managers to do it. 

Another benefit is how taxes work: LLC owners can pay taxes through their own personal tax returns, or they can choose to have the business pay taxes separately, like a corporation. This gives owners more choices in how they handle taxes as their business grows.

Why should I register for an LLC in Iowa?

You may want to register for an LLC in Iowa when:

• You own or want to start a business in Iowa, or want to expand an existing business into Iowa, and want to stay legally compliant. 
• You own or want to start a business, and want more flexibility on how you will manage the business or pay taxes than a corporation would provide.
• You want to protect your personal assets from potential liability resulting from business you conduct in the state of Iowa. 
• You own or want to start a business, and want to register in Iowa to open accounts, lease or buy property, secure funding, or hire employees.

Do I need to file my LLC in Iowa if I live in another state?

Any LLC that does business in Iowa must file with the State of Iowa. LLCs based in Iowa are called "domestic LLCs," and out-of-state LLCs are called "foreign LLCs." If your LLC was organized and operates outside of Iowa, establishing a foreign LLC within Iowa will allow for you to conduct business there.

Foreign LLCs and domestic LLCs may have different filing and compliance requirements -- Rocket Lawyer can help you navigate foreign LLC registration, regardless of where you live.

How to start an LLC in Iowa

1. Find a unique name for your Iowa LLC

The state of Iowa requires that the names of all LLCs in the state:

• Include the term "LLC" or "Limited Liability Company," also known as an "entity designator." 
• "L.L.C." and the abbreviations "Ltd." and "Co." are acceptable.
• Are not too similar to existing LLCs in the state.

Rocket Lawyer can help you determine whether your business' name is eligible for registration in Iowa and may be able to help you reserve the name before you file your LLC.

2. Include your other LLC members (if any)

In Iowa, you can in fact form as a one-person LLC. You can also have other members of your LLC (employees or co-owners) that you don't have to include in your LLC filing, though down the road, you may want to think about completing an LLC Operating Agreement.

If you choose to include other members of your LLC in your state filing, they don't need to be in Iowa.

3. Provide an Iowa address

This will be used as your official LLC address. The address that you list may either be your home, an office, or another physical location, but it cannot be a PO box.

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 a 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. Register your LLC with the state of Iowa

Once you have a business name and registered agent, you can register your business as a Iowa LLC with the Iowa Secretary of State by filing your Certificate of Organization. In other states, this document may be called a "Certificate of Formation," "Certificate of Filing," or "Articles of Organization."

6. Get an Employer Identification Number (EIN)

Iowa LLCs are required to have a Federal EIN tax number. Think of your tax ID as the social security number for your company. It will be important for business contracts, tax filings, and all manner of documents down the line. Every company should have one to remain in good standing.

7. Pay the state filing fee

Every state has different fees for forming an LLC, which can also vary from one year to another.

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

What to do after forming an Iowa LLC

There are a few steps you need to take to maintain your Iowa LLC:

1. Create an Operating Agreement: we can help you create your Iowa LLC Operating Agreement online.
2. Hold a meeting: a first meeting with members of an LLC is not required by law, but it is highly suggested in order to get organized. Also, unlike corporations, LLCs are also not required to maintain Meeting Minutes, but these documents are also recommended as they provide records for important decisions made.
3. Pay taxes according to how you chose to be taxed: traditionally, LLCs are "pass-through entities." This means that you pay your business taxes on your personal tax form. That said, you can elect to be taxed like a corporation, if you choose to do so.
4. File a Biennial Report: this is required every two years for all LLCs registered in the state. This report is due on April 1st of odd numbered years along with a filing fee.

What is needed to keep records for my Iowa LLC

Iowa does not specify certain records that need to be kept. But it is advised to keep thorough records of your LLC because the State of Iowa requires that all LLCs grant access to its members any documents regarding business activities, financial conditions, and any other information as stated in the LLC's Operating Agreement.

Still have questions? Rocket Lawyer can help you with the process of forming an Iowa LLC. Get started today!

  

Key takeaways Registering an LLC in Iowa can give you a lot more flexibility than a corporation, as well as protection for your personal assets from potential liabilities. Even if you live in another state, you must register your LLC in Iowa if you do regular business there, like selling things or having employees. After starting your LLC, it's advisable to create an Operating Agreement and hold a first meeting. You will also need to file a Biennial Report. Keep records of your Iowa LLC, like the names of all members, tax documents, and your business rules. These help you stay organized and follow the law.

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 an LLC
• How are LLCs taxed
• How to start an LLC
• Do I Need a Registered Agent?
• How and when to file an Annual Report