How to Start an LLC in Iowa
Iowa Limited Liability companies (LLCs) provide business owners liability protection, tax advantages, and flexibility in their management structure. To officially start your Iowa LLC, you’ll need to file a Certificate of Organization with the Iowa Secretary of State, Business Services Division, and pay the $50 filing fee. But first, you must choose a name for your LLC and designate a registered agent. The process of starting your LLC could take anywhere from one day to three weeks, depending on how you file. Here, we’ll explain how to start an LLC in Iowa and get your LLC ready for business.
Ready to Start an LLC in Iowa?Get Started
Name Your LLC
Designate a Registered Agent
Submit LLC Certificate of Organization
Write an LLC Operating Agreement
Get an EIN
Open a Bank Account
Fund the LLC
File reports + taxes
1. Name Your LLC
Your first step in starting your LLC is giving it a name. Your LLC name has to meet Iowa’s LLC naming requirements, which are listed in Iowa Code § 489.108. Basically, you must choose a name for your LLC that:
- Includes the words “limited liability company,” “limited company,” or an abbreviation like “LLC.”
- Is different from any other active Iowa business name.
Already have a business name? Check to see if it’s available.
Can I reserve a business name in Iowa?
Yes. If you want to reserve your business name but aren’t ready to officially form your LLC, you can reserve a name for 120 days by submitting an Application of Reservation of Name to the Iowa Secretary of State and paying a $10 fee.
What’s the difference between my LLC’s name and an assumed business name?
Your LLC’s legal name is the one written on your Certificate of Organization. An assumed business name is any other name your LLC uses to do business. An assumed business name can also be called a fictitious business name or a doing business as name (DBA). Iowa LLCs that want to use a fictitious business name need to submit a Fictitious Name Resolution to the state, along with a $5 filing fee.
Considering using an assumed business name? Learn How to Get a DBA.
2. Designate a Registered Agent
Next, you need to appoint an Iowa registered agent for your business. Your registered agent is someone authorized to receive important legal mail and correspondence from the Iowa Secretary of State on behalf of your business. Your registered agent could be you, another individual, or a registered agent company. Iowa LLCs are required to maintain a registered agent—per Iowa Code § 489.113. You’ll need to include your registered agent’s name and address on your Certificate of Organization.
Learn why the pros use a registered agent service.
What does a registered agent do?
A registered agent can perform a range of services, but at the least, your registered agent must:
- Have a physical street address in Iowa (not a P.O. box).
- Maintain regular business hours.
- Accept legal mail (including lawsuits) on behalf of your business and forward it to you.
Can you be your own registered agent in Iowa?
Yes, you can be your own registered agent. You will have to share your name and address on the public record and be available during regular business hours to accept service of process in person.
Can I change my registered agent after I start an LLC?
Yes. To change your registered agent in Iowa, you just need to submit a Statement of Change of Registered Agent form with the Iowa Secretary of State. It’s free to change your registered agent in Iowa.
3. Submit LLC Certificate of Organization
To make your LLC official, you’ll need to submit a Certificate of Organization to the Iowa Secretary of State’s office. Unlike most states, Iowa doesn’t have an official Certificate of Organization form for you to fill out. Instead, you’ll need to draft the document yourself. You can submit your Certificate of Organization online, by mail, or in person with a $50 filing fee.
Note: All of the information on this form will become part of the public record.
You’ll need to provide the following information in the Certificate of Organization:
Company name: Must include “limited liability company,” “limited company,” or an abbreviation.
Registered agent: The person or business entity responsible for accepting legal mail on your company’s behalf.
Registered office: Must be a physical street address, not a P.O. box.
Optional provisions: If you want, you can include additional information, such as member/manager information or your business purpose.
Organizer: The name and signature of the person who completes your Certificate of Organization.
How can I keep my personal information off the public record?
Some business filings, including the Iowa Certificate of Organization, are public documents. This means that if you share your own personal information on these documents, that information could end up in the hands of marketers and data brokers.
The best way to maintain your privacy is to hire a registered agent service that will put its name and address on these forms so you don’t have to. That’s what we do.
What’s the difference between a member-managed and manager-managed LLC?
In a member-managed LLC, all members (owners) are involved in managing the day-to-day operations of the LLC. This is different from a manager-managed LLC, where the members hire managers to oversee the LLC’s operations. The people who manage your LLC will have the power to enter contracts, hire and fire employees, and open company bank accounts, among other things.
For help with deciding which management structure will work for you, see our page on LLC Member Vs Manager.
How do I file the Iowa Certificate of Organization?
You can file your Certificate of Organization online, by mail, or in person.
By mail or in person:
Secretary of State
Business Services Division
Lucas Building, 1st Floor
Des Moines, Iowa 50319
Iowa Fast Track Filing
What’s a Series LLC?
A Series LLC is a business that consists a parent LLC (or umbrella LLC) and one or more divisions within the parent LLC, called “series.” Each series has its own assets, interests, and liability protection. Business owners typically use the Series LLC structure to separate out assets. For example, a real estate investor might structure her business as a Series LLC, so that each of her properties is protected from the liability of the other properties.
Intrigued? Find out How to Start a Series LLC.
4. Write an LLC Operating Agreement
Your operating agreement is the document that puts the rules and procedures of your LLC into writing. It covers important matters like how much each member invested, how you will distribute profits, and even what you’ll do if—knock on wood—the business falls apart.
Does Iowa require an LLC to have an operating agreement?
No, an LLC isn’t required to have an operating agreement in Iowa. Iowa Code § 489.110 describes what an operating agreement may and may not include, but it doesn’t say that an operating agreement is mandatory.
However, it is in your business’s best interest to adopt an operating agreement. To begin with, you’ll need one to open a business bank account. You won’t need to file your operating agreement with the Iowa Secretary of State, since it is considered an internal document. But if you don’t have one, your LLC will have to follow Iowa’s default LLC laws.
What should be included in an operating agreement?
Ideally, your operating agreement will plan for every important situation your LLC might face. This includes things like voting, allocating profits and losses, and settling disputes. Here are some topics that almost all LLC operating agreements cover:
- initial investments
- profits, losses, and distributions
- voting rights, decision-making powers, and management
- transfer of membership interest
- dissolving the business
Iowa law puts some restrictions on what rules operating agreements may include. For example, your operating agreement can’t change your LLC’s ability to sue and be sued. But for the most part, you may include anything in your operating agreement that isn’t contrary to your Certificate of Organization or state law.
Does a single-member LLC need an operating agreement?
Yes. Operating agreements are extremely important for single-member LLCs. Your operating agreement could be crucial to helping you maintain your LLC’s limited liability in the case of a lawsuit. Also, single-member LLCs almost always need an operating agreement to open a business bank account.
5. Get an EIN
An EIN (employer identification number) is similar to a social security number, but for businesses rather than individuals. The IRS will use your EIN to identify your business on tax forms. You can get an EIN directly from the IRS for free, either online or via the mail. It’s faster to apply online, but you’ll need to mail the paper form if you don’t have a social security number.
Do I need an EIN for my Iowa LLC?
Yes. While you are only legally required to have an EIN if your business has employees or is taxed as a corporation, nearly every bank requires an EIN to open a business bank account. Having an EIN will also protect you from having to give out your social security number to business associates.
Suffering from Form Fatigue? Hire us to form your LLC!
What To Do After Forming Your Iowa LLC
6. Open a Bank Account
Now that you have an EIN, you can complete the important step of opening a business bank account. Why is this important? An LLC has limited liability because it is considered a legally separate entity from its owners. However, if you mix business and personal money, a court could find that your business is not truly a separate entity, and you could be held personally liable for damages.
Here’s what you need to bring when you open your business bank account:
- Iowa LLC Certificate of Organization (a copy is fine)
- the LLC’s operating agreement
- the LLC’s EIN
- an LLC Resolution to Open a Bank Account (if your LLC has more than one member).
If your LLC has more than one member, use our free LLC Resolution to Open a Bank Account.
7. Fund the LLC
The next step is for your members to each make an initial investment in your LLC. Usually, they do this by writing checks to your LLC’s bank account. However, you could allow your members to invest in the form of property or services to your LLC. Keep in mind that if investments of property or services are made, this will likely cause a tax event.
What is LLC membership interest?
Membership interest is each member’s percentage of ownership of the LLC. In most cases, membership interest directly correlates to each member’s initial investment. For example, if one member invested $6,000, and four other members invested $1,000 each, the first member would have 60% membership interest in the LLC, and the other four members would each have 10% interest. Membership interest also frequently correlates to voting power. So in this example, the member with a membership interest of 60% would have decision-making power in the LLC (unless another arrangement is made in the operating agreement).
8. File State Reports & Taxes
In Iowa, you are required to file a biennial report every two years. The purpose of the biennial report is to update the state on your business’s contact information and let them know if your LLC has changed owners. The Iowa biennial report filing fee is $60.
Tired of paperwork? Let us file your Biennial Report for you.
When is the Iowa Biennial Report due?
Are you ready for a riddle? The biennial report is due between January 1st and April 1st of the first odd-numbered year after the year when the LLC was formed.
So if you formed your LLC in May 2021, your first biennial report would be due April 1st, 2023. If you formed your LLC in May 2022, your biennial report would also be due April 21st, 2023.
How are Iowa LLCs taxed?
Iowa LLCs are subject to pass-through taxation by default. This means that the business itself is not taxed. Rather, the profits “pass through” the business to the owners, who report the profits as income on their individual tax returns. Iowa LLC profits are subject to the federal self-employment income tax rate. Iowa LLCs can also elect to be taxed as an S-Corp or C-Corp.
Learn more about S-Corp Vs LLC tax designation.