A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.
Here are the steps you need to take to form an LLC in Iowa. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.
Under Iowa law, an LLC name must contain as the last words, "Limited Liability Company," or the abbreviations "L.L.C." or "LLC." "Limited" may be abbreviated as "Ltd." and "Company" as "Co."
Your LLC’s name must be recognizably different from the names of other business entities already on file with the Iowa Secretary of State. Names may be checked for availability by searching the Iowa Secretary of State business name database. You may reserve a name for up to 120 days by filing an Application for Reservation of Name with the Secretary of State. The application may be filed online, or by mail. The filing fee is $10.
Every Iowa LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. A registered agent may be an individual who resides in Iowa, or a domestic or foreign business entity authorized to do business in Iowa. The registered agent must have a physical street address in Iowa.
An Iowa LLC is created by filing a Certificate of Organization with the Iowa Secretary of State Business Services Division. Unlike most states, the Iowa Secretary of State does not provide a downloadable form or online form for the certificate—you will have to draft your own or have a lawyer prepare one for you. The certificate must include:
An LLC operating agreement is not required in Iowa, but is highly advisable. This is an internal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates. If an operating agreement is created, it does not need to be filed along with the Certificate of Organization.
All of the paperwork and procedural steps to start a limited liability company can be done online using Nolo's Online LLC Formation service.
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). However, there are practical reasons it makes sense for SMLLCs to obtain an EIN as well; read our article on when to get an EIN. You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses. For local licenses, check with the clerk for the city where the LLC's primary place of business is located (or county if it is in an unincorporated area). For state license information, check the Iowa Business License Information Center. For more information, see Nolo's article How to Get a Small Business License in Iowa.
Department of Revenue: In some cases, for example if you will be selling goods and collecting sales tax or if you have employees, you’ll need to register with the Iowa Department of Revenue (DOR). You can register either online or on paper (Form 78-005, Iowa Business Tax Permit Registration). For more information on Iowa LLC tax registration, see Nolo's article Iowa LLC Filing Requirements.
All LLCs doing business in Iowa must file a Biennial Report with the Secretary of State every two years. You can file the report online at the Secretary of State website or download a pre-filled form from the same site. The report is due in odd-numbered years by March 31. You should receive notification from the Secretary of State before the report is due. The filing fee is $30 for online filings and $45 for filings by mail. For more information on Iowa LLC Biennial Reports, see Nolo's article Iowa LLC Filing Requirements.
To do business in Iowa, all LLCs organized outside of the state must register with the Iowa Secretary of State. Foreign LLCs must appoint a registered agent for service of process physically located in Iowa. To register, file an Application for Certificate of Authority. The application may be filed online or by mail. The filing fee is $100.
The completed application must be accompanied by a Certificate of Good Standing or Existence from the foreign LLC’s home state, dated no more than 90 days prior to the filing of the certificate.
Before filing, make sure the LLC’s name is available in Iowa by checking the Iowa business name database. If the name is not available, the foreign LLC must adopt a fictitious business name for use in Iowa. In this event, it must file with the application a copy of the LLC resolution adopting the fictitious name.