Last Updated on June 13, 2022 by Fair Punishment Team
If you’re thinking about taking the plunge and becoming your very own business owner, you’re making a great choice to opt for an LLC. Otherwise referred to as a Limited Liability Company, an LLC is a business model in the U.S. that offers the owner liability protection and unique tax advantages.
In this article, we are going to be showing you how to start an LLC in Iowa in a simple and easy-to-follow format that will make setting it up as simple as can be. From naming your LLC to important business documents, we have made sure to cover all bases. Let’s jump right into it.
1. Name Your Iowa LLC
When starting an LLC in Iowa, the first thing that you are going to need to do is name your LLC. Without a name, you won’t be able to file for important business documents or legally register your business, so it’s a good idea to choose the name before you do anything else.
Along with making sure that you choose a name that is going to suit your business and provide potential customers with an insight into what your LLC is going to offer, you are also going to need to make sure that the name that you choose complies with the requirements that have been put in place by the state of Iowa. These are as follows:
- Include LLC, L.L.C, or Limited Liability Company: It is currently a requirement in the state of Iowa to include either LLC, L.L.C, or Limited Liability Company in the name of your chosen name for your company. It is entirely up to you where you choose to include the chosen term in your name, but you are going to need to include it somewhere.
- Do not include restricted words: You’re also going to need to make sure that you do not include any restricted words in the name of your company. These include words such as “bank”, “attorney” and “lawyer”, so you will need to refrain from using these in the name of your company. In other words, you need to make sure that you aren’t using any words that might confuse your LLC with a government entity.
- Make sure that your name does not copy the name of an LLC already registered: Last but not least, the final consideration that you are going to need to make when naming your LLC is to make sure that you aren’t using a name that is already registered in the state of Iowa.
Along with all of the above, you might also be interested in considering whether or not the name that you choose is available as a URL. This isn’t a requirement, however, it is highly likely that you are going to need to start an online business at one point or another.
So, it is a good idea to think about whether or not the name that you want to pick for your LLC is available as a website.
2. Choose A Registered Agent
When starting an LLC in Iowa, you are also going to need to make sure that you have appointed a registered agent to your LLC.
It is a requirement that you will need to appoint a registered agent to work for your company in the state of Iowa currently.
Not sure what a registered agent is? Essentially, it is either an organization or a business entity that is responsible for receiving all of your legal and government correspondence on behalf of your Limited Liability Company.
To put it simply, your registered agent will be responsible for handling all of your business mail.
Anyone can serve as a registered agent, including yourself or other members of your LLC.
However, you will need to make sure that the person or organization that you appoint to be your registered agent will be able to meet the following requirements:
- The registered agent that you choose must be located in your state: First things first, you are going to need to make sure that the person or organization that you elect to be your registered agent has an address within the state of Idaho.
- The registered agent must be able to receive correspondence during normal business hours: You registered agent must be able to receive business, legal, and government correspondence during normal business hours in the state of Idaho.
3. File The Articles Of Incorporation
After you have taken the time to appoint your registered agent, you are then going to need to go ahead and file for your Articles of Incorporation.
This is a legal document that is mandatory within the state of Iowa, and you will need to pay a fee of $50 to file for it, with an additional fee if you need to make any amendments to it.
If you’re not aware of what the Articles of Incorporation are, it is essentially a type of document that will allow you to legally register your business within the state of Idaho.
Once you have filed them and sent them to the secretary of state to approve your Articles of Incorporation, you will then be able to begin legally conducting your business within the state of Idaho, as well as elsewhere.
Here is a breakdown of what the Articles of Incorporation will need to include:
- In the Articles of Incorporation, you will be required to share the name of your LLC, as well as the address to which you registered it.
- A declaration of whether or not your LLC is going to be run by you or another member of the LLC.
- The duration of your LLC. Typically, this will be listed as “perpetual” (which means that the duration of the LLC is indefinite with no certain or clear end) however, if you are only planning to run your LLC for a set duration of time to fulfill a certain purpose, then you will need to clearly state this here for the Secretary of State.
- The name and full contact details of the person or organization that has been appointed to serve as the registered agent will need to be included.
- The contact information for all the memes of the LLC, as well as the roles that each member fills.
- A declaration of whether or not the members of the LLC, including yourself, will be liable for any debts or liabilities that the LLC may infer over its duration.
All of this information will be kept on file by the Secretary of State for Iowa and will serve as a way to legally establish your LLC within the state so that you may begin legally operating within it.
Without the Articles of Incorporation, you will be unable to legally run your business within the state, so it’s imperative that you create them for your LLC. Please click here for more information regarding the Articles of Incorporation from Iowa’s Secretary of State.
4. Create An Operating Agreement
After you have taken the time to create your Articles of Incorporation and you have sent them to be approved by the Secretary of State, you can then move forward with creating the next important business document that you will need to equip your LLC with: the operating agreement.
Unlike the Articles of Incorporation which are a mandatory requirement within the state of Iowa, an operating agreement isn’t necessary to have, although it will be in the best interest of you and your business to have one.
This is because an operating agreement will serve as an internal document that will allow you to clearly outline the way in which you want your business to operate, as well as include a variety of important information that will be useful in the event of a dispute or other type of misunderstanding.
If you do not make sure that your LLC is equipped with an operating agreement for you to refer to, in the instance that there was a legal dispute or misunderstanding, the responsibility of settling the issue would fall to state law, and that might not necessarily be in the best interest of you or your business.
In addition to this, it would also mean that you would have no control over the outcome of the disputes, which means that you would not be able to provide any input in helping to settle the misunderstanding despite being the owner.
However, by making sure that you have an operating agreement put in place, it would mean that you would be able to handle any disputes or misunderstandings internally, which will not only ensure that you are able to ensure all settlements are in the best interest of your LLC, but that your LLC will also have legal credibility, too.
If you would like to create an operating agreement for your LLC, you can do so by using this form.
5. Get An EIN Number
Once you have taken the time to file for all of the important business documents that you are going to need to get your LLC up and running in the state of Iowa, you are then going to need to make sure that you have also taken the time to file for an EIN.
If you aren’t aware of what that is, an EIN essentially means Employer Identification Number and is mandatory for all business entities to have – both in the state of Iowa and elsewhere in the country.
This is because an Employer Identification Number will ensure that the Internal Revenue System (IRS) will be able to keep track of your business’s tax reporting, as well as to be able to easily identify your business for other tax purposes.
You can easily apply for your business to be assigned an Employer Identification Number directly via the Internal Revenue System’s website, although in some instances you might also be able to do this by mail.
If you would like to apply for your LLC’s Employer Identification Number via the website, please click here.
In addition to being a requirement for the IRS to be able to easily identify and track your Limited Liability Company for tax purposes, you will also need to make sure that you have an Employer Identification Number for the following purposes:
- To be able to hire new employees.
- To be able to take out a business bank account or credit card.
- To be able to apply for financial assistance or loans.
Keep in mind that it is very important to make sure that you apply for an EIN, as without one, it will be very difficult to prove the legitimacy of your business.
6. Decide If You Need A BIN
The final basic step you will need to take to get your Limited Liability Company up, running, and ready to go is to make sure that you have also determined whether or not your company is going to need a BIN.
Just like the EIN, the BIN is another type of identification number used by the IRS and stands for Business Identification Number.
Unlike the EIN which is a requirement for all business entities to have, the BIN is only required if an LLC has employees, as the IRS uses this specific identification number as a way to track an LLC’s payroll tax reporting.
If you are going to be operating your LLC as a sole proprietorship, then you will not need to assign your LLC with a BIN.
Frequently Asked Questions
Do I Need A Business License?
Along with making sure that you’ve got the right documents, another important question that many LLC owners find themselves wondering is whether or not they will need to get a business license.
If you have already begun to do some research of your own, then we’re sure that you might have seen that the answer to this question greatly depends on the location in which the Limited Liability Company is being created.
While a business license might be required in one state, it might not be required in the next.
With that being said, when it comes to the state of Iowa, there is not currently a standard business license that applies to all business entities.
Instead, a business license will only be required for certain LLCs who are situated within certain industries such as childcare, food service and construction.
What Are The Tax Requirements For An LLC?
Similar to a business license, the tax requirements of an LLC will also vary depending on the state in which the LLC has been registered and is located within.
When it comes to the state of Iowa, despite the fact that you will be required to file a biennial report of your LLC (it can be done easily online) you do not currently need to pay any income tax on LLCs in Iowa due to the fact that they are deemed to be pass-through entities.
This means that you will not need to pay a flat rate tax on your LLC to either the federal government or the state of Iowa, either.