Many Iowa entrepreneurs choose to form a limited liability company (LLC) because of the many benefits of this business entity type. An LLC provides liability protection, for instance, so your assets are not at risk if your business is sued or cannot pay debts.
An LLC is a “pass-through entity” for tax purposes, meaning that the LLC itself is not taxed. Instead, income passes through the business to the LLC owners or members, who report it on their tax returns. LLCs also offer flexibility in terms of management and taxation.
Creating an LLC is relatively straightforward, but ensuring it’s done correctly is crucial to getting your Iowa business on the right foot. The most critical step is filing a certificate of organization.
What Is a Certificate of Organization for an LLC?
The certificate of organization (also known as Articles of Organization in other states) is a legal document filed with the Iowa Secretary of State to form an LLC officially. It will include your business name, address, registered agent information, and more, as detailed below.
First, Select a Registered Agent for Your Iowa LLC
Iowa requires LLCs to appoint a registered agent, a person or company authorized to accept and respond to official business correspondence, such as legal, tax, or financial documents.
The registered agent ensures all required notices and documents are received. In Iowa, the registered agent can be an LLC member, individual, or entity that meets state requirements. In Iowa, a registered agent must:
- Be 18 years or older
- Have a physical address in the state
- Be available during regular business hours
- Be registered to operate in the state, if it’s a business
Many business owners hire a registered agent service to ensure their LLC stays fully compliant and for convenience.
If you choose to be your registered agent, you must be at your registered agent’s address for all business hours. A registered agent service allows you to be wherever you need to be to run and grow your business.
How to Submit a Certificate of Organization in Iowa
Iowa does not provide a certificate of organization form. Instead, you have to draft your own, fill it out and upload it to the website.
In Iowa, the certificate of organization requires the following information:
- LLC name
- Principal office address
- Registered agent information
- Registered office address
Here are the instructions from the website:
You’ll need to create an Iowa Fast Track filing system account to upload your document.
Once you’re signed in, click “File a Business Document.” Then you’ll select “form an Iowa limited liability company.”
You’ll be taken to a page where you can fill in all the required information and upload your document.
Then, you’ll electronically sign the form and select “review and pay.” Review your information and then put in your payment information.
The filing fee is $50. You should receive confirmation in one business day if you file online. The turnaround time for filing by mail can be up to five weeks.
Some entrepreneurs hire an LLC formation service like ZenBusiness to handle this step, saving time and ensuring the process is done correctly.
Draft an Operating Agreement
Iowa does not require an operating agreement, but it’s a crucial document that defines members’ ownership percentages and profit allocations. Those are the two key elements, but it should also include the following:
- Each member’s rights and responsibilities
- Management structure and roles
- Voting rights of each member
- Rules for meetings and voting
- What happens when a member sells their interest, becomes disabled, or dies
You can find operating agreement templates online, but it’s best to have them drawn up or reviewed by an attorney. The language of an operating agreement is crucial and can often help determine how member disputes will be resolved. Here you can obtain a free operating agreement template for your Iowa LLC.
Contact Information for the Iowa Secretary of State
Main website: Iowa Secretary of State
Online portal website: Fast Track Filing
Iowa Secretary of State
First Floor, Lucas Building
321 E. 12th St.
Des Moines, IA 50319
TTY: Call 711 followed by 515-281-5204
Email: [email protected]
There’s only one way to create an LLC in Iowa: successfully filing a certificate of organization. If you make any mistakes, you’ll likely have to refile, so be sure to do it right the first time and set your business up for serious success!