How to Start a Business and Form Your LLC in Iowa

Iowa Business Facts and Environment

IA Business Facts

The Hawkeye State is set on a solid foundation for family and group thus making it an easy decision for business people to secure their financial advancement. When you work in Iowa, you will realize how your success impacts the people continuously. In addition, building networks in Iowa implies something beyond systems administration; you can form bonds that can be useful in both the business and individual world.

Iowa has the advantage of being an expert in various enterprises, some of which may surprise you! Notwithstanding a strong rural system, Iowa is additionally a main power in the propelled manufacturing world and is strong in the biosciences and money related service businesses. Each of these has monetary motivation programs set up that are intended to advance financial development and achievement. Regardless of whether you’re hoping to begin a fundamental road boutique or enter the universe of cutting edge manufacturing, Iowa has the ideal mix of enterprises to enable you to make progress.

Major Companies Headquartered in Iowa

Iowa is the headquarters of many major companies including Casey’s General Stores, Rockwell Collins, Principal Financial Group, Hy-Vee, and the University of Iowa.

Startup Environment

Iowa is a perfect place for business! CNBC positions Iowa #2 for a state with the lowest cost of business. That makes Iowa the ideal place for new businesses and set up organizations alike. Iowa is additionally positioned #9 in terms of lifestyle, making it the best place to live and maintain your business from.

Step 1: Decide on a Business Structure

There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.

• A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
• A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
• An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.

Step 2: Pick a Business Name

Choosing a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that the better). In Step 3 we’ll show you how to search for the name in Iowa, but we highly recommend you do the following before searching Iowa state databases:

• Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
• Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
• Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if your name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use Google at a fairly advanced level you can reasonably clear a name yourself.
  
  Tip: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.
  
• Make sure your company name choice is available by searching the Iowa Business Entity Database and doing a name search on the State of Iowa website. NOTE: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).

NOTE: Familiarize yourself with the Iowa naming guidelines. LLC entity names need to contain the words Limited Liability Company or the abbreviation LLC, and certain words are restricted or prohibited.

Restrictions on Iowa Business Name & Business Purpose

Business Name Restrictions: Bank, Banker, Banking, Savings, Safe Deposit, Trust, Trustee, Insurance, Credit Union.

Step 3: Register the Business

Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and selected your business name, here are the requirements to register your business in Iowa.

How to form an LLC in Iowa

• File the “Articles of Organization” with the Iowa Secretary of State.
• Once the articles are filed and approved you will then need to properly organize the LLC (this also applies to “1-person LLC’s”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more.

How to Incorporate in Iowa

• File the “Articles of Incorporation” with the Iowa Secretary of State.
• Hold an “Organizational Meeting” to determine the percentage of ownership for each shareholder as well as resolve to do tasks like open a company bank account, pay back pre-incorporation expenses, elect S-Corporation status and more.
• Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.

NOTE: When registering a new company the Secretary of State can take several weeks to file the paperwork. You can expedite the process by hand delivering the documents directly to them or one of their field offices and paying an additional fee.

TIP: Check our order form to see how long Iowa is currently taking to process regular and expedited orders.

How to File a DBA in Iowa

• Find out the availability of the business’ name.
• Go to the Iowa Secretary of State website and search the state database of names.
• Pay $50 for the filing fee.

Considerations when registering a Iowa business

• Hire a professional Registered Agent. Many people list their home or business address on the Articles of Organization or Incorporation. This can cause issues because it becomes public record (you’ll get lots of junk mail). A professional Registered Agent will provide their address and forward any important documents to you, this is also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).

Ready to register a business in Iowa?

• We specialize in registering businesses in Iowa.

Ready to Start Now? Let Us Do The Work

Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.

• Learn more about our business formation service
• Read our verified reviews and 100% Satisfaction Guarantee
• Contact our friendly support team if you have any questions

Step 4: Obtain Your Federal Employer Identification Number

Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.

To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.

TIP: We will obtain your EIN for you if you we form your company.

Step 5: Open Company Bank and Credit Accounts

To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork, b) your EIN and c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).

Top 5 Major Banks in Iowa

• Bankers Trust
• Great Western Bank
• Bank of the West
• Iowa State Bank
• Wells Fargo Private Bank

Click here to view a list of our recommended banks in our Vendor Network.

TIP: Our business formation service includes a free banking resolution for your use.

Step 6: Set-up An Accounting System

Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.

Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.

Review our list of Accountants, Accounting Software and Bookkeepers in our Vendor Network.

Step 7: Obtain Licenses and Permits

Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

TIP: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.

Step 8: Hire Employees (if applicable)

If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.

Review our list of recommended Payroll Providers in our Vendor Network.

Step 9: Obtain Business Insurance

There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection.

Click here to view our list of insurance providers in our Vendor Network.

Step 10: Systemize and Organize

Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.

Step 11: Branding and Marketing

Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.

Step 12: Annual and Ongoing Requirements

Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

Click here to view our MyCompanyWorks Premium™ service which can automate most or your ongoing compliance tasks.

TIP: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.

Important Iowa Contacts

Iowa Secretary of State

Business Entity Filings (for Corporation and LLC filings)
First Floor, Lucas Building
321 E. 12th St.
Des Moines, IA 50319
Phone: (515) 281-5204

Iowa Taxation Departments

• Iowa Department of Revenue

Iowa Labor and Employment Departments

• Iowa Department of Workforce Development
• Iowa Division of Labor

Iowa Startup Resources

1. Small Business Administration (SBA) Iowa District Offices

• Iowa District Office

2. SCORE Iowa

• SCORE East Central Iowa has 50+ counselors, young and old, men and women, representing 2,000 years of successful business experience in all disciplines.

3. Iowa Legal Statutes

• Iowa Business Corporation Act – note this is the broad code that includes various other topics including business corporation.
• Iowa Revised Uniform Limited Liability Company Act – the specific act that applies to Iowa LLC’s.
• Iowa Regulations on Licensed Professions and Occupations – this includes regulations on Iowa’s professions and businesses

4. Iowa Chambers of Commerce

• Iowa City Area Chamber of Commerce
• Independence Area Chamber of Commerce
• Manning Chamber of Commerce
• Shelby County Chamber

5. NIACC John Pappajohn Entrepreneurial Center

• Whether you are thinking about starting a business or growing an existing company, the NIACC John Pappajohn Entrepreneurial Center, offers business tools and educational opportunities to assist you.

6. Iowa Angel Investors

• List of Angel Investors in Iowa

7. Iowa Business News

• Des Moines Register
• Iowa Business and Industry

8. IEDC

• The Iowa Economic Development Corporation (IEDC) is the State of Iowa’s lead economic development agency.

9. Iowa Economic Development Authority’s (IEDA)

• The Iowa Economic Development Authority’s (IEDA) mission is to strengthen economic and community vitality by building partnerships and leveraging resources to make Iowa the choice for people and business.

10. Iowa Green Business Program

• The Iowa Green Streets Criteria promote public health, energy efficiency, water conservation, smart locations, operational savings and sustainable building practices.