How to Start a Business in Iowa
Iowa 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 Corporation, LLC or DBA. Click here to learn more about business entities.
- A Corporation is a separate entity (provides liability protection to the owners) with a structure that includes shareholders, directors and officers. It’s 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 and provides very easy management (doesn’t require directors or officers) and taxation. The LLC 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.
- 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.
Step 2: Choose 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
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.
Step 4: Obtain your Federal Employer Identification Number (FEIN or “EIN”)
- 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.
- You can read more about corporate tax laws in Iowa on the Iowa Department of Revenue Taxation Division site.
Step 5: Open Company Accounts: Bank and Credit Cards
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
TIP: Our business formation service includes a free banking resolution for your use.
Step 6: Obtain Business 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 7: Annual and Ongoing Requirements
DBA: Your Fictitious Business Name should be valid for 5 years (unless you change company name or other information listed on the FBN) at which point you’ll need to renew it with the county.
LLC: Iowa corporations are required to file a Periodic Report with the Iowa Secretary of State on or before April 1 every odd year, in addition to general taxation. Information on your business’s taxes can be found here.
Corporation: Business in Iowa should file a report with the Secretary of State of Iowa on or before April 1 every even year.
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 Labor and Employment Departments
Iowa Startup Resources
1. Small Business Administration (SBA) Iowa District Offices
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
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. Angel.co Iowa Startups
- A list of all 300+ Iowa Startups and 4,800+ Iowa angel investors registered with Angel.co. Good research resource.
7. Iowa Business News
8. IEDC
9. Iowa Economic Development Authority’s (IEDA)
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.
