The LLC’s business name must be different from all other business entity names registered or reserved with the Iowa Secretary of State. The LLC’s name must end with “Limited Company” or “Limited Liability Company,” or the abbreviations “L.C.” or “L.L.C.” “Limited” may be abbreviated as “Ltd.” and “Company” may be abbreviated as “Co.”
The LLC’s name may not include the terms “corporation,” “incorporated,” or “limited partnership,” and it can’t have any abbreviations for those terms, either.
You can, however, use a name that’s similar to another business’ name if the other entity gives written permission for you to use the name; they also have to request to change their own name in order to make it different from yours. Another exception to the “no similar names” rule is if you have a court order establishing your right to use the name.
A $10 fee will let you reserve an available name for your Iowa LLC for up to 120 days.
The filing time for Iowa LLCs is 5 weeks, and the expedited filing time is 15 business day.
State Filing Fees
The filing fee is $50, and can be expedited for an additional $20.
Articles of Organization and Operating Agreement
The first official step in achieving official status for your Iowa LLC is filing articles of organization with the Iowa Secretary of State. The articles of organization should include the name of the LLC, the street addresses of the LLC’s primary place of business, and the name and address of the LLC’s registered agent. The articles must be signed by at least one organizer, a manager, or, if no managers have been chosen, a member.
Organizers may be individuals, corporations, other LLCs, government subdivisions or agencies, trusts (business or otherwise), estates, partnerships, associations, or any other legal entity. The LLC will be considered to be perpetual unless it is otherwise stated in the articles of organization.
The articles of organization can also include other stipulations the members choose to set forth, so long as they are not against the law, even if they are already in the operating agreement.
Your LLC is considered “organized” once an original and a copy of the articles of organization are received by the Secretary of State with the $50 filing fee, and the articles are confirmed as being in accordance with state law.
The operating agreement is another very important document for an LLC. It can be amended or repealed as allowed by the agreement itself or applicable law. Just like a corporation’s bylaws, having an operating agreement isn’t specifically required by the state, but it’s a key internal document that officially records and explains how the LLC will conduct its operations.
The operating agreement lists the members, how much each has invested, how profits are to be divided, and how much weight each member has when voting. It may also lay out meeting requirements and similar considerations, but is not required to do so. The operating agreement may also include rules and concepts already laid out in state law.
Unless otherwise stated in the articles of organization or the operating agreement, a unanimous vote of members is required to amend either the articles or the operating agreement.
LLCs must have one or more members/managers and each member has to be an invividual. To become a member, an individual makes a contribution of some sort. Members’ contributions can be in cash, property, promissory notes, services previously rendered, or some other obligation to contribute cash, property, or contracts for services to be rendered. A member of an LLC can resign from it, but only in accordance with the articles of organization or operating agreement. These documents also usually specify a minimum period of time a member can be a member before being allowed to resign. LLCs can pursue remedies for damages to the LLC as a result of a member’s resignation.
An Iowa LLC must have a registered agent designated to receive official state legal and administrative correspondence from the state. An Iowa LLC’s registered agent might be an individual state resident whose business office is the same as the registered office, or it may be a business entity that’s authorized to conduct business in Iowa.
Ongoing Filing and Compliance
All Iowa LLC’s have to keep these kinds of records available for inspection at their home office:
- The names and addresses of members, managers, and managing members (if any).
- Articles of organization, along with any amendments.
- Copies of the company’s income tax returns (federal, state, and local) for the past three years.
- Copies of current and previous operating agreements and financial statements for the preceding three years.
- The amount of cash or other contributions and the value of any other property or services contributed by each member, or which members have agreed to contribute.
- The events or times that trigger any additional contributions scheduled to be made by each member.
- Any event or events that would cause the LLC to be dissolved and its business wrapped up.
It’s also advisable for your LLC to keep minutes of the members’ or managers’ proceedings and committee meetings.
An LLC is dissolved when any one of the following events occurs:
- Event(s) listed in the articles of organization or operating agreement as requiring dissolution
- The number or percentage of members specified in the operating agreement agree to dissolve the LLC
- Event that makes it unlawful for the LLC to keep operating
- A court order is handed down requiring dissolution
An LLC has the availability of more deductions compared to corporations because an LLC is not required to be a separate tax entity like a corporation. Instead, it can be a “pass-through entity” for tax purposes, so LLC owners show business losses or profits on their personal tax returns, instead of the LLC being taxed as a separate entity and the members’ incomes from the LLC being taxed a second time at their individual level.
Unless you choose for your LLC to be taxed as a corporation, the IRS treats single-member LLCs as sole proprietorships for tax purposes. This means the LLC itself does not pay taxes and does not have to file a tax return. The IRS treats multi-owned LLCs as partnerships for tax purposes, unless you choose for your LLC to be taxed as a corporation.
The LLC tax rate for Iowa varies based on Iowa taxable net income.