Starting a business is exciting, but it also comes with challenges. One of the first challenges an entrepreneur faces is establishing an LLC, or a limited liability company. The State of Iowa requires business owners to file LLC formation paperwork to get things started. These documents legally set up a company in the state.
While forming an LLC, an entrepreneur will likely be introduced into new terms like a registered agent. Every company is required to list a registered agent on its formation documents.
A registered agent is a person or company that accepts documents on behalf of your LLC.
Many entrepreneurs have questions about registered agents, like who can serve in the position and the part it plays in setting up a company. To help, we’ve created a guide that answers frequently asked questions.
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How is an LLC formed in Iowa?
In Iowa, an LLC is formed by filing a Certificate of Organization with the secretary of state. This paperwork is the only legal way to set up a company in the state.
Before starting this paperwork, however, there are a few things an entrepreneur should consider to set up an LLC. Here are the steps to follow:
1. Name the company
The LLC formation documents request the name of the company that’s being established. Before picking a name, it’s best to see if the name is already in use by running a business search on the Iowa Secretary of State website.
If the name is already used by another company in the state, you’ll have to think of a different name or come up with a variation of it. The state requires all business names to be recognizably different.
While selecting a name for the company, it’s a good idea to see if the matching domain name is available too. Many entrepreneurs settle on a name, list it on their formation documents, and then realize after the fact that the domain name isn’t available. It’s important to think the entire naming process through.
The State of Iowa also has a few rules when it comes to naming a business, which is similar to those in other states:
- The name must include “LLC” or “Ltd” or “Limited Liability Company” in the title.
- No company can imply in their name that they’re connected to a government agency. Names with any references to the FBI, for example, aren’t allowed.
- Be prepared for additional approvals for titles that make claims, like an academy or financial institution. These descriptors will require additional follow-up from the state.
While selecting a company name may seem simple, as you can see, there are a few things to consider before assuming the company name is already decided.
2. Pick a registered agent
In addition to the name of the company, the Certificate of Organization will ask the LLC organizer to select a registered agent. A registered agent is a person or company that serves as the LLC’s point of contact. This point of contact will receive official notices that could include tax statements, compliance notices, or lawsuit documentation.
In some states, the registered agent must provide a letter of authorization to make sure the person or company is aware of the role and its responsibility. Iowa doesn’t require such authorization, but it’s a decision that shouldn’t be taken lightly.
Several different people or companies can serve as a registered agent. We’ll explore who can be a registered agent later in this article.
3. File the Certificate of Organization
To establish an LLC in Iowa, a business owner should file a Certificate of Organization with the Iowa Secretary of State Business Services Division.
Most states provide downloadable documents online for owners to submit electronically or mail in. However, Iowa doesn’t offer such a service. Owners must draft their own Certificate of Organization, or have a lawyer do it.
Some entrepreneurs look online for Certificate of Organization templates and submit them to the state.
The form should include the company name, the name and address of the registered agent, the company’s purpose, and the signature of the LLC organizer.
Once complete, the papers can be submitted online or mailed. In addition, there’s a $50 filing fee. If you decide to submit the paperwork online, there is a way to pay the filing fee online too.
It takes 7-14 days for the state to approve an LLC for the certificate.
4. Create a company operating agreement
Once the LLC formation documents are filed, the next item on the to-do list is to create an operating agreement. An operating agreement should be drafted and agreed upon before a business opens to the public.
This contract provides an outline for how the business will run. It explains how decisions are made, how profits and losses are distributed, and how day-to-day operations are executed.
The state of Iowa doesn’t require a copy of this agreement. However, most business experts strongly suggest creating one during the initial stages of forming an LLC to avoid arguments (or even lawsuits) in the years to come.
5. Obtain an EIN
To operate, the business needs an EIN or an employer identification number. This number is issued by the IRS and serves as the company’s ID. The ID is needed to:
- Pay taxes
- Hire employees
- Open bank accounts
- Apply for business loans
6. File an annual report
All companies in Iowa must file a Biennial Report with the Secretary of State every two years. The report is due on odd-numbered years by March 31. The secretary of state’s office sends reminders to LLCs to file the document and pay $30 when filing online or $45 when filing via mail.
What is an Iowa registered agent?
An Iowa registered agent is a person or company that’s willing to accept important documents for your LLC. This person will likely receive documents like tax notices or service of process papers, which are served during a lawsuit.
The selected registered agent should be a trustworthy person or company.
Do I really need a registered agent in Iowa?
Yes. The state requires all LLCs or Iowa corporations to list a registered agent on the formation paperwork.
Can I be my own registered agent in Iowa?
Yes. Many business owners serve as their own registered agent. If the owner plans to physically work at the company, it’s an easy fit. However, it’s not the only choice. Iowa business owners can select others to fill this role.
Who can be a registered agent in Iowa?
In Iowa, a registered agent must meet these criteria:
- Any person with a physical address in Iowa
- Any company that’s in good standing and authorized to do business in the state
- The person or company must have a street address, not a P.O. box
- The person or company must be available during regular business hours to accept documents as needed.
Given these rules, a registered agent could be a friend, a trusted employee, a family member, another local business, or even a professional registered agent service. For a fee, there are businesses that serve as your company’s registered agent. They’re known as a registered agent service.
Why would a company choose to work with a registered agent service?
A registered agent service is a professional company that accepts documents on behalf of your company. Here are some benefits to working with such a company:
- Availability. A registered agent should be available during regular business hours. Some business owners don’t keep regular hours, need to travel or have regular commitments that keep them away from the office. A registered agent service is available during regular business hours, which makes it a convenient choice for busy business owners.
- Peace of mind. A professional service has experience accepting documents and serving as a company’s point of contact. It gives an owner peace of mind knowing all official paperwork is being handled by professionals.
- Privacy. Registered agents receive confidential documents. For added protection, a registered agent service is ideal. When documents arrive, the owner is notified immediately.
List of Iowa registered agent services
To find a registered agent service in the state of Iowa, owners can start with a Google search. To provide an idea of services available, here’s a snapshot of possible choices:
- Incfile.com: Incfile.com can help entrepreneurs file their LLC formation paperwork and serve as the company’s registered agent. The online company offers a host of beneficial business services that includes filing reports and other necessary documents with the state. The first year is free. After that, it’s $119 a year.
- Northwest Registered Agent: For $125 a year, Northwest Registered Agent offers an online portal, real-time updates when mail is received, and pricing that remains the same each year. The company offers its services in several states and has years of experience in the field. Additional business services are also offered.
- Swyft Filings: Swyft Filings offers registered agent services that start at $149 a year. Users get an online dashboard, report and filing reminders, and secure document storage for this fee. In addition, the company has a buffet of other business services available when you have a need.
How much does a registered agent service cost in Iowa?
Entrepreneurs often wonder how much a registered agent service costs. The cost might be more affordable than you think. There are companies that can serve as your registered agent for as little as $35 a year. These companies will accept documents and notify you when they arrive.
For more advanced services like mail forwarding, online accounts, and reminders regarding annual reports, prices hover around $100-250 annually.
How does an owner select a registered agent in Iowa?
The registered agent is listed on the LLC formation papers, which are known as the Certificate of Organization in Iowa. The person or company name and address are required by law.
Can a company change its registered agent?
Yes. Registered agents do change from time to time. When a change is needed, the owner must file a Change of Registered Agent form with the secretary of state. Many states charge a filing fee to make this change, but in Iowa, there is no fee.
What’s a statutory agent?
A statutory agent and a registered agent have the same meaning. The title varies by state. In Arizona, for example, a statutory agent is used. Other states use the title ‘service of process’ agent.
Most states though, including Iowa, use the term registered agent.
What’s a commercial registered agent?
A commercial agent is a professional registered agent service. They’re considered commercial because a business must pay for their services. A non-commercial registered agent is an agent that’s not paid to fill the role. If a business owner, employee, or friend, are listed as the registered agent, they’re considered non-commercial.