How to Form an Iowa LLC or Corporation
The State of Iowa is is beautiful, covered with beautiful farm lands stretching across the landscape as far as the eyes can see. The state in typically first in its production of corn in the United States, and has robust farm production of many types of crops. The first thing that comes to mind about the state is that most farms operate as small businesses often operate as small businesses with sometimes millions of dollars in farm equipment and hundreds of thousands of dollars in land and property value. So, with all of these assets owned by a business, it is prudent to do what you can to limit liability and to protect your assets.
As we always mention, please be sure to consult an attorney with your questions about protecting your assets and a CPA about your specific financial situation.
Form an Iowa LLC
The LLC in Iowa is similar to most US States in that you will need to file a document with the Secretary of State and then pay the required registration fee in or to Organize your Iowa LLC. A limited liability company, LLC, can provide many benefits to the members/owners and here are a few of those benefits:
- limited liability protection - this affords the owner, or member, of the LLC with the protection of separating their personal and business assets. The real benefit here is that if a client or credit sues you, they will sue your business and not you personally. There are some things that you must do to ensure that they do not pierce the corporate veil, and in general is that you operate your business totally separate from your personal assets.
- pass through taxation - when you decide to setup an LLC, you will have the benefit of pass through taxation which means that the income earned by the LLC will go through corporation to the income statement of the members. This will help to prevent the double taxation that can occur with a C Corporation.
- members or managers can be distinctly referred to.
How to Name and Iowa LLC
The name of a limited liability company must contain the words “limited liability company” or “limited company” or the abbreviation “L. L. C.”, “LLC”, “L. C.”, or “LC”. “Limited” may be abbreviated as “Ltd.”, and “company” may be abbreviated as “Co.”.
Incorporate in Iowa
If you choose to incorporate in Iowa, you can get a few similar benefits that also apply to the LLC. A couple of these benefits are:
- limited liability protection for both C corporation and S corporation.
- Pass through taxation applies to the S corporation.
- Stand alone taxation applies to C corporations.
- Both C & S can issue and easily transfer shares.
Additional Requirements for an Incorporation in Iowa
- Must contain the word “corporation”, “incorporated”, “company”, or “limited”, or the abbreviation “corp.”, “inc.”, “co.”, or “ltd.”, or words or abbreviations of like import in another language.
- The purpose of the Corporation must be stated.
- Provide information about the issued shares.
Where Business Begins in Iowa
Iowa has a real interesting outreach to small business owners and it is called IA Source Link. At this website you can find many resources for the IOWAN to conduct business in the state. The resources here are for planning, funding, running, regulatory, and marketing. This is a valuable resource for the small and medium sized business owner, with a lot of answers at just one place. For example, they will provide info on how to walk through the estimation of how much money your business will need. Kinda cool.
Iowa Secretary of State Links:
