Are you thinking of starting an LLC in Iowa? Before you get started, it’s important to understand the various costs involved.
The good news is that forming Iowa LLC is a lot more affordable than most people think. While there are some fees and expenses involved, most are reasonable enough for even business owners on a tight budget to afford. And, depending on how much of the process you are willing to do yourself, some LLC formation expenses can be avoided.
In this article, we’ll take an in-depth look at all of the costs associated with forming an Iowa LLC so you know what to expect from the process. If you’re trying to put together a budget for your company’s formation or get an idea of how much it’s going to cost, you’re in the right place!
When you form an LLC in Iowa, there are several steps that must be completed. And, in most cases, these steps also include some associated fees and details. We won’t go over all the details of how to form an Iowa LLC in this article (if you would like a more in-depth guide to forming an Iowa LLC, you can check out this guide). However, here is a brief rundown of each step and the potential expenses involved:
The first step when forming an LLC in Iowa is choosing a name for your company. But before you can move forward with the filing process, you need to confirm that the name you’d like to use is available.
Thankfully, conducting a business name search in Iowa is free when you use the search tool on the Iowa Secretary of State’s website. If you aren’t ready to proceed with forming your company but would like to ensure your chosen name is still available when you are, you can reserve a name for up to 120 days by paying a $10 fee. Or, if you would like to operate under a different name than your LLC’s legal name, you can file a Doing Business As (DBA) name, which costs $5 in Iowa.
Filing a certificate of organization with the Iowa Secretary of State is the main step when forming an LLC in Iowa. This document provides the state with details about your company, and it can be filed online or by mail. When you submit your certificate of organization, you’ll be required to pay a $50 filing fee.
Unlike many states, Iowa does not provide a form for filing a certificate of organization for an LLC. This means that you’ll either have to write your own or hire an attorney to create it for you. Generally speaking, attorneys will charge between $500-$2,000 for this service.
A registered agent is someone who accepts mail and documents from the state on behalf of your business, and LLCs in Iowa are required to appoint one. You can serve as your own registered agent (which is free), or you can hire a registered agent service such as the one offered by Tailor Brands. Depending on the exact service you choose, this can cost between $199-$400 per year.
Despite the expense, working with a registered agent service is a popular choice among Iowa business owners. As long as you choose a service that is well-established and reliable, you can rest assured that all important documents sent to your business are received and processed in a timely manner. Additionally, working with a registered agent service provides a lot of convenience to busy business owners who may not have the time to keep up with the responsibility themselves.
LLCs in Iowa are not legally required to have an operating agreement. However, there are several good reasons why you may want to create one anyway. This document outlines how your LLC will operate, its structure, and management, and it serves as a legally binding contract in the event that there is a dispute between LLC members. An operating agreement also helps LLCs avoid being subject to state default rules which may not always align with the business’s needs or the wishes of its members.
You can create an operating agreement yourself for free, or you can hire an attorney or operating agreement service (like the one Tailor Brands offers) to do it for you. If you outsource the creation of this document, it will cost between a few hundred to $1,000+ depending on the service you choose.
In addition to the expenses that go along with forming an LLC in Iowa, there are some other Iowa LLC costs that you’ll want to be aware of. This includes expenses such as:
Depending on the nature of your business and the activities it engages in (as well as where it’s located), there are numerous licenses and permits you may need to acquire. Most Iowa LLCs will need to get a business license from the city government, and these will range in cost from one city to another.
General business licenses are typically not that expensive (less than $100 in most cases), but certain professional licenses will cost you more. Be sure to check your local municipal requirements to see which permits and licenses will be required for your business.
Every LLC in Iowa is required to file a biennial report with the Iowa Secretary of State. This report is due between January 1 and April 1 of odd years, and it is designed to ensure that the state has up-to-date information on your company. Each time you file your LLC’s biennial report, you’ll have to pay a $45 fee.
While there are a lot of different expenses business owners in Iowa will incur when forming an LLC, the good news is that most of these expenses will count as federal tax write-offs. LLC formation expenses that are tax-deductible include ones like:
These deductions can help reduce the overall cost of setting up your Iowa LLC.
LLC filing fee (certificate of Organization) | $50 |
Business license | Varies by municipality ($50+) |
Registered agent (optional) | $199-$400 |
Reserve business name (optional) | $10 |
Filing a DBA (optional) | $5 |
Franchise tax | None |
Biennial report | $45 |
If you are looking to form an LLC in Iowa, understanding the costs involved is a key first step. Thankfully, forming an LLC in Iowa is not as expensive as many might assume.
At Tailor Brands, we strive to make our LLC formation packages as affordable as possible so that business owners can conveniently form their new companies without breaking the bank. Our comprehensive Iowa LLC formation packages include all the services needed to get your company up and running in a way that’s quick, easy, and affordable.
The processing time to form an LLC in Iowa can vary, but typically, it takes 1 to 2 weeks if you file by mail. Online filings are processed faster, usually within 1 to 2 business days.
Yes, all LLCs in Iowa are required to have a registered agent. This can either be a person or a company that is designated to receive legal documents on behalf of your LLC. You can serve as your own registered agent, or hire a professional service such as the one offered by Tailor Brands.
No, Iowa does not legally require LLCs to have an operating agreement. However, it's highly recommended to create one since it helps define the structure, management, and operational rules of your LLC.
While Iowa does not issue a general state-wide business license, most LLCs will need specific licenses or permits based on their business activities and local regulations. Be sure to check with the city or county where your LLC operates to determine which licenses you will need.
Yes, you can reserve a business name in Iowa for up to 120 days before forming your LLC. The cost to reserve a name is $10.
If you would like your LLC to operate under a different name, you can file DBA in Iowa for $5.
Yes, you can form an LLC online through the Iowa Secretary of State’s website. Compared to filings that are sent in by mail, online filings are typically processed much faster.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness. It also does not indicate any affiliation between Tailor Brands and any other brands, services or logos.
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