Iowa LLC Fees: How Much Do They Cost?

Did you know that small businesses make up 99.3% of all Iowa businesses? It further proves that small businesses really are the backbone of the economy. 

Unfortunately, because there are so many small businesses out there, there’s a decent chance that any one of them may already be using your desired business name. Before filing your LLC paperwork, conduct a business entity name search and make sure it’s available. 

Don’t forget that, since you’re forming an LLC, you must include “Limited Liability Company,” “LLC,” “L.L.C.,” “LC,” or “L.C.” somewhere in your organization’s name. You must also exclude “corporation” and “incorporated” or any abbreviations. Including these words misrepresents your company since you’re forming an LLC, not a corporation. Be mindful of other words or terms that can almost misrepresent your company, like “insurance,” “trust,” “bank,” and “agency.” 

Once you’ve selected a name that meets the above criteria, you can opt to reserve your business name for $10.

Doing this gives you exclusive rights to use it for 120 days, which should be enough time to file your LLC’s formal documentation. 

While reserving your LLC name is optional, we strongly recommend it. If someone else forms an LLC business using that name while you’re in the process of getting your paperwork together, you’ll have to think of a new name and might even have to start the process all over again.

Even though your LLC name is the one that’ll be on your legal and financial documents, you’re not required to use it in everyday conversation or when promoting your business. Instead, you can use a DBA name. Filing for a DBA name in Iowa only costs $5.

Whether you use your official LLC or DBA name for marketing purposes, check its availability in the Trademark Electronic Search System (TESS) database. The TESS database will show you if another organization has a trademark on the name you’re looking to use. When conducting this search, consider the name you’ll use for marketing purposes. For example, if your LLC is “Dell’s Burgers and Franks,” you can’t market yourself as “Dell” because “Dell” already is. If you do, you’ll be at risk of trademark infringement. 

Once you’ve picked your name, your next step is to file a Certificate of Organization with your Secretary of State. This document sounds difficult and daunting, but it’s actually pretty easy to fill out. It outlines all the important information about your LLC that the government and vendors need to know, including:

Your Certification of Organization costs $50 to file.

A registered agent is a person or business entity that will be receiving the financial and legal documents on your LLC’s behalf. Your registered agent must have a physical address in the state of Iowa. Having a P.O. Box does not meet this requirement. 

In many cases, business owners will opt to hire a commercial registered agent service for one of two reasons. First, when your business becomes an official LLC, your registered agent’s personal information becomes public knowledge. Not everyone is comfortable having their physical address linked to their business. Second, if none of your LLC’s members has a physical address in Iowa, you can’t form an LLC there. 

Iowa doesn’t require you to have an operating agreement. However, you should still create one with terms that you and your membership can agree on and sign. 

Your operating agreement defines your LLC’s rules and regulations and, in a way, acts as your organization’s constitution. Whether you’re a single-member LLC with no employees or a multi-member startup with hundreds of members, an operating agreement can save you from some major headaches down the road. 

Your operating agreement makes for an excellent reference point when you need to make a substantial decision, or if a member has a financial or legal question about your organization. It also protects your business if you ever have a legal and financial dispute. If you don’t have an operating agreement, important decisions may be subject to the courts, and a judge or jury’s ruling may not be in your LLC’s best interest. 

Most operating agreement include:

You can draft an operating agreement for free, but we recommend hiring an attorney to create one for you so that it’s legally sound.

Most LLCs are required to obtain a sales tax and use permit. Luckily, this permit is free in Iowa. All you have to do is register for one online or download the business tax permit registration form and mail it to:

Although your sales tax and permit is free, you may be required to obtain additional permits or licenses with your local, state, and federal government. Whether or not you need to depends on your industry and location. 

While these licenses fees and their renewal periods will vary, most of them require the following information:

Many of Iowa’s LLC fees will cost you less than when you start an LLC in another state. The paperwork and fees you must complete to remain in good standing are no exception. 

First, instead of filing an annual report, you only need to file a report biennially (every other year). Your biennial report primarily consists of you updating the information from your Certificate of Organization. It’s meant to make it easier for the government and vendors to contact you and your registered agent so that you can continue receiving important information that could impact your business. 

Your biennial report costs $60 to file by mail or $45 to file online if you use the Fast Track Filing system. It’s due between January 1 and April 1 on every odd-numbered year. 

Even if you were required to file this report annually, it’s still much more affordable than what LLCs in some states have to pay. For example, Delaware LLC fees are $300 annually, Massachusetts LLC fees are $500 every year, and California LLC fees are $800 or more!

Here’s a recap of all the LLC fees we’ve covered so far and how often they’re due: