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by Mike Vestil 

Iowa LLC Fees: How Much Do They Cost?

For Iowa's entrepreneurs and small business owners, establishing a limited liability company (LLC) is often a smart choice. Not only will you enjoy personal liability protection and greater ownership and management flexibility — you can also reap the tax benefits of other business entities depending on what best works in your favor. 

Even though most entrepreneurs and small business owners should form an LLC, many of them are intimidated by the paperwork and fees required when creating and maintaining one. 

Don’t let Iowas LLC fees and legal documentation discourage you! 

To help alleviate your concerns, let’s explore the main fees that Iowa businesses must pay when forming an LLC and when they are due. We’ll also suggest additional documents you should consider that can make the process less stressful.

We’ll discuss:

  • Business name reservation fees
  • Obtaining your “Doing Business As” name
  • How to Make a LLC in Iowa
  • LLC fees for registered agents
  • Iowa LLC fees for drafting an operating agreement
  • Sales tax and use permit fees for Iowa LLCs
  • Business license fees for Iowa LLCs
  • Iowa LLC annual fees
  • Total cost of Iowa LLC fees
  • Additional FAQs

Let’s get started!

Business Name Reservation Fees

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.

Obtaining Your “Doing Business As” (DBA) Name

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. 

How To Make A LLC In Iowa

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 LLC’s name
  • Your registered agent’s name and address
  • Principal place of business address
  • Your LLC’s purpose
  • The name and address of your Certification of Organization’s organizer(s)

Your Certification of Organization costs $50 to file.

LLC Fees For Registered Agents

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. 

If you don’t mind having your information made public and reside in Iowa, you can be your own registered agent for me. Otherwise, commercial registered agent services, like Northwest Registered Agent and Incfile, usually cost $39 or more per year.

Iowa LLC Fees For Drafting An Operating Agreement

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:

  • Procedures for admitting new members
  • Rules for membership transfers
  • Member voting rights
  • Meeting schedules
  • Member financial contributions
  • Member ownership stake
  • The division of profits and losses
  • How to dissolve an LLC
  • The information outlined in your Certificate of Organization

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.

Sales Tax And Use Permit Fees For Iowa LLCs

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:

ATTN Registration Services

Iowa Department of Revenue

P.O. Box 10470

Des Moines, IA 50306-0470

Business License Fees For Iowa LLCs

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:

  • Your LLC’s name
  • Your employer identification number (EIN) or social security number
  • When you formed your LLC and/or started operating in Iowa
  • Your business phone number, email, and mailing address
  • Identification of your LLC’s owners and members or managing members
  • Your North American Industrial Classification System (NAICS) code

Iowa LLC Annual Fees

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!

Total Cost Of State Of Iowa LLC Fees

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

Fee Type

Cost

HOW OFTEN

Business name reservation

$10

One time

DBA name designation

$5

One time

Certificate of Organization filing fee

$50

One time

Registered agent fees

$0, or $39+/yr if with a commercial registered agent service

Annually

Operating agreement costs

$0

One-time

Sales tax registration fees

Free

One-time

Business license fee

Varies

Varies

Biennial fees

$60, or $45 if you use the Fast Track Filing system

Biennially

Additional FAQs About How To Start A LLC In Iowa

Do you still have more questions about LLC fees in Iowa or about LLCs in general? We’re here to help!

How Much Does The URL For Your Business Cost?

When you’re thinking about your legal or DBA name, you should also check to see if the domain name is available. These days, many of your potential customers are likely to find your business online. When your domain name matches your legal or DBA name, it makes it easier for your potential customers to find you. 

Check your domain availability on who.is. Who.is will show you multiple versions of your domain (e.g., .com, .net, .org, etc.) and whether or not it’s for sale. Domain names usually cost as low as $8.99 or $9.99, but more competitive domains can cost thousands.

Do You Need A Good Standing Certificate?

If you want to open a business bank account or work with a lending institution, you will almost always need a Certificate of Good Standing.

Luckily, a physical copy only costs $10.

Forming An Anonymous LLC In Iowa

One key benefit of forming an LLC in Iowa is that you don’t have to disclose your organization’s members when filing your Certificate of Organization. If you want to remain anonymous, you can.

Conclusion: Iowa LLC Fees: How Much Do They Cost?

Are you ready to form an LLC in Iowa and enjoy the incredible benefits that come with it? Now that you know what documents and fees are required to get started, you’re on your way to running a successful business! 

And if you want to capitalize on that success, check out The Lazy Man’s Guide to Living The Good Life, and learn how to take your business to the next level.

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About the author 

Mike Vestil

Mike Vestil is the author of the Lazy Man's Guide To Living The Good Life. He also has a YouTube channel with over 700,000 subscribers where he talks about personal development and personal finance.

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