An Iowa LLC operating agreement is a legal document that outlines the company ownership and operations and the specifics of each member’s roles and responsibilities. You don’t need to file your operating agreement with the state. It is an internal document you should keep on file, and it’s always a wise idea to have it easily accessible.
An operating agreement will be beneficial to your Iowa LLC both because you will have agreement among the members of your LLC and because you’ll have more protection of your business – even as a sole owner.
Is an LLC Operating Agreement Required in Iowa?
NO, an LLC operating agreement is not required in Iowa. However, this doesn’t mean that you shouldn’t have one.
Iowa LLC operating agreement laws are outlined in the Revised Uniform Limited Liability Company Act, Chapter 489:
- § 489.110: Operating agreement — scope, function, and limitations.
- § 489.111: Operating agreement — effect on limited liability company and persons becoming members — preformation agreement.
- § 489.112: Operating agreement — effect on third parties and relationship to records effective on behalf of limited liability company.
Costs and Fees
You will file your LLC with the Iowa Secretary of State Business Services Division, and cover the following fees:
- Certificate or organization filing fee – $50 ($100 for foreign LLCs).
- Name reservation fee – $10.
- Biennial report fee – $45 or $30 for online filing.
How To Form an LLC in Iowa
Here are the steps to start and manage your Iowa LLC:
Step 1 – Name Your Iowa LLC
The first part of creating your LLC in Iowa is to decide on your name. Conduct a name search on the State of Iowa website so you can see if your name is available.
Keep in mind that you are restricted from certain words that have the potential to confuse your LLC with a government agency. Restricted words like attorney or university may require a licensed individual to be part of your LLC should you choose to include them in your title.
Step 2 – Choose a Registered Agent
You’ll then be required to select an Iowa registered agent for your LLC. They will be the point of contact between the state and the LLC and receive important legal documents on behalf of the business.
A registered agent can be someone who lives in Iowa. They can also be a domestic or foreign business entity authorized to do business in Iowa. Regardless of who you choose, the registered agent must have a physical street address in Iowa.
Step 3 – File Iowa LLC Articles of Organization
To establish your LLC with the state, you’ll file an official LLC document known as the articles of organization. You will file this document with the Iowa Secretary of State Business Services Division.
Iowa will allow you to create a single-member LLC, multimember LLC, or Series LLC. A series LLC is a business set up to hold several properties or interests under one LLC. Series LLCs let businesses hold multiple assets under one umbrella but with separate risks.
Step 4 – Create an Iowa LLC Operating Agreement
The next step after filing your LLC articles of organization is to create your LLC operating agreement, one of the most important documents to keep your company running smoothly. They’re important for multimember LLCs because they will specify each person’s responsibilities and reduce the risk of conflict. They are also helpful because they help to protect the company’s owners, which is beneficial even for a sole LLC owner.
Step 5 – Get an EIN for Your LLC
Your LLC will also need an Employer Identification Number (EIN). An EIN is a nine-digit number assigned by the IRS. This helps them keep track of businesses for tax reasons – think of it as a Social Security number for your business.
You will need an EIN to open a business bank account, file federal and state taxes, and hire employees. You can get an EIN for free from the IRS. Visit the IRS website to apply online.
Step 6 – Keep Your Company Compliant
After your LLC is established, you’ll still need to follow certain state and federal regulations. The State of Iowa’s website and the U.S. Small Business Administration (SBA) website will have information on local, state, and federal taxes. You will be responsible for sales and employer taxes if you have employees in Iowa.
Download an Iowa LLC Operating agreement template below as a PDF or Word file.