How to Start a Professional LLC in Iowa

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Last updated February 17, 2023
Written by Dmytro Kondratiev
Editor, lawyer
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Forming a PLLC in Iowa is a process of registering a legal entity for licensed professionals. It is a popular option for small business owners who want to build and maintain relationships with colleagues.

If licensed individuals start a PLLC in Iowa, it gives them a number of advantages, like the protection of the participant’s personal assets and the possibility to choose the method of taxation: as a pass-through entity, a C-corporation, or an S-corporation.

The process of starting a PLLC in Iowa is similar to the one of starting a limited liability company. Yet Iowa law imposes the most stringent requirements for PLLC participants: the state law requires all PLLC members to be licensed professionals in their field.

Among other things, they should all be licensed professionals. So, obtaining business licenses and various permits is mandatory to start a company.

How to Form an LLC in Iowa: Step by Step

Before asking “How to start a PLLC in Iowa?”, make sure your type of business is on the state's list of licensed activities:

  • Architects;
  • Certified Public Accountants (CPAs);
  • Attorneys;
  • Dentists;
  • Engineers;
  • Chiropractors;
  • Surgeons;
  • Ophthalmologists;
  • Orthopedists;
  • Physical therapists;
  • Pharmacists;
  • Nurses; 
  • Psychologists;
  • Physician assistants.

Also, real estate brokers, landscape architects, family therapists, and social workers are on this list.

Step 1: Name Your PLLC

The first thing you need to do before starting a PLLC in Iowa is to choose a name for your company. It should include one of the following word combinations:

  • Professional Limited Liability Company;
  • Professional Limited Company;
  • Abbreviations PLC or PLLC.

Moreover, the company name should indicate the type of its activity. For example, the phrase "law office" is preferred for lawyers.

Step 2: Appoint a Registered Agent to Get a PLLC in Iowa

Next, for Iowa PLLC registration, you will need to appoint a registered agent. His/her responsibilities include:

  • A permanent presence in the office during business hours;
  • Procedural maintenance;
  • Receiving official notices.

If you decide to contact RA service providers, our 2022 best registered agent guide will come in handy. There are also local providers in the state (such as Iowa Registered Agent).

Step 3: File Your PLLC Articles of Organization

For Iowa PLLC registration, you need to fill out and file Articles of Organization with the Secretary of State's office. It should include the following information:

  • The name of your company;
  • Business address;
  • Name and address of the registered agent;
  • The effective date of your company registration;
  • Name and signature of the PLLC organizer.

You can submit a statement of information online. It will cost you $50.

Step 4: Draft an Operating Agreement

Want to know how to create a PLLC in Iowa and ensure its smooth operation? Then you should draft Operating Agreement. This is an important document that contains information about the business structure.

The Operating Agreement is not a mandatory document in the state of Iowa. But you should take the time and hire an attorney to draft it.

According to Iowa's LLC Act Section 489.110, this document governs all aspects of a company's business operations.

It will give you such advantages:

  • There will be official information about the division of assets and ownership interests of each PLLC member;
  • Standardization of all work processes;
  • Detailed procedure for new member admissions and resignations, as well as dissolution of the company; 
  • Procedure for hiring and, if necessary, changing a registered agent;
  • The utmost deference from the state court system.

Another advantage is that the operating agreement takes precedence over Iowa law. There is an opportunity to avoid those basic procedures that are set by default but are disadvantageous to you.

Step 5: Get an EIN for Your Iowa PLLC Registration

In order to file a PLLC in Iowa, you need to get a federal tax identification number (EIN). 

To do this:

  • Fill out the form on the IRS website and wait for the results of the check;
  • Receive the EIN by regular mail or online.

If you already have a business in the U.S., you do not need a new EIN. Just contact the IRS representatives to make all the necessary changes. The same procedure is needed when you change the name of your company.

Obtaining an EIN is completely free.

LLC Iowa Cost: How Much is a PLLC in IA

The basic PLLC Iowa cost includes the following fees:

  • Filing the Articles of Organization: $50;
  • RA services: $49-$300/year;
  • Filing a biennial report: $60.

The list of mandatory expenses in the state also includes obtaining the necessary licenses and permits.

The list of other fees includes:

A PLLC name reservation for up to 120 days$10
Obtaining a DBA$5
Obtaining certified copies of documents$5 + $1 for each page
Certificate of Existence$5

If you decide to use LLC formation services to register your company, it will increase the cost of setting it up, but you will get rid of a lot of problems.

Want to know how to set up a PLLC in Iowa easily and quickly? Choose a contractor to register your company in advance.

First Tasks After Creating a PLLC in Iowa

After PLLC registration Iowa, there are many more formalities that need to be completed in order for your company to operate legally and productively. This list includes:

  • Opening a bank account. A business account is necessary to separate your personal finances from your company's assets;
  • Hiring a lawyer. You will need a lawyer to get legal support for your business;
  • Tax obligations. Contact the Iowa Department of Revenue to find out more about it.

Also, for PLLC formation Iowa, you will need to obtain all the licenses required for your business.

For a list of licenses and permits, visit the state's licenses and permits website and the Iowa Business License Information Center website.

Insurance for your business is also needed when forming a PLLC in Iowa. The following ones are necessary:

  • General business liability insurance;
  • Professional liability insurance;
  • Commercial real estate insurance;
  • Employee Compensation insurance.

If, after creating a company you plan to suspend your company operations, you will additionally need business income insurance.

Keep Your Company Compliant

Now, the process of opening a PLLC in Iowa is complete, and your company is ready to start operations. But the founder still needs to perform many tasks regularly to meet all the requirements of Iowa state law.

This list includes:

  • Biennial tax returns. Under Iowa Code Section 489.209, you need to inform the Secretary of State of all changes and file biennial reports;
  • Filing a tax return. All company members should report their share of profits and losses from the company's operations on their personal tax returns.

Use Iowa's Fast Track Filing system for easy biennial filing and tax compliance.

The tax requirements for your company depend on which type of taxation you choose for your PLLC.

For example, if you pay taxes as a C-Corporation, your PLLC is not a pass-through legal entity. So, company members pay taxes separately. Their dividends are subject to corporate tax.

If you choose to be taxed as an S-Corporation, you will need to pay corporate income tax on your share of the company's profits.

The list of required taxes for PLLCs in Iowa includes:

  • Sales and use tax;
  • Federal income tax;
  • Federal unemployment insurance tax;
  • Federal self-employment tax.

Also, the manager and all PLLC employees have to file individual tax returns and pay payroll taxes.