How to Start a Series LLC in Iowa

Iowa is one of the top 10 most attractive states for small businesses. If you plan to launch your own series LLC formation process in Iowa, have no doubt that this state has a lot to offer.

You can expect low filing fees, cost-efficient company maintenance, various federal deductions, and beneficial taxation, including several tax credit programs from the state.

How to Form an LLC in Iowa: Step-by-Step Instructions

Compared to a traditional limited liability company, the main advantage of a series LLC lies in its structure. Thus, you can expect additional flexibility and liability protections for each of your "protected series" (or cells) within the parent company.

Each cell is fully protected from liabilities, lawsuits, and penalties imposed on any other cell in the series.

Step 1: Name Your Series LLC

Before you find out how to start a series LLC in Iowa, you should know that you will need to choose a distinguishable and available name for your business. Iowa law doesn't have any specific requirements for series LLC names.

Thus, you should simply follow these next basic rules:

• The name of the parent company must contain the words "series LLC";
• The name of the parent company must be distinguishable from the child series;
• The word “protected series” must be used within the name of each of your cells;
• The full name of the parent company must be included in the name of each cell;
• The name of each of your cells must include the name of the assets it holds. 

You can check if your chosen business name is available in the state. To do this, visit the Secretary of State's website.

Iowa does not require you to reserve a business name for the venture in advance. However, if you've already chosen an attractive business name but don't plan to start your business operations right away, you can still "save" the name for up to 120 days.

The cost of the name reservation service in Iowa is $10. Before you find out how to form a series LLC in Iowa, note that if you are ready to register your business, you won't need the service, which lowers the final LLC Iowa cost.

Step 2: Appoint a Registered Agent to Get a Series LLC in Iowa

On your way to learning how to form a series LLC in Iowa, you need to choose a registered agent (RA) for your business. This is required by Iowa Code § 489.113.

An RA can be an individual or a commercial entity with a physical address in the state. If you prefer to hire a professional service provider, it's advisable to choose the best registered agent in 2022.

Alternatively, you can also use the services of Iowa Registered Agent. The cost of an RA on the website is $49 a year. The provider has a transparent pricing policy with no hidden fees or additional charges.

Step 3: File Your Series LLC Certificate of Organization

Next, Iowa series LLC registration involves submitting the Certificate of Organization to the Secretary of State's office. The filing fee is $50, and you can always register online to expedite the process.

To file a series LLC in Iowa, you don't need to include the names and addresses of all your managers or members in the company. However, you will still need to indicate the following details in the statement of information:

• Company name and address;
• Your initial registered agent's name and address;
• The purpose of the business;
• Company duration (can be "perpetual" or limited);
• The name of at least one manager and member of the venture;
• Provisions for regulating the internal affairs of the company.

If you're in doubt, we recommend hiring an attorney to help you complete the Certificate of Organization (also known as the Articles of Organization).

Step 4: Prepare an Operating Agreement

Iowa law does not require series LLCs to draft an Operating Agreement (OA). Neither must your OA be filed with the state. Additionally, according to Iowa Statute § 489.110, there are no details about the information to be included in the document.

However, you should know that an OA is a legal document that outlines the ownership and operating procedures of the company. That is why it's highly recommended to have this agreement (in written form) for your series LLC registration in Iowa.

Here's why you need an OA for your business:

• The document outlines the liability limitations (asset protection) of the individual series;
• Your OA is the official evidence that you are the owner of the series LLC;
• Any nuances that are not stated in the document will "by default" be governed by state law;
• The OA will help prevent any possible disputes and controversies among members of the venture in the future.

Essentially, an operating agreement is an internal company document, i.e. a contract for the company, which formalizes its structure, rules, and regulations for everyone to follow.

We recommend hiring a professional attorney when creating your OA.

Step 5: File Your Series LLC Biennial Report

Iowa law requires series LLC owners to file a biennial report with the Secretary of State every two years. This can be done online via Fast Track Filing.

The cost to file a two-year report is $60 (non-refundable). A biennial report is filed by the umbrella LLC on behalf of all the entities within it. The due date is between January 1st and April 1st of every odd-numbered year. This lowers the final LLC Iowa cost.

Note that if you miss your filing deadline, the state will not charge any late fees. However, your series LLC may be administratively dissolved.

You will also need to report income for your series LLC. This task is best outsourced to an accountant with experience. Thus, we recommend you hire one that’s familiar with the series LLC tax code.

Step 6: Get an EIN for Your Iowa series LLC Registration

Before you understand how to get a series LLC in Iowa, you will need to obtain a federal employer tax identification number (EIN or FEIN). This 9-digit number is used by the IRS to identify a business entity in the state.

You will need an EIN if you want to:

• Hire employees for the series LLC;
• Open a separate bank account;
• Use it for federal/state tax purposes.

The obtaining procedure is not required if you already have an existing business in the U.S. Note that all your child series will also require an EIN.

Even though the IRS doesn’t have any specific guidelines for obtaining an EIN, you will still need to:

• Go to the IRS website and fill out a form;
• Receive an EIN electronically or by mail.

In most cases, it takes 1 business day to process the form and receive the EIN. Make sure you use your series LLC's name combined with your child series name for each extra EIN.

Mail to:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: $0

LLC Iowa Cost: How Much Is a Series LLC in AI

The process of starting a series LLC in Iowa is not expensive. The basic costs include:

• Secretary of State fee for Certificate of Organization: $50;
• Registered agent services: from $49/year;
• Biennial report: $60.

If you need to form a series LLC in Iowa as a foreign entity, the filing fee is $100.

Also, the list of costs for forming a series LLC in Iowa includes the following services/documents:

Also, depending on your industry and geographical location, you may need certain business licenses or permits (on the federal, state, and local level) to conduct business in the state. In this case, the final cost of your series LLC will be higher.

Thus, to obtain a sales tax permit, you can visit the Iowa Department of Revenue’s website. Additionally, you go to IASourceLink to see a list of professions that require specialized business licensing.

To get more information about business licensing requirements, make sure you check with the local Iowa city/county government offices.

First Tasks After Creating a Series LLC in Iowa

Once you know how to create a series LLC in Iowa, you might need to complete these next steps:

• Open a business bank account. This is not a requirement of the state, however, such an account will guarantee the protection of your personal and business assets;
• Hire an accountant. Such an expert performs vital business functions, e.g. creating a business plan, establishing a wage fund, and so on;
• Applying for business licenses and permits. This step is necessary if your line of business is among the licensed businesses.

The Iowa Business License Information Center portal has all the licensing information you need. A list of licensed business areas includes:

• Transportation;
• Food, beverage;
• Manufacture of medicines;
• Sale of alcohol and tobacco products;
• Sale of firearms;
• Activities of investment consultants;
• Mining and quarrying;
• Drilling of wells;
• Nuclear power industry;
• Fishing;
• Hunting; 
• Agriculture and farming.

Another important step after starting a series LLC in Iowa is to get the right insurance policies for your business. The most popular insurance types in the state are as follows:

• General liability insurance;
• Professional liability insurance;
• Cyber liability insurance;
• Business owners' policy.

It is also recommended to obtain commercial real estate and auto insurance, as well as workers' compensation insurance. If you plan to temporarily suspend the company, business income insurance will also be required.

Keep Your Company Compliant

Once you officially open a series LLC in Iowa, your company can be considered fully operational. However, as an owner of a venture, you will also have a variety of obligations to various federal, state, or county agencies.

First and foremost, these include:

• Filing your biennial tax reports under Iowa Code Section 489.209;
• Tax requirements. Iowa law imposes sales and use tax. You will also need to pay Iowa income tax on any money you pay to yourself from the LLC;
• Iowa has a 6% sales tax for LLCs (if you're selling any goods or services). There's also the Iowa Corporate Income tax and state income tax.

To make sure your SLLC is keeping up with state and local taxes, you can go to the Department of Revenue's website to see a full list of taxes in the state.

Also, even if your series LLC has only a manager and no employees, paying FICA tax (federal payroll tax) is mandatory in Iowa.

It is also mandatory for a series LLC to pay federal taxes:

• Self-employment tax and federal income tax on any earnings you take out of your Iowa LLC;
• Franchise tax (for banks and trust companies);
• Other taxes. The list includes all social taxes: social security, unemployment, and health care.

Social Security tax is 12.4% at the IRS rate. The Medicare tax rate is 2.9%.

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