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How to Start a Business in Iowa

Are you planning on starting a new business in the state of Iowa, but having some trouble getting started? Are the endless websites and paper trails making you feel overwhelmed? That happened to us, too.

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With a very low cost of living, affordable housing, and a great public education system, Iowa has a host of attributes that make it attractive for both living and starting a business. Tax incentives for businesses, an impressive Iowa Startup Accelerator, and good ol’ Midwestern work ethic make the “Hawkeye State” appealing to the new business owner.

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How to Start a Business

Starting a business can be both exhilarating and challenging. It requires your full attention and energy. It all begins with an idea, an observation that there is a problem and the belief that you have a new solution – or a better one. Allow us to walk you through the steps in this free guide: How to Start A Business.

General resources for starting a business in Iowa

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Fun facts about starting a business in Iowa

Famous business founded in Iowa: Pancheros Mexican Grill

Pancheros Mexican Grill is a chain of fast casual Tex Mex restaurants in the United States serving Mexican-style cuisine. The chain was founded in 1992 by Rodney Anderson when he opened two units: one in Iowa City, Iowa (near the University of Iowa campus), and one in East Lansing, Michigan (near the Michigan State University campus). There are currently 67 units throughout the country. Pancheros is known for making their tortillas on site, at the time the order is placed.

Famous inventor born in Iowa: Ed Yost

Paul Edward Yost (1919-2007) was born in Bristow, Iowa. He was the inventor of the modern hot air balloon and is referred to as the “Father of the Modern Day Hot-Air Balloon.” He worked for a high altitude research division of General Mills when he helped establish Raven Industries in 1956.

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Which type of legal structure is best for my business in Iowa?

We strongly recommend you incorporate, but you must consider the tax, legal, and liability implications carefully before deciding on the best structure.
At bizHUMM we strongly recommend you incorporate, but you must consider the tax, legal, and liability implications carefully before deciding on the best structure for your business.

Here are 5 helpful steps to help you determine the best legal structure:

Click one of the buttons below to learn more about the different types of business legal structures and how to start them in the state of Iowa.
LLC (Limited Liability Company)
A limited liability company, commonly called an "LLC," is a legal business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Steps to starting an LLC in Iowa:

  • Step 1 — Choose a name for your LLC.
  • Step 2 — File Articles of Organization.
  • Step 3 — Find a Registered Agent.
  • Step 4 — Prepare an Operating Agreement.
  • Step 5 — Comply with any publication requirements.
  • Step 6 — Comply with other tax and regulatory requirements.
  • Step 7 — File biennial reports.
  • Step 8 — Register foreign LLCs doing business in Iowa.

For help forming your LLC in Iowa we recommend CorpNet (they have fees for their service).
Alternatively, visit the Iowa Secretary of State website.

Other Iowa resources for LLCs:

Secretary of State Business Name Database: Search for the availability of your LLC name here.
File your “Application for Reservation of Name” here.
File your “Articles of Organization” here.
File your Biennial Reports here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your LLC here. If your LLC has more than one member, you must get an EIN, even if you have no employees.

Department of Revenue: If you will be selling goods or will have employees, you’ll need to register here.

Sole Proprietorship
A sole proprietorship is the simplest and most common structure chosen to start a business. It is an unincorporated business owned and run by one individual, with no distinction between the business and the owner. The owner is entitled to all profits, and is responsible for all the business’s debts, losses, and liabilities.

Steps to starting Sole Proprietorship in Iowa:

  • Step 1 — Name your business.
  • Step 2 — File a trade name report with the county recorder.
  • Step 3 — Obtain licenses, permits, and zoning clearance.
  • Step 4 — Get an Employer Identification Number (EIN).

For help forming your sole proprietorship in Iowa we recommend CorpNet (they have fees for their service).
Or, visit the Iowa Secretary of State website.

Other Iowa resources for Sole Proprietorship:

Secretary of State Business Name Database: Search for the availability of your business name here. A sole proprietor may use his or her own name, or an assumed business name.
File your “Application for Reservation of Name” here.

U.S. Patent & Trademark Office: Federal database for existing trademark registrations. Click on the “TESS” link to conduct a search.

Iowa Association of Counties: File your trade name report here, by searching for the county recorder’s office in the county where your business is located.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your business here. If you hire employees, you will need an EIN as a sole proprietor.

Department of Revenue: If you will be selling goods or will have employees, you’ll need to register here.

Partnership
A partnership is a business operation between two or more individuals who share both management and profits. The two most common types of partnerships are general and limited partnerships. Each partner contributes to all aspects of the business, and shares in the profits and losses of the business.

Steps to starting Partnership in Iowa:

  • Step 1 — Choose a business name.
  • Step 2 — File a trade name.
  • Step 3 — Create a partnership agreement.
  • Step 4 — Obtain licenses, permits, and zoning clearance.
  • Step 5 — Obtain an Employer Identification Number (EIN).

For help forming your partnership in Iowa we recommend CorpNet (there are fees for their service).
Alternatively, you can visit the Iowa Secretary of State website.

Other Iowa resources for Partnership:

Secretary of State Business Name Database: Search for the availability of your business name here. A partnership may use the surnames of the individual partners, or a fictitious business name.

U.S. Patent & Trademark Office: Federal database for existing trademark registrations. Click on the “TESS” link to conduct a search.

Iowa Association of Counties: File your trade name report here, by searching for the county recorder’s office in the county where your business is located.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your business here. You will need an EIN, whether you hire employees or not.

Department of Revenue: If you will be selling goods or will have employees, you’ll need to register here.

S Corporation
An S corporation (or S Corp for short) is a special type of corporation created through an IRS tax election. An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation. What makes the S corp different from a traditional corporation (C corp) is that profits and losses can pass through the shareholder’s personal tax return. Consequently, the business is not taxed itself.

Steps to starting S Corporation in Iowa:

  • Step 1 — Choose a corporate name.
  • Step 2 — Prepare and file Articles of Incorporation.
  • Step 3 — Appoint a registered agent.
  • Step 4 — Set up a corporate records book.
  • Step 5 — Prepare corporate bylaws.
  • Step 6 — Appoint initial corporate directors.
  • Step 7 — Hold your first Board of Directors meeting.
  • Step 8 — Issue stock.
  • Step 9 — Comply with Iowa biennial report requirements.
  • Step 10 — Comply with other tax and regulatory requirements.
  • Step 11 — Register foreign corporations doing business in Iowa.

For help forming your S corporation in Iowa we recommend CorpNet (they have fees for their service).
Alternatively, visit the Iowa Secretary of State website.

Other Iowa resources for S Corporation:

Secretary of State Business Name Database: Search for the availability of your corporate name here.
File your “Application for Reservation of Name” here.
File your “Articles of Incorporation” a href=”https://sos.iowa.gov/business/FormsAndFees.html#DPC490″>here.
File your Biennial Reports a href=”https://sos.iowa.gov/file/br/”>here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) here.

IRS S corporations: Specific instructions for your tax requirements as an S corp.

Department of Revenue: Register at this site to fulfill your corporate tax obligations.

C Corporation
A C corporation (or C corp), refers to any corporation that is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. From a legal standpoint, C corporations are separate entities that can sue and be sued. From a tax standpoint, they are separate taxpayers, paying tax at special corporate tax rates that differ from those applicable to individuals.

Steps to starting C Corporation in Iowa:

  • Step 1 — Name your corporation.
  • Step 2 — Prepare and file Articles of Incorporation.
  • Step 3 — Find a registered agent.
  • Step 4 — Set up a corporate records book.
  • Step 5 — Prepare corporate bylaws.
  • Step 6 — Appoint initial corporate directors.
  • Step 7 — Hold your first Board of Directors meeting.
  • Step 8 — Issue stock.
  • Step 9 — Comply with biennial report requirements.
  • Step 10 — Comply with other tax and regulatory requirements.
  • Step 11 — Register foreign corporations doing business in Iowa.

For help forming your C corporation in Iowa we recommend CorpNet (they have fees for their service).
Or, visit the Iowa Secretary of State website.

Other Iowa resources for C Corporation:

Secretary of State Business Name Database: Search for the availability of your corporate name here.
File your “Application for Reservation of Name” here.
File your “Articles of Incorporation” here.
File your Biennial Reports here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) here.

Department of Revenue: Register at this site to fulfill your corporate tax obligations.

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Why choose Iowa for my business?

  • 1

    Forbes 10 Best Cities For Starting a Business (2015)
    Cedar Rapids, Iowa ranks #6.
    “...while Cedar Rapids, Iowa, with a low cost of living and 3.8% unemployment–-well below the national rate of 5.5%–-rounds out the top five.”

  • 2

    State of Iowa Incentive Programs
    “The State of Iowa has many financial incentive programs available for businesses considering expanding or locating in Iowa. State assistance is provided in the form of loans and/or forgivable loans, based in part on job creation, capital investment, the ability to meet certain wage standards, quality of employment, and economic benefits for the state and local community.”

  • 3

    Grants and Tax Incentives
    Overview of some grants and tax credits in Iowa.

  • 4

    Iowa Startup Accelerator
    “The Iowa Startup Accelerator is an intensive program that matches tech-based startups, especially those in agriculture, health, education, manufacturing and transportation technology, with world-class mentors, Midwestern work ethic, seed funding and development expertise to take them from concept to successful launch in 90 days.”

  • 5

    IA Source Link: Women and Minority Owner Resources
    “Here in Iowa we understand the importance of diversity of ownership of our Iowa companies. We support women, minority, and disabled business owners with a number of highly specialized services and financing options to help ensure your success as operators in our state.”

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