Should you form your corporation in Iowa? We've collected the relevant information that will help you make this decision.
Pros
Low cost of living
Low cost of doing business
Among "Best States to Live" (US News and World Report 2017)
Cons
Tax rate of 6-12%
Geographical distance from coasts
Cost of doing business
$50 filing fee / $30 bi-annual report (if filed online)
Privacy
Owner disclosure in original filing
Forming your corporation in Iowa
The name
In order to communicate to the public that your new business is incorporated, its official name will need to end with one of the following signifiers (or a relevant abbreviation): “incorporated”, “Company”, or “corporation.” In addition, it is required that the name of your business is not intentionally misleading to consumers, for any reason. Your company’s new name must also be completely unique, and not deceptively similar to any other organizations name or trademarks. Do a FREE name search now.
Board of directors requirements
You will need to form an official board of directors when incorporating in Iowa. Here are the states explicit regulations regarding these directors:
Required number of directors
Iowa corporations must have at least one director listed in their incorporation documents.
Age restrictions
Directors of corporations located in Iowa must be at least 18 years of age.
Residence restrictions
There are no residence restrictions imposed on the directors of C corporations in Iowa. However, S corporations are only allowed to have directors located in the United States.
What information needs to be included in the Articles of Incorporation?
Iowa does require the names or addresses of directors to be disclosed in incorporation documents.
Requirements for the Articles of Incorporation
The Articles of Incorporation is a document that must be filed during the incorporation process in every state. Here is the information that must be included in this document when filing in Iowa:
Stock information
Iowa requires the number of initial shares outstanding, and their par value, to be disclosed during the incorporation process. The number of outstanding shares does not affect initial state filing fees.
Officer information
The state of Iowa does not require officer information to be disclosed during the filing process.
Registered agent information
All Iowa corporations must have a registered agent on file, and submit their name and address (which cannot be a PO box). This agent will be required to be accessible during standard business hours, and act as the state’s point of contact with the company. Learn more about registered agents.
If your business is a professional practice
Professional service corporations are permitted to form under the professional corporation (PC) structure.
Corporate record keeping requirements
Corporations are required to keep formal documentation regarding several of their operations. These are the explicit record keeping formalities required by Iowa:
A copy of the Articles of Incorporation, bylaws, and their amendments
Records that detail the owners and class of all outstanding stock shares
The business address and names of all officers and directors
Formal, in-depth documentation of all stock related resolutions
Meeting minutes for all shareholder and director meetings.
A copy of all written communications with shareholders within the previous three years
A copy of the corporation’s most recent annual report
Formal documentation of all director and shareholder decisions, regardless of if they were made during a meeting or not.
Iowa Corporate taxation and fee requirements
There are several tax and fee requirements that must be addressed by corporations in Iowa. They are as follows:
Taxation
All states have complex taxation requirements. For more information regarding taxes in Iowa, it is advised that you visit the state’s official business related website.
Annual report requirements
Corporations in Iowa are required to file a bi-annual report every two years before April 1st on even-numbered years. The filing fee associated with this process is $30 if completed online, and $45 if done through other methods. Learn more about annual reports.
Tax identification numbers
Iowa requires an EIN (employee identification number) for all corporations that will have employees, and most banks will require one to open accounts. Iowa does not require corporations to obtain state tax ID numbers. Learn more about EINs.
Business license requirements
The business licenses and permits required in Iowa vary wildly depending on the county or municipality in which your new corporation is located. If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.
S corporation election
Iowa does not require a state-level S corp election, as they recognize any elections held at the federal level.
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