Learn how to qualify your LLC to conduct business in Iowa.
If you own a company that was founded in a state other than Iowa, you must qualify or register it in Iowa in order to conduct business there. Here’s a rundown of the requirements for qualifying your international (non-Iowa) limited liability corporation (LLC) to conduct business in Iowa.
What exactly is a Foreign LLC?
If your LLC is founded in another state, it is referred to as a foreign LLC in Iowa. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. In Colorado, for example, an LLC founded in Arizona is a foreign LLC.
Business Transactions in Iowa
If you are “transacting business” in Iowa, you must register your foreign company with the state, according to Iowa’s LLC Act. What exactly does this mean? So, like other states, Iowa’s LLC Act does not define “transacting business” in connection to international registrations.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
The LLC Act in Iowa, as in other states, stipulates some actions that do not constitute doing business in the state. Among the objects mentioned are:
defending or settling a lawsuit dealing with internal LLC affairs such as holding member or manager meetings having a bank account in the state having an office, agency, or persons in the state for handling your company’s own securities selling through independent contractors soliciting or obtaining orders that require acceptance outside the state before they become contracts
Regardless of the latter list, the LLC Act specifies that holding income-producing property in Iowa constitutes doing business in the state. Check Section 489.803 of the Iowa Code for a detailed legal explanation of each of the listed objects, as well as the statement concerning income-producing property.
If your LLC’s only operation in Iowa is one or more of the things above, you should not be required to register with the state.
You must submit a Limited Liability Company Application for Certificate of Authority with the Iowa Secretary of State to register your company in Iowa. The application form may be downloaded on the SOS website.
To complete the form, you must supply the same information that you would need to incorporate an LLC in your home state. In particular, for an Iowa application, you must provide:
If different, the name your LLC will use in Iowa (your LLC’s name in Iowa must contain a phrase such as “Limited Liability Company” or an abbreviation such as “LLC,” and you must use a so-called fictitious name if your LLC’s original name or something very similar is already being used by another Iowa registered business).
the state in which your LLC was created the length of your LLC
the street location and postal address of your LLC’s registered office in Iowa the name of your LLC’s registered agent in Iowa
a declaration that the registered agent and office complies with Iowa Code Section 489.113
if your LLC is needed to keep an office in its home state, the street address of your LLC’s chief office; if no office is required in its home state, the street address of your LLC’s principal office
If your LLC is a series LLC, a statement addressing debts, liabilities, and duties pertaining to the series as opposed to the LLC generally, and an authorized signature are required.
According to the LLC Act, you must also submit the name, street address, and mailing address of at least one LLC member if the LLC is member-managed, or the name, street address, and mailing address of at least one manager if the LLC is manager-managed. However, the form provided by the Secretary of State does not contain a section for this information.
With your application, you must attach a certificate of existence or a similar document. The certificate should be granted by the Secretary of State (or a similar authority) in the state in which your LLC is formed. The certificate must be no more than 90 days old when you submit your application. The filing cost is one hundred dollars.
What Happens If You Do Not Sign Up?
If your LLC does business in Iowa without authorization, it cannot file a lawsuit there. Furthermore, the LLC is subject to a civil penalty of up to $1,000, and the Iowa attorney general may file an action to prevent your LLC from doing business in the state in the future. However, not being registered does not render your LLC’s obligations null and void or prohibit it from defending a lawsuit in Iowa. Furthermore, a member of the LLC is not personally accountable for the LLC’s debts, obligations, or other liabilities just because the corporation conducted business in Iowa without a certificate of authorization.
Creating an Iowa Foreign Corporation
The regulations and standards for international qualifying in Iowa are identical whether your company is structured as a corporation rather than an LLC. However, you will need to utilize a separate application form. For paperwork, information, and filing requirements for registering a foreign company in Iowa, see the Iowa Secretary of State’s website.