Incorporate in Iowa for FREE^*

Incorporation is the process of registering a business as a corporation and making it recognizable under law as its own legal entity. Incorporating a business can be a complicated process because each state has its own requirements for registering and operating a business as a corporation. Knowing the necessary steps and forms, however, will help keep you organized and stress-free. 

With our easy business registration service, you simply answer a few questions and we create your initial paperwork and file it with the state for you. The first business entity registration is free for Rocket Legal+ members—you pay only the state filing fees. Then, you can make and personalize all the legal documents you need for your business. Store everything online in your Rocket Lawyer account.

What is a C-Corp? 

A C-Corp, or C-Corporation, is a common business entity type. More specifically, a C-Corp is a corporation taxed under Subchapter C of the U.S. Code. Under Subchapter C, corporations are subject to tax at both the corporate and individual level (sometimes called “double taxation”). Depending on the situation, this may result in lower or higher tax burdens for the shareholders. 

C-Corps allow for anyone to be an investor and for an unlimited number of shareholders and multiple share classes.

As with other types of corporations, C-Corporations provide a common and well-known legal structure for businesses and offer their shareholders some limited liability. Except for certain instances of fraud or misconduct, a shareholder is not liable for the debts or obligations of a corporation beyond the shareholder's investment into the corporation.

Corporations are treated as a C-Corp by default, unless another type of tax treatment is selected, such as an S-Corp.

What is an S-Corp? 

Like C-Corps, S-Corps provide a common and well-known legal structure for businesses and offer their shareholders some limited liability. However, S-Corps have two main differences from C-Corps: they are taxed differently and they have more restrictions with shares.

An S-Corporation, or S-Corp, is an IRS election that allows a company to be treated like an LLC for income tax purposes, that is, as a “pass-through" entity. Instead of income taxes being owed at both the company and individual level, the income of an S-Corp is only taxed at the individual level, which means it passes through the company directly to the owners and shareholders. Again, this may result in lower or higher tax burdens for the shareholders depending on the situation.

S-Corps have more restrictions regarding shares and shareholders than C-Corps. Specifically, S-Corps can have no more than 100 shareholders, only one class of shares, and only U.S. residents or citizens as investors.

One area of common confusion is what type of entity can elect S-Corp status. Remember that this election is simply a tax choice, not a governance or legal structure choice. Both limited liability companies (LLCs) and corporations can choose S-Corp status if they qualify under the IRS's guidelines.

There are similarities between an Iowa S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences in Iowa, however, come down to the following:

• Ownership Rules: A C-Corp is taxed as a separate entity from its shareholders. It pays corporate taxes on its profits, and its shareholders do not. However, its shareholders do have to report and pay income taxes on what the corporation pays them. S-Corps are "pass-through" tax entities. They pay no taxes at the corporate level, but shareholders do pay income tax on their shares of the corporation's profits.
• Documents: If you decide to incorporate as an S-Corp, make the election with the IRS by filing IRS Form 2553, Election by a Small Business Corporation. Get all your shareholders to sign it and then file it within two months and 15 days after the start of your corporation's first tax year. 

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following Iowa requirements:

• Your business name should end with "Company," "Corporation," "Corp.," "Incorporated," or an abbreviation of one of these terms.
• Your name cannot be deceptive. If you're selling cookies, don't name your company "Emilie's Hardware."
• Make sure your name is distinguishable from all other existing business names.

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

Each state has its own personnel requirements for incorporating. In Iowa, directors need to be at least 18 years of age and there is a required minimum of one director. There is no requirement that directors live in Iowa.

You must appoint a registered agent. A registered agent is the person or business designated by you to receive important tax, government, and legal documents for your corporation, including service of process of lawsuits. The agent needs to be available during normal business hours. Iowa requires that you include the name of your registered agent in your Articles of Incorporation, and that the agent have a physical address in the state of Iowa. We can help you designate your registered agent when you incorporate with us.

You must also include the below in your Articles of Incorporation in Iowa:

• The name and address of each incorporator.
• The names and addresses of the initial directors.
• The number of shares to be issued and the designation of each class.
• The par value for authorized shares.

Iowa requires the filing of additional paperwork along with your Articles of Incorporation, which includes filing a biennial report that is due between Jan. 1 and April 1 of the first even-numbered year after the calendar year of your incorporation. Failure to file the report can jeopardize your corporation's status.

Nearly every state has standard processing times, but not all provide expedited processing for corporations. In Iowa, there are a few fees that you may be charged when you register your business as a corporation. They include the following:

State fee: $50.

Rocket Lawyer filing fee: $0 $99.99.

• First filing FREE* for Rocket Legal+ members (excluding state fees).
• Get additional filings HALF OFF with Rocket Legal+.

Processing time: 2-28 days.

Note: The above state fees and processing times (including expedited processing fees and times) are provided as a summary and may or may not encompass various fees mandated by your state or local authorities. Your state may also change these fees and processing times over time and without notice. If you have questions, speak to a Rocket Lawyer Business Pro to understand the costs and processing times that apply to your specific filing.

Businesses can save up to $2,500 per year with a Rocket Legal+^™ membership. This calculation is based on total savings on an initial business registration and registered agent, trademark, and business tax filing services for Rocket Legal+ members (a total cost of $924.97) compared to Rocket Legal members (a total cost of $1,949.96). This is in addition to savings on the average cost of 5 hours for document preparation by a non-Rocket Lawyer network attorney at the average attorney hourly rate in the U.S. of $300 (an estimated cost of $1,500 when purchased without any form of Rocket Lawyer membership) compared to unlimited use of customizable business documents for both Rocket Legal+ and Rocket Legal members at no extra cost.

Yes – your new corporation does have to pay taxes. Before getting started, however, you have to apply for an employer identification number, or EIN, for IRS purposes. An EIN is similar to your Social Security number, but it's for a business. All corporations with employees require one. You will also need an EIN to open your corporate bank account.

Many business owners choose S-Corps as they are generally exempt from corporate income tax and there is no double taxation. A C-Corp offers more flexibility because you can have several classes of shareholders with different voting rights. However, electing a C-Corp may have additional tax implications.

Iowa requires that corporations create records to maintain their corporate status. Corporate Bylaws set forth your company's operating rules and define your corporation's structure. You don't have to file them with the state, but you'll have to provide them to banks, lending institutions, creditors, the IRS, and courts to prove that your corporation is valid and legitimate. Bylaws also help establish rules so you can keep your corporate assets and debts separate from your personal ones.

Keeping Corporate Minutes of your director and shareholder meetings is also mandated by the state of Iowa. Your minutes should be maintained at your corporate office with other records. The minutes keep track of all votes on your important business decisions and help to secure your corporate status.

We have more detailed information regarding Iowa's requirements for Bylaws and keeping Corporate Meeting Minutes. 

We wish you success with your new Iowa corporation! You can count on Rocket Lawyer for all the business, tax, and legal help you need at a price you can afford. 

If you are planning to operate in another state, you may need to register a corporation in that state. Rocket Lawyer can help you determine which states you should register in.

Other states may have their own rules for foreign corporations that originate in Iowa or domestic corporations that also operate in Iowa. Talk to an attorney to understand the legal and tax requirements for the state(s) in which you plan to operate.