How to Register a Contracting Company in Iowa

Step one: decide who the legal owner is

The entity decision drives every later filing, so make it before you fill anything in. If you will operate as a sole proprietorship, there is no Secretary of State filing to make: that office states that sole proprietorships are filed with the County Recorder in the county where the individual plans to do business, on a Trade Name Application whose form is specific to that county. Contractors miss this constantly and then wonder why the state has no record of a business that has been trading for a year.

If you will form an LLC or a corporation, the Secretary of State is the filing office and the fee schedule is published line by line. A Certificate of Organization for an Iowa LLC is $50 under Iowa Code 489.201, and Articles of Incorporation for a profit corporation are $50 under 490.202. A business formed in another state that wants to work in Iowa files a Foreign Registration Statement instead, at $100 under 489.903 for an LLC or 490.1503 for a corporation. Amending a certificate or articles is $50; dissolving is $5.

The Secretary of State is candid about what it will and will not do for you. Its FAQ states that the office files these documents but "the staff is not permitted to give legal advice on what you should or should not file", and that ownership and membership changes are maintained in your own internal records because the office does not file that information. Choose the structure with an accountant or an attorney, not with the filing clerk.

Official sources: Iowa Secretary of State Business FAQs; Iowa Secretary of State Business Entity Forms and Fees; Iowa Secretary of State Business Services

Step two: clear the name, then reserve or file it

The Secretary of State runs a free Business Entities Search that lets you search by business name or by business number, and matches on the first letters or words entered, so a search for NOW returns NOW INC., NOWHERE INC. and NOW PUBLICATIONS INC. That breadth is useful: it shows near misses, not just exact collisions.

Read the office's own warning before you rely on a clear result. Its liability statement says the Secretary of State "is a filing repository, and makes no representation or warranty as to the correctness or completeness of the information contained in any filing", and that the office "does not determine the authority of a filer to make a submission". An empty search result is evidence that the state has no conflicting entity record. It is not a trademark search, and the office says separately that it cannot advise you on whether to file a trademark.

If you need to hold a name while you finish paperwork, a Reservation of Name is $10 and a Transfer of Reservation of Name is another $10. If you want a corporation or LLC to trade under a name other than its registered one, a Fictitious Name filing is $5. If you are a sole proprietor, that role is played by the county Trade Name Application instead.

Official sources: Iowa Secretary of State Business Entities Search; Iowa Secretary of State Business Entity Forms and Fees; Iowa Secretary of State Business FAQs

Step three: the DIAL contractor registration

Now register as a contractor, and note the order: rule 481-465.4(7) requires the unemployment insurance employer account number to be issued before you apply, so the Workforce Development account is a prerequisite rather than a parallel task. DIAL states that both in-state and out-of-state contractors need an Iowa unemployment insurance number to register "even with no employees".

DIAL requires registration by any individual or business construction contractor earning at least $2,000 a year from construction, and rule 481-465.3 puts the timing beyond argument: "Before performing any construction work in this state, a contractor shall be registered with the department." Each construction business with a separate federal identification number registers separately, and subcontractors are not covered by the general contractor's registration.

The application asks for the contractor name, the complete mailing address of the principal place of business, the business telephone number, the type of business entity, the name, address, telephone number and position of each officer if a corporation or each owner if not, workers' compensation documentation, the unemployment insurance account number, a NAICS code or description of principal products and services, and the fee or fee exemption form. Out-of-state applicants add the $25,000 bond on DIAL's form or a Department of Transportation prequalification letter. DIAL issues the number within 30 days, in the form of the letter C followed by six digits.

Official sources: Iowa Administrative Code 481 Chapter 465, Construction Contractor Registration; Iowa DIAL Contractor Registration; Iowa DIAL Contractor Registration and Renewal Guidelines; Iowa Code Chapter 91C, Construction Contractors

Step four: tax permits, and the biennial report you will forget

Register for tax accounts through GovConnectIowa or the Iowa Business Tax Permit Registration form 78-005. The permits available through that single registration include sales and use tax, which covers the construction equipment tax, automobile rental, hotel and motel and the 911 surcharge, plus withholding tax, water service excise tax and fuel tax. The Department of Revenue states that "These permits are free of charge."

Your filing frequency is assigned by volume. Under $1,200 of sales and use tax a year files annually, due on or before January 31 following each calendar year. At $1,200 or more a year the return is monthly, due on or before the last day of the following month, filed and paid electronically through GovConnectIowa. A seasonal frequency exists for businesses collecting $1,200 or more in four or fewer months a year. Construction equipment taxpayers file monthly regardless of the amount collected.

Then diary the report that has nothing to do with construction and quietly kills companies anyway. Iowa entities file a BIENNIAL report, not an annual one. Profit corporations file in even-numbered years for $60. LLCs file in odd-numbered years for $30 online or $45 on paper. Miss it and the entity goes inactive: the Secretary of State's FAQ describes reinstatement as the remedy "If your entity went inactive due to failure to file a biennial report". The two Secretary of State pages give the deadline one day apart, April 1 on the fee schedule and March 31 in the FAQ, so file in the first week of March and the difference never matters.

Official sources: Iowa Department of Revenue Business Permit Registration; Iowa Department of Revenue Filing Frequency and Return Due Dates; Iowa Secretary of State Business Entity Forms and Fees; Iowa Secretary of State Business FAQs

Recheck the official source before you file or sign

Iowa's own pages disagree with each other in at least four places that this guide names rather than smooths over, so treat any summary, including this one, as a starting point and not as the rule. The Secretary of State publishes both "due by April 1st" and "filed by March 31" for the same biennial report. DIAL publishes both "Your registration must be renewed every year" and a three-year joint registration, while the administrative rule prices both a one-year and a three-year term. And DIAL's wording on the $25,000 bond reads as though employees trigger it, where the statute and the rule tie it to an out-of-state principal place of business.

Before you file an application, sign a contract, or price a job, open the current DIAL, Secretary of State or Department of Revenue page for your own situation, confirm the figure and the deadline, and keep a dated copy of what you read. Where a web page and a statute disagree, the statute and the administrative rule govern. Two more things this guide will not do for you: it states no city or county requirement, because DIAL says only to "Contact the city or county government for each project to determine local requirements", and it states no Iowa home improvement deposit cap or cancellation window, because no Iowa statute establishing one was located.

Official sources: Iowa Secretary of State Business Entity Forms and Fees; Iowa Secretary of State Business FAQs; Iowa DIAL Contractor Registration; Iowa Administrative Code 481 Chapter 465, Construction Contractor Registration; Iowa Code Chapter 91C, Construction Contractors