GUIDE: GET MY BUSINESS ONLINE | STEP FIVE:
Register Your Online Business
If you already have started your business offline and are looking to grow it online, then registering your business probably isn’t necessary for you. However, if you sell products into other states through your website, you may be subject to collecting and remitting sales tax in the various states you sell. If you are just starting your business and haven’t registered it at either the state or county level, then this page is perfect for you!
In order to legally conduct business within the state of Iowa, you will need to register your business. Where you register is directly related to what kind of entity you are forming. For this brief overview, we will discuss two options: Sole Proprietorship and LLC. Please note that these are not the only options for you to choose from, nor is it a suggestion or recommendation of what entity you should or shouldn’t form. For more options, visit our general registration page or go to the Iowa Secretary of State’s website. We also have written informational blogs about forming both S Corps and C Corps you may find helpful.
The most simple entity to form is called a sole proprietorship. This is done by filing what’s called a Trade Name with your county recorder’s office. A sole proprietorship is an unincorporated business that is run by one individual who has no distinction between the business and the owner. So, what does this mean? It means that the business owner is entitled to all profits and is responsible for all of the business’s debts, losses and liabilities. Essentially whatever profit you make will be reported on your individual or personal tax return, and any debt or liabilities you take on are directly tied to you and not the business (because you are the business).
To register your business as a sole proprietorship, you will need to file what’s called a Trade Name Form with your county recorder’s office. This typically costs around $7 to file and should remain in effect until either you file to end the business or the recorder’s office revokes your filed form. To save you some time, we have found the recorder’s website for every Iowa county and have listed them out inside of our chatbot, Sprout, found in the bottom right corner of your screen. Feel free to open up Sprout, answer our quick three question survey, and follow the onscreen instructions to find your county recorder’s contact information.
Survey > Register My Business > Sole Proprietorship > Select Your County Name
Limited Liability Company (LLC)
Domestic and Foreign Limited Liability Companies both register with the Iowa Secretary of State’s office. It costs $50 to file your application if you are a Domestic LLC (Iowa company) and $100 if you are Foreign LLC (non Iowa company). This type of entity has different protections as it relates to debts/liabilities made by the members of the LLC, and may affect how you report income / losses on your taxes. To view the steps to register as an LLC, and other important information about maintaining your status as an LLC, visit our Business Structures and Registration page. Read this helpful blog for more information about LLCs.
Frequently Asked Questions
Do you have questions about registering your business? You should consider checking out our Resource Navigator. It houses the contact information of 400 of our most helpful partners from across the state who provide free to low-cost assistance to Iowa entrepreneurs and small business owners.
Q: Do I need to register as a business if I am selling things online?
A: In general, yes. If you are operating like a business, regardless of online/offline status, you more than likely will need to register with the appropriate state or local government. Make sure you consult with a tax or legal professional before making a decision.
Q: Do I need to register my business in other states that I sell to?
A: This depends entirely on the state you are selling products into. Some states may say if you are under $X revenue annually within their state, you do not need to collect and remit sales tax and or even register as a foreign entity. Make sure you check with each state to understand their laws, requirements, and obligations. See the Collect Sales Tax step for more details.
Q: My website is used as a hobby, do I have to create a business to run it?
A: No. If you are not making taxable sales on your website, you do not need to register a business for said website. If you are making taxable sales in Iowa, though, it’s a good idea to see if you actually do need to collect sales tax or not.
Want to save this information for later?
Enter your name, email and ZIP Code below and we will send the Start an Online Business Guide to your email inbox for FREE!
NOTICE: The information included on this website is to be used only as a guide. It is not intended to cover all provisions of the law or every taxpayer's specific circumstances.
GUIDE: START AN ONLINE BUSINESS
Connect with Us!
Get insights, inspiration and events to help you start, grow and accelerate businesses in Iowa.