Iowa Certificate of Authority / Is it required?
Do I need an Iowa certificate of authority? The three lists compared
An outside entity that works in Iowa needs authority to operate, which costs $25 for a nonprofit or $100 for an LLC or corporation, and a nonprofit that skips it risks a civil penalty of up to $1,000. Iowa defines the question by exclusion in three separate chapters, each setting aside eleven activities. The lists are close but not the same.
Three chapters, one idea
The LLC chapter, the business corporation chapter and the nonprofit chapter each bar a foreign entity from operating until it holds authority, and each lists activities that do not count. The LLC and corporation lists match each other. The nonprofit list is its own text.
The eleven activities, compared
| Activity | LLC and business corporation | Nonprofit corporation |
|---|---|---|
| Lawsuits and settlements | Maintaining, defending, mediating, arbitrating or settling | Maintaining, defending or settling |
| Internal affairs | Meetings and other internal matters | Board and member meetings and internal matters |
| Bank accounts | Yes | Yes |
| Securities offices | Transfer, exchange and registration of securities, and trustees | Transfer, exchange or registration of memberships or securities, and trustees |
| Independent contractors | Selling through them | Selling through them |
| Orders accepted elsewhere | Orders that need acceptance outside Iowa | The same, by mail or through employees or agents |
| Borrowing and security | Indebtedness, mortgages and security interests | The same, in real or personal property |
| Collecting debts | Securing or collecting, enforcing, and holding property so acquired | Securing or collecting, and enforcing security |
| One-off deals | An isolated transaction not in the course of similar ones | A transaction completed within 30 days and not repeated |
| Owning property | Owning, protecting and maintaining | Owning, without more |
| Interstate commerce | Doing business in it | Transacting business in it |
The first column is Iowa Code 489.905 and 490.1505, the second is 504.1501(2). The nonprofit text introduces its list with "among others", which marks it as a sample.
The day count only a nonprofit gets
The nonprofit chapter attaches a figure to the one-off deal: finished inside 30 days and standing apart from any run of like transactions. The LLC and corporation lists give none. A nonprofit's three-week event in Iowa fits inside the nonprofit rule's thirty days; the LLC list gives no number, and it turns on repetition, not length.
What the nonprofit penalty looks like
A foreign nonprofit that works in Iowa with no certificate of authority cannot go to an Iowa court as plaintiff before it obtains one. The same bar binds its successor and anyone it assigns a claim to, and a court may hold a suit in place while it works out whether a certificate is required. The corporation is also liable for a civil penalty of up to $1,000, collectible by the attorney general. Its acts stand, and it keeps the right to defend a case filed against it.
What an LLC or corporation faces instead
The LLC and corporation chapters stop an unregistered entity from bringing a case, yet the chapters name no money penalty. Existing contracts stand, owners keep any liability limit, and a petition from the attorney general can halt the entity. That does not make the cost zero: a company that cannot sue cannot collect.
Situations by entity
A charity that holds a one-weekend fundraiser in Iowa. Probably within the thirty-day exemption if it will not repeat. A charity that opens a local office. Probably transacting business. An LLC with an Iowa-resident salesperson. Matches none of the eleven. A corporation that only ships goods ordered and accepted in its home state. The out-of-state acceptance item and interstate commerce may apply. Any entity that wants to sue an Iowa customer. It should be authorized first.
If you may already be over the line
Apply or register now. The guide shows the route for your type. For the earlier months, the exposure depends on your facts, and an Iowa business lawyer is the one to weigh it. Our fee for preparing the filing is $199.
A short test
- Does anyone work for the entity in Iowa week after week?
- Does it hold property, stock or vehicles here?
- Does it regularly sign contracts with Iowa customers or donors?
- Is every Iowa contact on the list for its entity type?
- Does one job run without an end date, or tend to lead to the next?
- Might the entity need to sue in an Iowa court?
Yeses to the first three questions, or to the fifth or sixth, point to filing.
Tax and authority are separate questions
The Code adds that its activity lists are silent on which contacts can bring an entity within Iowa's process, tax or other regulatory reach. An entity can need no authority and still owe an Iowa tax filing, or need authority and owe no tax.
Counting from the first day
Keep a note of the first day anyone worked for the entity in Iowa, and of the first invoice. When business began for legal purposes is part of the lawyer question above.
Registered agent: first year included, then $149 a year
$199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.
Questions about the three lists
Does a nonprofit pay a penalty for operating without a certificate?
The nonprofit chapter caps a civil penalty at $1,000, collectible by the attorney general.
Does an LLC face the same penalty?
The LLC chapter names no money penalty. It bars suing and allows an injunction.
Can an unauthorized entity defend a lawsuit?
Yes. All three chapters protect the right to defend.
Does Iowa put a number of days on a one-time job?
Only the nonprofit chapter does, and it uses thirty.
Our fee and Iowa's
We tell you which Iowa fee applies before you pay. An LLC and a nonprofit pay different amounts. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.
Get Iowa authority to operate
IA$199
+ the Iowa fee for your entity type, from $25
- The Iowa paper that fits your entity type, drafted from what you tell us
- The certificate of existence from home, ordered so it lands inside Iowa's ninety days
- An Iowa registered agent or office: ours, or your current one
- The filing sent and the state's record returned, with your report year marked
- Renewal: after the first year, the agent service renews at $149 a year
Sources
- Iowa Form 635_0106, nonprofit application for certificate of authority
- Iowa Form 635_0010, LLC foreign registration statement
- Iowa Code 489.903, foreign registration statement
- Iowa Code 490.1503, foreign corporation registration statement
- Iowa Code 504.1503, application for a certificate of authority
- Iowa Form 635_0110a, foreign profit corporation registration statement
- Iowa Code 490.122, business corporation fees
- Iowa Code 504.1502, consequences of transacting business without authority
- Iowa Code 489.902, registration to do business
- Iowa Code 490.1502, registration of a foreign corporation
- Iowa Code 504.1501, authority of a foreign nonprofit to transact business
- Iowa Code 489.905, activities that are not doing business
- Iowa Code 490.1512, action by the attorney general
Not sure which Iowa paper you need?
Name your entity type and home state and we will say what Iowa asks.