The needs of every business owner are unique, as are the laws and restrictions set upon businesses in each state. Business law in Iowa has a number of regulations that control how a person or group of people can organize a business. It's very important to choose the type of business organization that best fits the needs of your particular business. Reviewing the options carefully is the first step - from there, you can fill out the forms yourself or enlist the aid of a business lawyer to help clarify any questions you have.
The Simplest Type of Business
One of the most common and simplest forms of business organization is the sole proprietorship. This uncomplicated option is relatively easy to manage and business law in Iowa doesn't put many regulations on it, nor require major fees to instate it. In fact, no Iowa statutes govern the formation of this type of business. In a sole proprietorship, the person who owns the business is essentially inseparable from it, meaning the owner is completely liable for any debts the business incurs.
Partnerships for Two or More Owners
General partnerships are a form of business where two or more people own and control the business. A business law in Iowa known as Iowa Uniform Partnership Act governs the creation and regulation of this type of business. Partnerships are similarly easy and uncomplicated compared to sole proprietorships - partners don't even need to sign a contract (though this is recommended). In a partnership, all partners share liability.
Certain partnerships are limited partnerships or limited liability partnerships. In limited partnerships, the general partner controls the day-to-day workings of the business while the limited partners provide financial support. In limited liability partnerships, things are operated as in a general partnership, but partners are not help liable for misconduct perpetrated by other partners.
The Advanced Business Type: Corporations
The most advanced type of business is the corporation. These business types are more heavily regulated and expensive to set up. There are a number of different types of corporations, such as for profit corporations, nonprofit corporations, and professional corporations. All corporations are separate entities from the people that own them, which limits the owners' liability in the business. Corporations operate by selling stock, which are pieces of ownership in the company, to shareholders. The shareholders then elect a board that is responsible for keeping the business running.
