H.F. 580 DIVISION I 1 IOWA START-UP BUSINESS INITIATIVE 2 Section 1. NEW SECTION . 9.11 Definitions. 3 As used in this subchapter, unless the context otherwise 4 requires: 5 1. “Business entity” means a business operating on a profit, 6 nonprofit, or cooperative basis formed or organized under the 7 laws of this state, as a partnership or limited liability 8 partnership under chapter 486A; limited partnership under 9 chapter 488; limited liability company including a professional 10 limited liability company under chapter 489; corporation under 11 chapter 490; cooperative association under chapter 499, 501, or 12 501A; or nonprofit corporation under chapter 504. 13 2. “Foreign business entity” means a business operating 14 on a profit, nonprofit, or cooperative basis, that is formed 15 or organized in another jurisdiction, including an entity 16 that receives authority from the secretary of state to 17 transact business in this state as a foreign limited liability 18 partnership as provided in section 486A.1102; foreign limited 19 partnership under section 488.902; foreign limited liability 20 company or foreign professional limited liability company 21 under section 489.802; foreign corporation under section 22 490.1503; foreign cooperative association under section 499.54 23 or 490.1503; foreign cooperative association under section 24 501A.221; or foreign nonprofit corporation under section 25 504.1503. 26 Sec. 2. NEW SECTION . 9.12 Business entities qualifying as 27 Iowa start-up businesses. 28 1. In order to qualify as an Iowa start-up business, 29 a business entity shall file an organic document with the 30 secretary of state which includes the following: 31 a. For a partnership, a statement of partnership authority 32 under section 486A.303. However, the statement must be filed 33 within six months from the date that the partnership first 34 acquired property as provided in section 486A.204. 35 -1- LSB 1167HV (2) 85 da/nh 1/ 6

H.F. 580 b. For a limited partnership, a certificate of limited 1 partnership under section 488.201. 2 c. For a limited liability company, a certificate of 3 organization under section 489.201. 4 d. For a corporation, articles of incorporation under 5 section 490.202. 6 e. For a cooperative association, the following: 7 (1) Articles of incorporation under section 499.40. 8 (2) Articles of organization under section 501.202. 9 (3) Articles of organization under section 501A.503. 10 f. For a nonprofit corporation, articles of incorporation 11 under section 504.202. 12 2. A business entity described in subsection 1 does not 13 qualify as an Iowa start-up business if any of the following 14 apply: 15 a. Another business entity or a foreign business entity 16 holds an equity interest in the business entity. 17 b. The business entity does not employ at least one 18 individual who works thirty-five hours per week or more. 19 c. The business entity is formed or organized by the same 20 person who formed or organized a business entity in the prior 21 twelve months. 22 d. Any other factor established by the secretary of state 23 exists. 24 Sec. 3. NEW SECTION . 9.13 Iowa start-up businesses —— fees. 25 A business entity qualifying as an Iowa start-up business 26 shall not be charged a fee that is otherwise required to be 27 paid to the secretary of state as a direct result of forming 28 or organizing a business entity with the secretary of state, 29 including fees associated with filing an organic document with 30 the secretary of state pursuant to the following: 31 1. For a partnership, a statement of partnership authority 32 under section 486A.1202. 33 2. For a limited partnership, a certificate of limited 34 partnership under section 488.1206. 35 -2- LSB 1167HV (2) 85 da/nh 2/ 6

H.F. 580 3. For a limited liability company, a certificate of 1 organization under section 489.117. 2 4. For a corporation, articles of incorporation under 3 section 490.122. 4 5. For a cooperative association, the following: 5 a. Articles of incorporation under section 499.45. 6 b. Articles of organization under section 501.105. 7 c. Articles of organization under section 501A.205. 8 6. For a nonprofit corporation, articles of incorporation 9 under section 504.113. 10 Sec. 4. NEW SECTION . 9.14 Rulemaking. 11 The secretary of state shall adopt rules as necessary in 12 order to implement and administer this subchapter. 13 Sec. 5. CODE EDITOR DIRECTIVE. The Code editor shall codify 14 the provisions designated for codification in this division of 15 this Act as new subchapter II of chapter 9. 16 DIVISION II 17 COORDINATING AMENDMENTS 18 Sec. 6. Section 486A.1202, Code 2013, is amended by adding 19 the following new subsection: 20 NEW SUBSECTION . 1A. Notwithstanding subsection 1, a fee 21 shall not be charged to an Iowa start-up business for filing a 22 statement of partnership authority under section 486A.303, or 23 any other document determined by the secretary of state to be 24 an organic document, as provided in section 9.13. 25 Sec. 7. Section 488.1206, Code 2013, is amended by adding 26 the following new subsection: 27 NEW SUBSECTION . 1A. Notwithstanding subsection 1, a fee 28 shall not be charged to an Iowa start-up business for filing a 29 certificate of limited partnership under section 488.201, or 30 any other document determined by the secretary of state to be 31 an organic document, as provided in section 9.13. 32 Sec. 8. Section 489.117, Code 2013, is amended by adding the 33 following new subsection: 34 NEW SUBSECTION . 1A. Notwithstanding subsection 1, a fee 35 -3- LSB 1167HV (2) 85 da/nh 3/ 6

H.F. 580 shall not be charged to an Iowa start-up business for filing a 1 certificate of organization under section 489.201, or any other 2 document determined by the secretary of state to be an organic 3 document, as provided in section 9.13. 4 Sec. 9. Section 490.122, Code 2013, is amended by adding the 5 following new subsection: 6 NEW SUBSECTION . 1A. Notwithstanding subsection 1, a fee 7 shall not be charged to an Iowa start-up business for filing 8 articles of incorporation under section 490.202, or any other 9 document determined by the secretary of state to be an organic 10 document, as provided in section 9.13. 11 Sec. 10. Section 499.45, Code 2013, is amended to read as 12 follows: 13 499.45 Fees. 14 1. A fee of twenty dollars shall be paid to the secretary 15 of state upon filing articles of incorporation, amendments, or 16 renewals. 17 1A. Notwithstanding subsection 1, a fee shall not be 18 charged to an Iowa start-up business for filing articles of 19 incorporation under section 499.40, or any other document 20 determined by the secretary of state to be an organic document, 21 as provided in section 9.13. 22 2. Except as provided in this section , the association shall 23 pay the fees prescribed by section 490.122 when the documents 24 described in that section are delivered to the secretary of 25 state for filing. 26 Sec. 11. Section 501.105, Code 2013, is amended by adding 27 the following new subsection: 28 NEW SUBSECTION . 3A. Notwithstanding subsection 3, a fee 29 shall not be charged to an Iowa start-up business for filing 30 articles of organization under section 501.202, or any other 31 document determined by the secretary of state to be an organic 32 document, as provided in section 9.13. 33 Sec. 12. Section 501A.205, Code 2013, is amended by adding 34 the following new subsection: 35 -4- LSB 1167HV (2) 85 da/nh 4/ 6

H.F. 580 NEW SUBSECTION . 1A. Notwithstanding subsection 1, a fee 1 shall not be charged to an Iowa start-up business for filing 2 articles of organization under section 501A.503, or any other 3 document determined by the secretary of state to be an organic 4 document, as provided in section 9.13. 5 Sec. 13. Section 504.113, Code 2013, is amended by adding 6 the following new subsection: 7 NEW SUBSECTION . 1A. Notwithstanding subsection 1, a fee 8 shall not be charged to an Iowa start-up business for filing 9 articles of organization under section 504.202, or any other 10 document determined by the secretary of state to be an organic 11 document, as provided in section 9.13. 12 EXPLANATION 13 This bill provides that a qualifying start-up business is 14 not required to pay a fee associated with filing an organic 15 document with the secretary of state. The form of the organic 16 document depends upon the type of business being formed or 17 organized, and includes a partnership (Code chapter 486A), 18 limited partnership (Code chapter 488), limited liability 19 company (Code chapter 489), corporation (Code chapter 490), 20 cooperative association (Code chapters 499, 501, and 501A), 21 or a nonprofit corporation (Code chapter 504). An organic 22 document differs based on the business entity being formed 23 or organized, but includes a statement of partnership, 24 a certificate of limited partnership, a certificate of 25 organization, articles of incorporation, or articles of 26 organization. 27 The bill provides that a business entity does not qualify 28 as an Iowa start-up business under certain circumstances, 29 including if another business entity or a foreign business 30 entity holds an equity interest in the entity (e.g., stock), 31 the business entity fails to employ at least one individual who 32 works a minimum of 35 hours per week, the business entity is 33 formed or organized by the same person who formed or organized 34 a business entity in the prior 12-month period, or any other 35 -5- LSB 1167HV (2) 85 da/nh 5/ 6

H.F. 580 factor established by the secretary of state. 1 The secretary of state is required to adopt rules necessary 2 in order to implement and administer the bill’s provisions. 3 The Code editor is required to codify the new provisions in 4 the bill as a new subchapter in Code chapter 9. The bill also 5 provides a number of coordinating provisions in each Code 6 chapter which requires a business entity to pay the secretary 7 of state fees for filing organic documents. 8 -6- LSB 1167HV (2) 85 da/nh 6/ 6