Secretary of State proposes incentive for Iowa startups

Iowa Secretary of State Matt Schultz wants legislation to allow him to give new startup Iowa business a break on incorporation and related filing fees one month per year.

Schultz wants to create an "Iowa start a business month," to promote business start-ups and the legal incorporation process.

Legislation introduced by Schultz would let his office write administrative rules allowing the reduction or waiving of fees required to organize a startup business in Iowa during the month.

In the statement issued Friday, Schultz said many Iowans start a business without creating a distinct business entity due to the cost.

"Unfortunately, this leaves Iowa entrepreneurs without the organization and financial protections provided by organizing as a business entity under Iowa law,” Schultz said.

A spokeswoman for the Iowa Secretary of State's office said the reductions would primarily be in such filing fees for articles of incorporation and certificates of organization.

The fees are not currently high. Filing a certificate of organization as a limited liability corporation, for instance, costs $50. Filing a certificate of a limited partnership costs $100.

The idea is still a good one, several business advocates and one entrepreneur said.

"It's a great idea to try to help people who want to start their own business," said Marissa Reed, who last month opened Mail Print & More at 650 W. Cherry St. No. 7 in North Liberty. She said many Americans want to get out of corporate America now and be their own boss.

Iowa City Area Chamber of Commerce President Nancy Quellhorst said business start-ups are burned by high front-end costs, and bank loans are less abundant than in the past, so anything to help startup businesses is welcome.

"It's can mean so much for a budding entrepreneur to recognize ways that we want to help," Quellhorst said.

The general idea appealed to Al Beach, director of the Kirkwood Small Business Development Center in Cedar Rapids, but "no business can wait to start on the month they declare."

"You can't wait on a good idea," Beach said, "and we're not talking about a lot of money."

He said the idea is a good one as a symbolic act, but he wishes it could be carried further.

Marion Economic Development Corp. President George Lake said he also likes the idea as long as it doesn't deprive local Iowa governments of needed revenue.

"Anything the state can do to facilitate new business start-ups and warmly encouraged by cities and economic development organizations," Lake said.