USA - IOWA Law and Practice Contributed by: David M Erickson, Robert J Douglas, Jr, Christopher S Talcott and Amy S Montgomery, Dentons Davis Brown
interest holders when recorded and generally enforceable under property and contract law.
an entity seeks to acquire an interest in Iowa agricultural land. In addition, the similar restrictions of Iowa Code Chapter 9I must be evaluated where a non- resident alien seeks to acquire an interest in an entity owning Iowa agricultural land. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity The main features of the constitution and gov - ernance of entities created under Iowa law are similar to what will be found in other states. General Partnership A general partnership is an exception to the gen - eral rule that a filing with the Iowa Secretary of State is required to create the legal existence of the entity. Rather, a general partnership is cre - ated by the association of two or more persons to carry on, as co-owners, a business for profit. The details of the partners’ rights to manage the partnership and share in its profits and losses are governed by a written or unwritten partner - ship agreement and Iowa Code Chapter 486A. The main drawbacks of a general partnership structure are less flexibility in structuring the relations among partners and no limitation of liability – that is, all partners are jointly and sev - erally liable for obligations of the partnership. Limited Partnership A limited partnership is formed by filing a certifi - cate of limited partnership with the Iowa Secre - tary of State. The details of the partners’ rights to manage the partnership and share in its profits and losses are governed by a written or unwritten partnership agreement and Iowa Code Chapter 488. The difference between a general and a lim - ited partnership is that the latter includes two classes of partners – one or more general part -
5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets The following entities may be formed under Iowa law by investors and all are empowered to own and operate real estate assets: • general partnerships (GPs); • limited partnership (LPs); • limited liability partnerships (LLPs); • limited liability limited partnerships (LLLPs); • limited liability companies (LLCs); and • business corporations. Limited liability companies are the most common vehicle to hold real estate investments in Iowa, given the combination of tax benefits and the flexibility available under the statute in design - ing the investment/ownership and management structures of the entity. Entities formed under the laws of other states may own real estate assets in Iowa, but investors should take care to evaluate requirements to obtain a certificate of authority to do business in Iowa for the foreign entity depending on the nature of activities being undertaken. Investors seeking to acquire agricultural land in Iowa must be mindful of the restrictions of Iowa Code Chapter 9H. This chapter restricts the authority of most entity forms to own and operate Iowa agricultural land, subject to pre - scribed exceptions for family entities, small enti - ties and acquisitions of land for non-agricultural purposes. The details of Chapter 9H must be evaluated on a case-by-case basis whenever
1191 CHAMBERS.COM
Powered by FlippingBook