Starting a new business in Utah can seem overwhelming at first. While you’re likely excited about getting started and working with customers, if you’ve been doing your research, you know there’s a lot of paperwork and red tape to be tackled first.
It’s important to start on the right foot with all of the legalities taken care of correctly so that you can stay in compliance and not worry about these details moving forward. This is where ZenBusiness comes in. We can show you how forming a limited liability company (LLC) in Utah can be straightforward and affordable.
In this guide, we offer step-by-step instructions and the insights you need to make sure you’re doing it right. You will also learn how the right LLC service can support you through this process and provide value to your company once it’s up and running.
The 5 Steps to Form an LLC in Utah:
The primary requirement to tackle as you get your LLC in Utah off the ground is to file a Certificate of Organization with the Secretary of State. This sounds simple enough, but there are several important decisions to make before doing so. Once the filing is complete, you will need to look at creating an Operating Agreement, obtaining any necessary professional licenses, and setting your business up to file taxes at the federal, state, and local levels. To simplify the process of forming an LLC in Utah, we’ve put together a guide detailing each step and answering any questions.
Step 1: Name Your Utah LLC
At first glance, coming up with a business name might seem to involve nothing more than deciding on a name that sounds good to you, but there are other factors to consider, including:
- Make sure your LLC name is not already being used by someone else. To do this, visit the Utah Secretary of State website and do a business name search.
- Be sure to include the words “limited liability company,” “limited company,” or one of the allowed abbreviations: “L.L.C.,” “LLC,” “L.C.,” or “LC.” You may also abbreviate “limited” as “Ltd.” and “company” as “Co.”
- The name may not include the words “association,” “corporation,” “incorporated,” “partnership,” “limited partnership,” or “L.P.”
- You should also make sure that if you intend to have a business website, you can find available domain names that fit your chosen business name.
- Additional naming requirements can be found in the Utah Code 48-3a-108(8).
If you settle on your business name before you’re ready to file your Certificate of Organization, you may want to reserve the name, so it doesn’t get snagged. This requires filling out a simple form you can download from the Utah Division of Corporations and Commercial Code’s website and paying a $22 filing fee. The registration lasts for 120 days and can be renewed at the same price as needed. If you plan on filing right away, though, you can skip this step.
Another consideration is whether you want a DBA. A DBA or “Doing Business As” is another name you can use for your business. This allows you to do business under a name different from your official business name. Registering a DBA requires filling out a form and paying a $22 fee.
Note you’ll also want to check with the United States Patent and Trademark Office website to see whether your business name or logo is federally trademarked. Utah also has information on trademarks within the state.
Step 2: Appoint a Registered Agent in Utah
When filling out the Certificate of Organization, you need to appoint a Utah registered agent. A registered agent is a person or business (like a registered agent service) that can receive legal documents, such as lawsuits or summons, on behalf of a business entity. Business correspondence from the Secretary of State is also sent to the registered agent.
Requirements for registered agents in Utah include:
- A Utah street address.
- If the registered agent is a business, they must be registered with the Division of Corporations and in good standing. (If you use a commercial registered agent service, you will only need to indicate their name on the application since the remainder of their information is already on file.)
- Your company cannot serve as its own registered agent.
While you can act as your own registered agent on behalf of your company, there are reasons why that might not be the best idea. A registered agent’s personal information becomes public record, and being your own registered agent can lead to other complications within your LLC, as well. For example, it’s not the best look to receive service of process in front of customers.
Often, it’s a good idea to go with a registered agent service. The benefits of doing so include the reliability that comes with hiring an experienced service that makes it so you don’t have to worry about whether you’ll maintain your certificate of good standing.
Step 3: File Utah Certificate of Organization
Now that you’ve named your business and chosen a registered agent, it’s time to register it. This is done by filing the Certificate of Organization — commonly known as the Articles of Organization in other states — with the Utah Department of Commerce.
This can be done by filling out the appropriate form and paying a $70 processing fee. On this form, you will include:
- Your business name
- Your principal office address
- The name and associated information about your registered agent
- The names and addresses of any additional members or managers
For those who choose to mail the Certificate of Organization, you’ll want to send it to:
Utah Division of Corporations and Commercial Code
P.O. Box 146705
Salt Lake City, UT 84114
Registration can alternatively be completed through the OneStop Business Registration website (you’ll need to create an account).
Step 4: Create an Operating Agreement
Now that your business is registered, it is time to form an LLC Operating Agreement with all members. While it is not a legal requirement, it is highly recommended and can save considerable headaches down the road. An Operating Agreement is a document that clearly defines all of the rules for your business, including how it will be run. Information like whether members have the right to admit additional members, an explanation of the terms and conditions, and the circumstances, if any, under which the cessation of the membership of one or more members will result in the LLC’s dissolution should be included. The benefits of having an Operating Agreement include:
- Clearly defined rules for all to follow
- A clear succession plan should the owner or a partner leave the business
- Allows you to avoid some of the default rules of the state where the LLC was formed
- Can help secure funding from investors and lenders
- Can help resolve legal disputes in the event of a disagreement
Step 5: Apply for an EIN
Any LLC with employees or more than one member will need to obtain an Employer Identification Number (EIN). Largely needed for tax purposes, this acts as a Social Security number for your business and will allow you to file tax documents as needed. It can also help with things needed to run your business, like opening a business bank account. Obtaining an EIN is as easy as completing the application on the Internal Revenue Service (IRS) website.
How much does it cost to start an LLC in Utah?
The total cost of starting an LLC in Utah will vary, depending on your business needs, consulting fees, and licenses required. At an absolute minimum, you will need to pay the $70 filing fee to file your Certificate of Organization. You will also need to pay a $20 fee annually when you submit your required annual report/renewal form. Additional fees that may apply are as follows:
- $22 for reserving your business name or filing a DBA
- Fees for any required business licenses
- Fees for registered agent service
- Fees for assistance in writing an Operating Agreement
- Notary fees
What are the benefits of an LLC in Utah?
The benefits of forming a Utah LLC include:
- You get free one-on-one management consulting from Utah’s Small Business Development Center.
- Utah was ranked No. 3 on Forbes’s Best States for Business list in 2019 with high marks for labor supply, economic climate, and quality of life.
- The cost of doing business is 2% below the national average.
- Utah is one of the fastest-growing economies in the U.S.
How is a Utah LLC Taxed?
LLCs are considered “pass-through” entities, which means you will not have to pay both business tax and personal income tax. The LLC itself is not taxed; instead, the owners pay tax on their share of the LLC profits on their personal income taxes only. However, there might be additional taxes you need to pay to the Utah government. You will also need to pay federal, self-employment, and possibly payroll taxes to the IRS.
If your LLC sells goods and you collect sales tax, or if you have employees, you must register your LLC with the Utah State Tax Commission. A qualified tax professional can help you make sure you’re staying compliant with all tax laws.
Utah LLC FAQs
- What is the processing time to form my Utah LLC?
The processing time may vary, but you can expect it to be completed within seven to 10 business days. For forms filed online through the OneStop portal, the time will likely be less than for mailed-in forms.
- Do I need to file my Operating Agreement with the state of Utah?
While Operating Agreements do not need to be filed with the state, they should be kept in a safe location with other business documents since they are legally binding.
- What tax structure should I choose for my Utah LLC?
When you get your EIN, you will be informed of the different tax classification options. LLCs usually choose the default tax status, meaning that owners pay state and federal taxes on income earned from the business as part of their individual taxes. Larger LLCs, however, may opt to file taxes as a corporation.
- Does Utah allow a Series LLC?
A Series LLC is a limited liability company with more than one series of members, managers, or LLC interests having separate rights, powers, or duties with respect to specified property and/or obligations of the LLC. Any series may also have a separate business purpose. Utah is one of a handful of states that allows Series LLCs.
- Which licenses and insurance are required for an LLC in Utah?
All businesses in Utah are required to get a business license, but it’s acquired at the city or county level. Occupational and professional licenses can also be applied online. Licenses can be industry-specific and happen at the federal, state, and local level, so you’ll need to research what licensing your LLC needs. To learn about which business insurance might be required or advisable, visit the Utah Insurance Department’s Business Insurance page.
- How do I dissolve an LLC in Utah?
To dissolve an LLC in Utah, you must file a Statement of Dissolution.