Starting a business begins with an idea, but one phase of turning that idea into reality requires officially registering the business.
If you’re feeling uncertain about the forms and agencies involved, you’re not alone. To help, this guide outlines the steps to register your business in Utah. We’ll take you through each stage, from deciding on your business type to securing the appropriate licenses, allowing you to move forward with confidence and focus on launching.
Related: Starting A Business In Utah Checklist
Step 1: Business Structure
The first step in registering a business in Utah is selecting a business structure (or business entity). A business structure (or business entity) is how a business is legally owned, operated, and taxed. Choosing the right type of business entity is important, as it will determine the owners’ liability, the amount of taxes paid, and other factors.
The four most common types of business entities are sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).
Related: Comparison of Business Structures
A sole proprietorship is the simplest form of business structure, where one person owns and runs everything. There’s no separation between the owner and the business, meaning the owner is personally responsible for all debts and legal actions against the business. Taxes are straightforward as owners report business income on their personal tax returns.
Related: How to Start a Sole Proprietorship in Utah
A general partnership is similar to a sole proprietorship but with two or more people running the business. Partners share profits and losses, and like sole proprietors, they are personally responsible for the business’s debts and legal issues. Partnerships also don’t pay taxes as a separate entity; instead, each partner includes their share of profits or losses in their personal tax filings.
A corporation is a more complex entity separate from its owners, which provides personal liability protection. Owners, known as shareholders, are not personally responsible for the corporation’s debts or legal problems and can raise money by issuing shares of stock. The downside is that this entity has more administrative requirements, like board meetings, appointing a Utah registered agent, issuing share certificates, etc.
Related: How to Form a Utah Corporation
Finally, a Limited Liability Company (LLC) blends elements of sole proprietorships, partnerships, and corporations. Owners (members) have limited personal liability for business debts and actions. The LLC does not have as many of the corporation’s administrative burdens and has the greatest tax flexibility of the four entities.
Related: How to Form a Utah LLC
Step 2: Business Name
After deciding on a business structure, the next step for many entrepreneurs in Utah is to register a business name.
Sole proprietors and general partnerships commonly need to register their business names. If these entities want to operate under a business name other than the full name of the owner(s), they will need to file for a Utah Assumed Business Name, also known as a “Doing Business As” (DBA).
For example, John Smith, a sole proprietor in Utah, plans to open a ski equipment rental shop in Park City. If John wants to operate under his own name, he could simply use “John Smith” as his business name without any additional registration. However, he might prefer a more descriptive name for his business, such as “Summit Ski Rentals” for his shop.
To use this name, he’ll need to conduct a Utah business name search to make sure the name he wants to use is available. If it is, he will register the business name through the Utah Division of Corporations and Commercial Code.
Corporations and LLCs, on the other hand, won’t typically register for an assumed name, as they register their legal name during formation. They might choose to register an additional name if they have another business or brand name that they want to operate with the liability protection of their current entity.
Step 3: Federal Employer Identification Number
After choosing a business name, many Utah entrepreneurs move next to obtaining a Federal Employer Identification Number (FEIN), also known as an Employer Identification Number (EIN). This unique nine-digit identifier, issued by the Internal Revenue Service (IRS), serves as a federal tax ID for your business.
You’ll need an EIN if:
- Your business has employees
- You’ve formed a corporation, partnership, or multi-member LLC
Sole proprietorships and single-member LLCs without employees can use the owner’s Social Security Number for tax purposes.
Acquiring an EIN is a straightforward, cost-free process. The most efficient method is to apply online through the IRS website, which typically takes just a few minutes. Alternatively, you can submit your application by mail or fax.
Step 4: Professional & Industry Licensing
In Utah, there are several types of professions and industries that require licensing.
A professional license is a credential issued by a state licensing board or agency that permits an individual to practice a particular profession legally. The Utah Division of Occupational and Professional Licensing (DOPL) is the primary licensing authority.
Common professions requiring licensing in Utah include:
- Accountants
- Electricians
- Handymen
- Hunting guides
- Landscapers
- Contractors
- Real estate agents
- Nurses
- Cosmetologists
This is an overview of common professions that require licensing. For specific fees, requirements, and application information, visit the Utah Division of Occupational and Professional Licensing website.
In addition to professional licenses, many businesses in Utah require industry-specific licenses or permits to operate legally. These licenses ensure compliance with state regulations and public safety standards.
Some examples of industry-specific licenses in Utah include:
- Food Service: Restaurants, food trucks, and other food establishments need a Food Service Establishment Permit from the Utah Department of Health.
- Alcohol Sales: Businesses selling alcohol require licenses from the Utah Department of Alcoholic Beverage Services, with different types available for restaurants, bars, and retail stores.
- Child Care: Daycare centers and preschools must obtain a Child Care License from the Utah Department of Health and Human Services.
- Auto Dealerships: New and used car dealerships require a Motor Vehicle Dealer License from the Utah Motor Vehicle Enforcement Division.
Each industry has its own specific requirements and application processes. Business owners should research the regulations pertaining to their particular field and contact the appropriate state agencies for detailed information.
Step 5: Sales Tax Permit
Businesses selling or leasing tangible personal property or providing taxable services in Utah must obtain a Utah Sales Tax License, which is necessary for most Utah businesses.
Who needs to register:
- Retailers of goods
- Service providers offering taxable services
- Businesses leasing tangible personal property
- Out-of-state sellers meeting certain economic thresholds
The Utah State Tax Commission handles sales tax registration, and businesses can apply online through the Taxpayer Access Point (TAP) system or by submitting a paper application.
Step 6: Sales Tax Exemption Certificate
Businesses that purchase goods for resale often benefit from obtaining a Utah Sales Tax Exemption Certificate, commonly known as a Resale Certificate. This document allows retailers, wholesalers, and manufacturers to buy inventory without paying sales tax at the time of purchase. These businesses will collect sales tax from the end consumer when the product is sold, rather than paying it on their initial purchase.
Who needs a Sales Tax Exemption Certificate:
- Retailers purchasing inventory to sell to customers
- Wholesalers acquiring goods to sell to other businesses
- Manufacturers buying materials to create products for sale
To obtain a Sales Tax Exemption Certificate, businesses must first register for a Sales Tax License with the Utah State Tax Commission. Once registered, they can generate it through their Taxpayer Access Point (TAP) account or by filling out Form TC-721, “Exemption Certificate.” This form should be provided to suppliers when making tax-exempt purchases for resale.
Step 7: Local Business Licenses
While Utah doesn’t have a state-wide general business license, many cities and counties require local business licenses. Here’s an overview of common local licenses:
- General Business License: Most cities in Utah require a general business license for operations within their jurisdiction. This license ensures businesses comply with local regulations. In Salt Lake City, the Business Licensing Division issues these licenses.
- Food-based Business License: Food establishments often need specific local licenses and health department approvals. The Business Licensing Division issues food handler permits and food establishment licenses in West Valley City.
- Other Specific Licenses: Many cities have special licenses for specific business types. For instance, Ogden City requires a separate license for businesses offering massage therapy services, which is issued by its Business License Division.
It’s important to note that licensing requirements can vary significantly between different cities and counties in Utah. Business owners should always check with their local city or county government for specific licensing requirements applicable to their location and type of business.
Step 8: Local Building & Zoning Permits
Before registering your business and committing to a property purchase or lease in Utah, it’s important to understand the building and zoning requirements that may affect your business location. These regulations ensure that businesses operate in appropriate areas and that buildings meet safety standards. Here’s an overview of the main requirements you might encounter:
Zoning Regulations: Zoning laws determine how property in specific areas can be used. Before establishing your business, check with your local city or county planning department to ensure your intended use aligns with the zoning of your chosen location. This also applies to home-based businesses, as some residential areas may restrict commercial activities.
Building Permits: If you plan to construct a new building or make significant alterations to an existing one, you’ll likely need a building permit. Your city or county’s local building department or division typically handles these permits.
Certificate of Occupancy: Many Utah municipalities require a Certificate of Occupancy before a business can operate in a building. This document certifies that the building complies with all building codes and zoning laws and is safe for occupancy. You’ll usually obtain this from the same department that issues building permits.
Sign Permits: Many localities require separate sign permits if you plan to install business signage. These ensure that signs meet local standards for size, placement, and lighting. Check with your local planning or building department for specific requirements.
By understanding and addressing these requirements early in your business planning process, you can avoid potential delays or issues when setting up your business location. Always consult with your local city or county offices for the most up-to-date and specific information for your area, as requirements can vary across different municipalities in Utah.
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