Are you interested in starting your own business but not sure what steps to take to form a Utah LLC? If so, read on for our guide, where we’ll walk you through the basics and answer some common questions!
Related: Starting A Business In Utah Checklist
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Steps to Form a Utah LLC
Step 1: Choose a Name for the LLC
The first step in forming a Utah Limited Liability Company is to make sure the name you want is available.
It’s critical to do a name search before registering an LLC name, as the name of each LLC must be distinguishable from other entity names registered in the state of Utah. The Department of Commerce makes it easy to search and verify if your LLC name is available. Here is more information on how to search available Utah LLC names.
In addition to the name being unique, the entity designator (identifier used at the end of the business name) must be either:
- Limited Liability Company
- Limited Company
- Limited Liability Co.
- Limited Co.
- Ltd. Liability Company
- Ltd. Company
- Ltd. Liability Co.
- Ltd. Co.
- L.L.C.
- LLC
- L.C.
- LC
A comma may be used after the business name and before the designator. “Wasatch Front Innovations LLC” and “Wasatch Front Innovations, LLC” are both acceptable.
Step 2: Appoint a Utah Registered Agent
Every LLC in Utah needs a registered agent, who is simply someone with a Utah street address who will be responsible for any legal correspondence, most often if the business is served papers in the event of a lawsuit.
The basic requirements to be a Registered Agent in Utah include:
- The agent must be a Utah resident at least 18 years of age or a commercial registered agent service with a registered office in the state.
- The agent must have a physical address in the state (PO Boxes aren’t allowed).
- The agent must generally be available during normal business hours at the address provided to receive service of process.
LLC owners in Utah have two primary options for fulfilling this requirement. Many choose to act as their own registered agents, particularly if they reside in the state. However, some opt to hire a professional registered agent service. This choice is often preferred in two scenarios: when the LLC owner lives out of state or wants to keep their personal address off public records. Professional services offer the added benefits of ensuring compliance with state regulations and managing important legal correspondence, making them an attractive option for those seeking convenience and privacy in their business operations.
Related: How To Appoint A Utah Registered Agent
Step 3: File the Utah LLC Certificate of Organization
The paperwork to officially create an LLC in Utah is called the Certificate of Organization (called the Articles of Organization in most states). To submit the paperwork, file online through the Utah Department of Commerce, Division of Corporations and Commercial Code OneStop website.
Related: How To Fill Out The Utah Certificate Of Organization
When filling out the Certificate of Organization, a few sections and terms can be confusing at first glance. Let’s go over a few of these sections to help get your LLC started right.
Principal office address: In this section, enter the street address, city, state, and zip code of the initial principal office. This address must be in Utah and can be the LLC’s physical address or the address where the business records are stored. You may not use a PO Box for the designated office.
Signature of organizer: An LLC Organizer is someone involved with forming the Certificate of Organization. The Organizer may or may not become an LLC member, such as a mentor, attorney, or accountant, but any LLC member can be listed as an organizer.
Duration: This is another optional section. Here, you can indicate how long the LLC will remain in existence. Most LLCs will choose a Perpetual duration; however, some businesses (usually investment-related) will have a specific closure date. By skipping this section, your LLC will be Perpetual by default.
Business description: This is another optional section where you can provide some basic information about the business. Some filers will include an open-ended business purpose, such as, “This business will engage in any lawful business activity for which a Limited Liability Company may be organized in Utah.”
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What To Do After Forming A Utah LLC
Once the LLC has been formed, there are a few additional steps to take. Below is a list of the most common tasks.
Prepare a Utah LLC Operating Agreement
The LLC operating agreement is a document that governs the framework of an LLC and covers ownership rights, member responsibilities, how profits and losses are distributed, and more.
Most states do not require an LLC (Utah included) to have an operating agreement, but it is still worth considering. Without an operating agreement:
- The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
- Member’s personal liability protection may be diminished.
- Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.
Obtain an EIN
If the LLC will hire employees or is owned by more than one member, an EIN is required.
The EIN or Employer Identification Number (also referred to as a Federal Employer Identification Number, FEIN, or Federal Tax ID Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Like an individual’s social security number, the EIN identifies business entities for tax purposes.
Related: How To Register For An EIN
Open an LLC Bank Account
Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.
Several documents will be needed to open a business bank account, such as:
- A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
- Copies of the original formation paperwork from the state showing the official creation of the LLC.
- Driver’s licenses of the members.
- Occasionally, the bank will request a Utah Certificate of Good Standing to prove that the LLC is active and in good standing with the state.
Apply for Business Licenses and Permits
Depending on what your business does and where it is located, various business licenses and permits will likely be needed before starting the business. Some common registrations include:
- Business license: Some cities require businesses to obtain licensing before starting.
- Professional license: Certain services, such as barbershops, accountants, salons, and others, must be licensed.
- Sales tax license: To sell products and certain services, you must register for a Utah sales tax license with the Utah State Tax Commission.
Related: How To Register A Business In Utah
File Utah LLC Annual Reports
LLCs are required to file a Utah LLC Annual Report with the Utah Department of Commerce. The annual renewal cost is $18 and is due by the anniversary date of the LLC formation. For example, if the LLC were formed on February 1, 2024, the first annual report would be due on February 1, 2025.
File the Beneficial Owner Information Report
Beginning in 2024, any individual who owns at least 25% or has “substantial control” of an LLC or corporation in Utah or any other state must file the Beneficial Ownership Information (BOI) form with the Financial Crimes Enforcement Network (FinCEN).
Utah LLC FAQs
Is the LLC right for you?
Deciding if an LLC is right for your Utah business hinges on several factors. An LLC offers personal asset protection, meaning your personal stuff is generally safe if your business faces legal trouble. It also brings tax flexibility, letting you choose how you’re taxed, which can save money.
While LLCs offer many benefits, they’re not a one-size-fits-all solution. Here are scenarios where an LLC might not be the best choice:
Higher startup costs: Forming an LLC is more expensive than a sole proprietorship or general partnership. For someone just testing a business idea, these costs might be prohibitive.
Investment needs: If you plan to raise capital from investors, a corporation might be more appealing. Investors often prefer corporations for their familiar structure, stock options, and potential tax advantages. LLCs can issue membership interests, which is less common and might not attract certain investors.
Complexity and formality: While LLCs are praised for their simplicity, they still require ongoing maintenance, like annual reports and tax filings. For someone looking for an even simpler option, a sole proprietorship or partnership might be better for starting a very small, low-risk business.
How much does it cost to start an LLC in Utah?
The state filing fee to create an LLC with the Utah Department of Commerce is
$54.
How long does it take to start an LLC in Utah?
It normally takes the Utah Department of Commerce to process LLCs in 1-2 business days for online filings and 7-10 business days for mailed in forms.
How much does it cost to renew an LLC in Utah?
LLCs in Utah submit an annual report and a $18 state filing fee each year.
What is a Foreign Limited Liability Company?
A foreign LLC isn’t a special type of LLC. Instead, it’s an LLC formed in another state (domestic LLC) that wants to operate in Utah. Physically operating means having a presence, such as having an office or hiring an employee.
What is a Professional Limited Liability Company?
Businesses that require occupational licensing in Utah, such as accountants, architects, veterinarians, etc., can file for a Professional LLC (PLLC) instead of an LLC.
What is a Series LLC?
A Series LLC in Utah is a unique form of Limited Liability Company that isn’t available in most states. It allows for the creation of multiple “series” or divisions under the umbrella of a single LLC. Each series operates independently with its own assets, liabilities, and members, acting almost like a separate entity but within the structure of one main LLC. This setup is particularly beneficial for businesses that manage multiple properties or projects and wish to keep each of their liabilities distinct from the others.
Related: What is a Series LLC?
Can you have a single-member LLC in Utah?
An LLC in Utah can be operated by one individual or many. An LLC owned by one person is referred to as a single-member LLC.
