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When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming as an LLC is often the best option for a number of reasons.
An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.
Forming an LLC in Utah follows a relatively typical process, with a couple of minor variations compared to other states. To avoid a misstep in the filing process, follow these steps to start an LLC in Utah, and refer to the checklist at the bottom of the post to familiarize yourself with the legal and financial requirements for LLCs in the state.
Starting an LLC in Utah step-by-step
1. Select a name for your Utah LLC
Follow naming requirements
There are 2 major guidelines to follow when naming your LLC in the State of Utah:
- An LLC’s name must be distinguishable from the names of existing business entities on file with the Utah Division of Corporations and Commercial Code.
- An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “LLC”, “L.L.C.”, “LC”, or “L.C.”
Check name availability
Confirm that your chosen LLC name is available in Utah using the Division of Corporations and Commercial Code Business Search.
Reserve your LLC name with the Division of Corporations
Reserving your LLC name with the Division of Corporations is a good idea because it prevents another business from using it before you can legally organize your business in Utah.
2. Designate a registered agent
As in every U.S. state, forming an LLC in Utah requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.
The registered agent must either be a state resident or business entity with a street address in Utah OR if the individual or business is based out-of-state, they must have a business office in Utah.
3. File a Certificate of Organization
An LLC is formed in Utah through the filing of a Certificate of Organization with the Utah Division of Corporations.
You can file the certificate online using the Utah Online Business Registration website or by postal mail. The filing fee is $70.
The Certificate of Organization must provide the following information:
- LLC’s name and the address of its principal office
- Registered agent name and address
- LLC members’ names and addresses (optional)
- The signature of an LLC organizer
Foreign LLC registration
An LLC formed in a state other than Utah that intends to do business in the state must register with the Utah Division of Corporations.
Complete these steps to do business in Utah as a foreign LLC:
- Comply with Utah LLC naming restrictions and confirm that the LLC’s name is available using the Utah Division of Corporations Business Search.
- Appoint a Utah registered agent.
- File a Foreign Registration Statement with the Utah Division of Corporations online or by postal mail. The filing fee is $70.
4. Draft an operating agreement
Although not a legally mandated step for forming an LLC in Utah, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.
The operating agreement should do the following:
- Describe the LLC’s business structure
- Establish the individual responsibilities and obligations of LLC members
- Detail how the LLC will be run
Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.
5. Obtain an IRS Employer Identification Number (EIN)
All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).
The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.
You can apply for an EIN online on the IRS website without paying a filing fee.
6. Fulfill your Utah LLC’s additional legal obligations
Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.
File Annual Renewals
All LLCs doing business in Utah (including foreign LLCs) are required to file an annual renewal with the Utah Division of Corporations each year and pay a $20 filing fee. An LLC’s initial annual renewal is due by the one-year anniversary of its registration or authorization to do business in the state, and subsequent annual renewals are due each year on the same date.
Register with the Utah State Tax Commission
LLCs active in Utah (including foreign LLCs) may be required to register with the State Tax Commission to pay a number of state taxes. This includes LLCs that collect sales tax on retail goods and LLCs that have employees.
Obtain business licenses and permits
LLCs in Utah are required to obtain a local business license issued by their local municipality. The license can be acquired at a local business licensing office, and you can find a list of these offices in the Utah State Government’s Business Licensing & Registration Guide.
Visit the Utah Division of Occupational and Professional Licensing site for information on additional occupational licenses and permits that may be required for your LLC depending on its type of business.
Utah LLC checklist
A Utah LLC’s name must obey the following rules:
- Must be distinguishable from the names of existing business entities on file with the Utah Division of Corporations and Commercial Code.
- Must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “LLC”, “L.L.C.”, “LC”, or “L.C.”
Formational documents and filing fees:
- Application for Reservation of Business Name (optional) – $22 filing fee
- Certificate of Organization – $70 filing fee
- Foreign Registration Statement (foreign LLCs only) – $70 filing fee
- An LLC is formed in Utah through the filing of a Certificate of Organization with the Utah Division of Corporations.
Additional legal obligations:
- File Annual Renewals – Required for all LLCs doing business in Utah.
- Register with the Utah State Tax Commission – Required for certain LLCs doing business in Utah depending on their type of business.
- Obtain a local business license – Required for most LLCs in Utah.