Starting a Corporation in Utah | What You Need to Know


Steve Bennett
Steve Bennett
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Start a Corporation in Utah

In Utah, starting a corporation can benefit entrepreneurs looking to establish a separate legal entity for their business. Incorporating your business provides liability protection for its owners and offers potential tax benefits and a professional image. This comprehensive guide will walk you through Starting a Corporation in Utah, from choosing a corporate name to fulfilling ongoing compliance requirements. Some people consider starting a corporation since it has advantages and benefits rather than Starting an LLC in Utah.

Webinarcare Editorial Team will help you gain knowledge in starting a corporation with thorough research and market study. It would be best to cross-check all the factors in this article before forming a corporation.

What is a Corporation in Utah?

A corporation in Utah is a business organization recognized as a separate legal entity from its owners, also known as shareholders. When a corporation is formed, shareholders invest capital by purchasing shares of stock and, in return, become partial company owners. The corporation is managed by a board of directors elected by the shareholders to oversee the company’s operations and make important decisions. Corporations in Utah are required to have at least Three directors. One of the main advantages of a corporation in Utah is that it provides limited liability protection to its shareholders, meaning their assets are not at risk if the corporation incurs debt or is legally sued.

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Common Types of Corporations

Before you start with a corporation, you should know what type of corporation you will form. There are several different forms of corporations you can take into consideration, depending on your corporation’s objectives and ownership structure.

C-Corporation

C-Corporation is the most known type of incorporation. They have almost all corporate distinguishing characteristics. Profits are distributed to corporate owners who are taxed at an individual level. The corporation is taxed similarly to a business unit.

S-Corporation

S-Corporation in Utah is set up similarly to a C-corporation but has different tax implications and owner limits. An S-Corporation has no more than 100 stockholders and is not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.

Nonprofit Corporation

Religious, educational, and charity institutions frequently use nonprofit businesses to run their operations without making a profit. Thus, a nonprofit corporation is exempt from paying taxes. The nonprofit organization’s gifts, contributions, or cash are reinvested in the company to fund its growth, future endeavors, or operations.

It is recommended to Start a Corporation in Utah if you would like to provide limited liability protection to your shareholders rather than Utah LLC. However, you may want to consult to LegalZoom’s Business Attorney before starting a business.

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How to Start a Corporation in Utah

To start a corporation in Utah, you must follow the below steps that, include choosing a corporate name, hiring a Registered Agent, appointing directors, filing for Articles of Incorporation, creating corporate bylaws, holding the initial board of directors, issuing stock, obtaining required licenses and permits, registering with state tax agencies, and annual reporting and ongoing compliance. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Choosing a Corporate Name

The first step in starting a corporation is choosing an available name that complies with Utah naming rules. Most states require that the name of a corporation be distinguishable from other registered business names and include a corporate designator such as “Corporation,” “Incorporated,” “Company,” or an abbreviation thereof.

Here are some guidelines you must follow while naming your corporation in Utah-

  • Your business name must contain entity identifiers, such as “Incorporated,” “Limited,” “Corporation,” or “Company,” or an abbreviation, such as “Inc.,” “Co.,” or “Ltd.”
  • Exclude any words in your business name, such as “Trust,” “Bank,” “Credit Union,” or “Trustee,” or words related to a government agency, such as “FBI,” “State Department,” or “Treasury.”

To check the availability of your desired corporate name, you can search the Utah Secretary of State‘s business name database and Business Name Search in Utah. If the name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of $22 and mail name reservation fee of $22. If your corporation plans to operate under a name other than its legal name, you may also need to register a fictitious or “doing business as” (DBA) name.

The DBA filing can be done by three methods, online, by mail, and in person filing., which costs around $22. In addition, the DBA’s validity in Utah is three years, which you can file in Utah Secretary of State.

You can check out How to File a DBA in Utah for clearer understanding.

Step 2: Hire a Registered Agent

Hiring a Registered Agent is essential in starting a corporation. Registered Agent is a person or company responsible for receiving important legal documents, tax notices, and other correspondence on behalf of your corporation. They ensure that your corporation remains compliant with state regulations and requirements. There are Utah Registered Agent Services to check in forming Utah Corporation. We reviewed some of the best-registered agent services and provided features as an add-on with their packages.

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Step 3: Appointing Directors

Corporations in Utah are required to have at least Three directors, though some states may require more. Directors are responsible for overseeing the corporation’s management and making major decisions on behalf of the company. In Utah, directors must be at least 18 years old and do not need to be state residents.

When appointing directors, it is essential to consider individuals who are knowledgeable, trustworthy, and capable of making sound business decisions. Maintaining a record of appointed directors, including their names, addresses, and terms of service, is also a good idea.

Step 4: Preparing and Filing Articles of Incorporation

After you appoint the initial board of directors in your Utah corporation, the next step is to write and file a Articles of Incorporation. In writing, the Utah Articles of Incorporation, the corporation name, principal place of business, the purpose of business, Registered Agent contact information, and the names and addresses of incorporators and initial board members, should be written.

To officially form your Utah corporation, you must prepare and file Articles of Incorporation with the Utah Secretary of State. The Articles of Incorporation is a legal document that outlines essential information about your corporation, such as its name, address, purpose, and details about its stock.

The specific requirements for Articles of Incorporation vary by state, but generally, the document must include the following:

  • The corporate name
  • The purpose of the corporation
  • The name and address of the registered agent
  • The names and addresses of the initial directors
  • The number of authorized shares and their par value
  • The name and address of the incorporator(s)

Once the Articles of Incorporation are complete, please submit them to the Utah Secretary of State’s office, along with the required filing fee. Fees vary by state, but in Utah, the Articles of Incorporation filing fee costs around $54 for filing online, by mail, in person filing, or by Fax. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

  • Online Filing: Create an account/Log in to the SOS site, get the e-form, fill it, and submit online. Or get the online PDF, fill it up and upload it back on the site.
  • Offline filing: Send the form by mail to or drop it off in person at Utah Division of Corporations & Commercial Code, P.O. Box 146705, Salt Lake City, UT 84114

Step 5: Creating Corporate Bylaws

Now you are done filing Articles of Incorporation in Utah, the next step is to draft corporate bylaws. While not always required by law, creating corporate bylaws is essential in establishing Utah corporation. Bylaws are the internal rules and regulations that govern the corporation’s operations and management. They outline the rights and responsibilities of directors, officers, and shareholders and provide guidelines for holding meetings and making decisions.

Key provisions to include in your corporate bylaws may include:

  • The corporation’s purpose and principal place of business
  • The roles and responsibilities of directors, officers, and shareholders
  • The process for appointing and removing directors and officers
  • The procedures for holding annual and special meetings
  • The methods for amending the bylaws and Articles of Incorporation
  • The procedures for issuing stock and maintaining shareholder records

Once the bylaws are drafted, they must be adopted by the corporation’s board of directors. Keeping a copy of the bylaws with your corporate records and updating them to reflect changes in the corporation or applicable laws is essential.

Step 6: Holding the Initial Board of Directors Meeting

The initial board of directors meeting is a crucial milestone for your Utah corporation. During this meeting, the directors will adopt the corporate bylaws, elect officers, and make other key decisions to set the foundation for the corporation’s operations.

The agenda for the initial board meeting may include the following:

  • Adopting the corporate bylaws
  • Ratifying any pre-incorporation actions taken by the incorporator(s)
  • Electing corporate officers (e.g., president, vice president, secretary, treasurer)
  • Designating a corporate bank account
  • Authorizing the issuance of stock
  • Approving necessary licenses, permits, and tax registrations

It is essential to keep detailed minutes of the initial board meeting, documenting the decisions made and actions taken. These minutes should be stored with your corporate records.

Step 7: Issuing Stock

Corporations in Utah are required to issue stock to their owners, also known as shareholders. When preparing to issue stock, you must determine the number of authorized shares and their par value, as outlined in your Articles of Incorporation. You may choose to issue different classes of stock, each with its rights and privileges, such as voting rights and dividend preferences.

The process for issuing stock typically involves the board of directors approving a stock issuance resolution, determining the price per share, and recording the issuance in the corporation’s stock ledger. Maintaining accurate and up-to-date records of all stock transactions, including transfers and cancellations, is crucial to ensure proper ownership tracking and compliance with securities laws.

Step 8: Obtaining Required Licenses and Permits

Depending on the nature of your corporation’s activities and location, you may need to obtain various licenses and permits to operate legally. These may include federal, state, and local requirements, such as:

  • A Federal Employer Identification Number (EIN) for tax reporting and employee withholding purposes.
  • State sales and use tax registration, if your corporation sells taxable goods or services
  • Professional or occupational licenses for specific industries (e.g., healthcare, construction, food service)
  • Utah Business Licenses, zoning permits, and health department approvals

Researching and obtaining all required Utah licenses and permits before commencing operations and maintaining compliance with any ongoing renewal or reporting requirements is essential.

Step 10: Registering with State Tax Agencies

In addition to obtaining licenses and permits, your Utah corporation may also need to register with various tax agencies. This may include registering for sales and use tax, obtaining an Employer Identification Number (EIN) in Utah for payroll tax purposes, and filing state income tax and franchise tax returns.

An EIN will serve as the tax ID for your Utah corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Utah can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Each state has tax requirements, so consult a tax professional or Utah State Tax Commission for guidance on your specific obligations.

Step 11: Annual Reporting and Ongoing Compliance

Once your Utah corporation is up and running, you must fulfill ongoing reporting and compliance requirements to maintain good standing. This may include filing Annual Report with the Utah Secretary of State, updating your corporate records to reflect changes in directors or officers, and staying current on any required licenses or permits.

In addition, it is essential to stay informed about changes in corporate laws and regulations that may impact your business and to seek professional advice when needed.

Paying Your Taxes in Utah

Even if you have established your corporation in Utah, pay your taxes and keep everything up to date so you won’t pay any penalty. Unlike an LLC, there is a corporate tax that every corporation in Utah has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in Utah are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in Utah

In forming a corporation in Utah, a filing and Annual fee must be paid. Without it, your corporation won’t operate. A corporation’s initial filing fee may vary from state to state. However, in Utah, it costs $54 for filing online, by mail, in person filing, or by Fax. The corporation in Utah also has to file an Annual Report (though it might not be mandatory, it is recommended to file one). Ensure you comply with all the necessary fees and costs so your corporation will run successfully and smoothly.

FAQs

What are the basic requirements for starting a corporation in Utah?
The basic requirements for starting a corporation in Utah include choosing a name for your corporation and obtaining a business license in Utah.
How can I incorporate my business in Utah?
You can incorporate your business in Utah by filing articles of incorporation with the Utah Division of Corporations and Commercial Code.
What is the cost of incorporating a business in Utah?
The cost of incorporating a business in Utah depends on the type of corporation you are forming and whether you are using an online filing service.
Do I need an attorney to incorporate my business in Utah?
No, you do not necessarily need an attorney to incorporate your business in Utah, but it can be helpful to consult with one to ensure that you are following all the proper legal procedures.
How long does it take to incorporate a business in Utah?
It typically takes about two weeks to incorporate a business in Utah, but this timeline can vary depending on the type of corporation you are forming and how quickly you are able to complete the necessary paperwork.
Can I incorporate my business in Utah if I live in another state?
Yes, you can incorporate your business in Utah even if you live in another state, as long as you meet all the requirements for doing so.
What is the difference between a C-corporation and an S-corporation in Utah?
The main difference between a C-corporation and an S-corporation in Utah is the way they are taxed by the IRS.
What are the tax benefits of incorporating my business in Utah?
There are several tax benefits to incorporating your business in Utah, including lower income tax rates and a variety of business tax credits and deductions.
Do I need to have a physical office in Utah to incorporate my business there?
No, you do not need to have a physical office in Utah to incorporate your business there, but you will need to have a registered agent who can receive legal documents on your behalf within the state.
What type of business should I incorporate in Utah?
The type of business you should incorporate in Utah depends on a variety of factors, including your business goals, tax situation, and liability concerns.
Can I change my business type after I’ve incorporated in Utah?
Yes, you can change your business type after incorporating in Utah, but it may require additional legal paperwork and fees.
What is the process for dissolving a corporation in Utah?
The process for dissolving a corporation in Utah involves filing articles of dissolution with the Utah Division of Corporations and Commercial Code and settling all outstanding business debts and taxes.
Do I need to file annual reports for my corporation in Utah?
Yes, you must file annual reports for your corporation in Utah.
What happens if I don’t file my annual report on time in Utah?
If you do not file your annual report on time in Utah, there may be penalties and your business may be involuntarily dissolved.
Can I form an LLC instead of a corporation in Utah?
Yes, you can form an LLC instead of a corporation in Utah, depending on your business goals and needs.
How can I change my corporation’s name in Utah?
To change your corporation’s name in Utah, you must file a Articles of Amendment with the Utah Division of Corporations and Commercial Code.
What requirements must a corporation meet to maintain good standing in Utah?
A corporation must meet certain requirements, such as filing annual reports and paying taxes, to maintain good standing in Utah.
Can I register my corporation’s trademark in Utah?
Yes, you can register your corporation’s trademark in Utah by filing an application with the Utah Division of Corporations and Commercial Code.
What are the advantages of incorporating my business in Utah?
Some advantages of incorporating your business in Utah include a stable economy, a skilled workforce, and a business-friendly environment.
Are there any downsides to incorporating my business in Utah?
There may be downsides to incorporating your business in Utah, depending on your specific business needs and goals.
How can I find a registered agent for my corporation in Utah?
You can find a registered agent for your corporation in Utah by contacting a registered agent service or a local law firm.
What documents do I need to file to incorporate my business in Utah?
To incorporate your business in Utah, you need to file articles of incorporation and pay any required fees.
What is the process for electing officers for my corporation in Utah?
The process for electing officers for your corporation in Utah is typically outlined in your corporation’s bylaws.
What is the liability protection for owners of a corporation in Utah?
Owners of a corporation in Utah typically have limited liability protection, which means that their personal assets are not at risk if the corporation incurs debt or legal liabilities.
What is the process for selling stock in a Utah corporation?
The process for selling stock in a Utah corporation involves complying with state and federal securities laws and regulations.
Can I incorporate a non-profit organization in Utah?
Yes, you can incorporate a non-profit organization in Utah by filing articles of incorporation with the Utah Division of Corporations and Commercial Code.
Are there any local business resources in Utah that can help me start my corporation?
Yes, there are a number of local business resources in Utah that can help you start your corporation, including chambers of commerce and incubators for start-ups.
What is the process for getting a business license in Utah?
The process for getting a business license in Utah involves registering with the Utah State Tax Commission and obtaining any required industry-specific licenses or permits.
What is the process to start a corporation in Utah?
The steps to start a corporation in Utah include filing articles of incorporation with the Division of Corporations and Commercial Code, selecting a unique name, obtaining a tax identification number, and registering with the Utah Department of Commerce.
How long does it take to start a corporation in Utah?
Generally, it takes around 5-7 business days to process the articles of incorporation in Utah.
What are the fees associated with starting a corporation in Utah?
Filing fees for articles of incorporation in Utah cost $70 for domestic business corporation forms and $75 for a foreign business corporation form.
Can I file the articles of incorporation online in Utah?
Yes, the online filing system is available for starting a corporation in Utah.
Do I need a registered agent in Utah to start a corporation?
Yes, a registered agent is required in Utah to start and maintain a corporation.
What are the qualifications for the registered agent in Utah?
The registered agent in Utah must have a physical address within the state and be available during regular business hours.
How do I choose a name for my corporation in Utah?
The name must be unique and distinguishable from other corporations already registered in Utah.
What is the minimum number of directors required for a corporation in Utah?
There must be at least one director for a corporation in Utah.
Can I be the only shareholder and director for my corporation in Utah?
Yes, one individual can be both the sole shareholder and only director in Utah.
Are there any name restrictions for a corporation in Utah?
Yes, the name cannot imply it is a corporation or vary only by hyphens, deceptively similar to the name of another entity already registered or reserved with the Utah Division of Corporations.
What type of liability protection does a corporation offer in Utah?
A corporation structure in Utah offers limited liability protection to its shareholders.
Can a corporation be taxed in Utah?
Yes, a corporation can be obligated to pay state and federal taxes in Utah.
Does the state of Utah offer any tax incentives for corporations?
Yes, Utah offers specific tax incentives for qualified corporations.
Do I need to obtain a Utah state business license to start a corporation?
Depending on what type of corporation you are starting in Utah, you may need a statewide business license.
Are corporations required to have bylaws in Utah?
Bylaws are not required in Utah for corporations but have key roles in emergencies in a corporation.
What is the minimum amount of stock shares a corporation is required to issue in Utah?
There is no requirement in Utah for a minimum amount of shares an entity must issue for a corporation.
Can I change the name of my corporation after registering it in Utah?
Yes, you can change the corporation’s name in Utah by filing paperwork and paying the respective fees.
What is the role of a corporate secretary in Utah?
A corporate secretary to maintain records and document transactions of a corporation is recommended in Utah but not required to maintain one.
Can a corporation also be a nonprofit organization in Utah?
Yes, you can adapt the corporation’s structure in Utah to function as a nonprofit corporation.
What is the minimum age requirement for directors in a corporation in Utah?
There is no minimum age requirement for directors of a corporation in Utah.
Can a corporation in Utah amalgamate with another business entity?
Yes, it is a common practice if two companies amalgamate in Utah to form a new entity.
How frequently do corporations require filing their annual reports in Utah?
Corporations registered in Utah are required to file their annual reports with the Division of Corporations once a year.
What information needs to be provided in a Utah corporation’s annual report?
Address and name change information, ownership shares, and other critical updates must be reported in Utah corporation’s annual report.
Can a corporation be dissolved in Utah?
Yes, a corporation in Utah can be dissolved by performing specific regulatory requirements.
Can a corporation reinstatement with Utah State?
Yes, it is possible to renew or take steps to avoid termination in Utah Corporation.
Can I convert my partnership or LLC into a corporation in Utah?
Yes, a partnership or LLC can be changed to a corporation with the process specified by the filing rules in Utah.
Can I reserve the name for my corporation before actually starting it in Utah?
Yes, one can fill out a name reservation application with the Division of Corporations, which protects their chosen name for a period of 120 days while they prepare to launch the corporation.
What are the penalties associated with failing to file annual reports in Utah?
Penalties are associated with late filing of annual reports in Utah, which includes delinquency or typically default, both with specific deadlines and waiver dates.

Also Read

How to Save Money While Forming Your Utah Corporation

One of the first things to consider when trying to save money on the formation of your Utah corporation is choosing the right business structure. While forming a corporation may offer certain advantages in terms of liability protection and tax benefits, it also tends to be more expensive and complex than forming a simpler entity like a sole proprietorship or a limited liability company (LLC). By carefully weighing the pros and cons of each type of business structure and determining which one best fits your needs and budget, you can avoid unnecessary expenses and save money from the start.

Another way to save money when forming your Utah corporation is to do as much of the work yourself as possible. While hiring a lawyer or a business formation service may seem like the easiest option, it can also be one of the most expensive. By taking the time to educate yourself on the process of incorporation and completing as much of the paperwork and filing yourself, you can avoid unnecessary legal fees and other expenses associated with professional services.

Additionally, when it comes to registering your corporation with the state of Utah, be sure to carefully review the fees and requirements set forth by the Utah Division of Corporations and Commercial Code. By understanding exactly what is needed to comply with state regulations and ensuring that you only pay for necessary services and filings, you can prevent unnecessary costs from eating into your budget.

When it comes to selecting a registered agent for your Utah corporation, consider partnering with a trusted individual or using a reputable registered agent service that offers competitive rates. Choosing the right registered agent is crucial for ensuring that your corporation remains compliant with state regulations and avoiding any potential legal issues, so be sure to research your options carefully to find the best fit for your needs and budget.

Another way to save money while forming your Utah corporation is to take advantage of any available resources or incentives offered by the state or local government. For example, some states offer tax breaks or other financial incentives to entice businesses to incorporate within their borders. By researching and taking advantage of any programs or incentives that may be available to you as a new corporation in Utah, you can reduce your overall expenses and increase your chances of success.

In conclusion, while forming a corporation in Utah may come with certain costs and complexities, there are plenty of ways to save money and set yourself up for success. By carefully selecting the right business structure, doing as much of the work yourself as possible, understanding state regulations and fees, choosing a cost-effective registered agent, and taking advantage of available resources and incentives, you can save money while still creating a solid foundation for your new corporation. With some strategic planning and careful decision-making, you can navigate the process of forming a Utah corporation with confidence and financial savvy.

Conclusion

Starting a corporation in Utah involves several critical steps, from choosing a corporate name to fulfilling ongoing compliance requirements. Following the steps outlined in this guide and seeking professional advice when needed, you can successfully establish your Utah corporation and enjoy the benefits of limited liability, potential tax savings, and a professional business image.

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