How to Form a Professional Corporation in Utah (2024 Guide)

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
Last updated: 
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Forming a Professional Corporation in Utah

If you would like to start and learn how to form a corporation in Utah, there are a few things that you should do now. However, in a professional corporation, professionals must create a special organizational structure to establish a professional or service corporation. Among the appropriate professions to organize a professional corporation in Utah are accountants, physicians, engineers, architects, and attorneys.

Forming a professional corporation in Utah or any business organization needs a certain number of steps. In this article, Webinarcare Editorial Team is going to share those steps. Keep in mind that these are general procedures. Depending on local law, it may be modified. For instance, your professional corporation may be subject to city or county-based rules.

What is a Professional Corporation in Utah?

A professional service corporation (PSC), often known as a professional corporation (abbreviated as PC), is a particular type of organization that is permitted by state law to allow owners of specifically licensed professions to practice in the Utah. A professional corporation’s owner is answerable for their own negligence or wrongdoing but is not held personally liable for the actions of other owners. The abbreviation PC or P.C. is frequently used to denote professional corporations.

This structure allows professionals to enjoy some of the benefits and protections of a traditional corporation while maintaining their professional status and abiding by the regulations of their respective licensing boards.

LegalZoom is the recommended corporation formation if you are thinking of forming a professional corporation from scratch. However, you can always start an LLC in Utah, if you changed your mind.

WEBINARCARE EDITORIAL TEAM

How to Form a Professional Corporation in Utah

To form a Professional Corporation in Utah for the professional service you provide, you must follow a few steps that include verifying if you are qualified for a PC, naming your business, hiring a Registered Agent, filing the Articles of Incorporation, outlining an operating agreement, requesting for an EIN, opening a bank account, getting a business license, and filing for an Annual report and taxes.

Step 1: Verify If You Are Qualified for a Professional Corporation

In forming a professional corporation in Utah, you should know if you are qualified. There are specific professions that are allowed to form a professional service corporation, including-

To provide your service, you must be qualified and have a license. In most cases, you can now form a professional corporation after finishing your studies, passing the exam, and receiving your license. If you work in an industry that does not provide a license or professional certification, you should consider starting an LLC or corporation.

Step 2: Name your Professional Corporation in Utah

After you have decided to form a professional corporation in Utah, you must choose a name for your corporation. Here are some pointers to consider when naming your professional corporation.

  • The business name should have the word PC, frequently followed by the name of the principal owner in place of Inc or LLC. (Example. John Doe, MD, PC)
  • Limit of restricted words that need a license.
  • A unique name is needed with no match
  • No confusion with a government entity name.

In Utah, if you do not wish to file your professional corporation right away but want to hold the name that you have decided on, then you can reserve your corporation name for 120 days. You must file a name reservation application in the Utah Secretary of State to keep the name.

If not already present, a professional corporation, professional association, service corporation, or professional service corporation must be included in the name. You may register your business under a different legal name if your preferred legal name is unavailable. Once you’ve decided on a name, you can apply for Utah DBA (doing business as). This way, you can run a clinic or law firm under your name.

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Step 3: Choose the Utah Registered Agent

The next step in forming a professional corporation is hiring a Registered Agent, who accepts legal paperwork for your business. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Utah. Forming a professional corporation for your service will be easier if you have Registered Agent in Utah.

Alternatively, you can serve as your own Registered Agent if you have the time. Usually, in Utah, a Registered Agent costs is ranging from $50 – $150. To make it easier, you can hire Utah Registered Agent Services for your professional corporation.

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Step 4: File the Articles of Incorporation in Utah

After you hire a Registered Agent to form a professional corporation, the next step is to file the Utah Articles of Incorporation. In writing the Articles of Incorporation, the business name, owner’s contact information, corporation address, and Registered Agent contact information, should be written. Include the names of all co-owners as well. All owners must demonstrate that they have the necessary licenses to practice the profession in question.

Filing the Articles of Incorporation in Utah may be done with four methods that are online, fax, by mail and in-person. The Articles of Incorporation fee may vary from different state. However, in Utah, it costs $54 for filing online, by mail, in person filing, or by Fax. 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. . For 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: Write an Operating Agreement in Utah

An operating agreement in Utah is a document that contains all of your company’s organizational details. It is optional to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. The operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

Step 6: Designate the PC Board of Directors in Utah

The next step is to form the first board of directors for your PC in Utah. All of the initial directors must provide the owner with their contact information. The owner must keep records and submit them by the Utah Secretary of State. As a shareholder and owner, you must ensure that a provision for appointing a new director is included in the By-laws. In Utah, you must have Three directors in forming your Professional Corporation.

Step 7: Write the Corporate Bylaws

Now that you are done forming the team of the board of directors, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

Creating comprehensive corporate bylaws requires specific knowledge about the company, its structure, and operations. However, I can provide you with a general outline of what corporate bylaws usually include. It is crucial to consult with Utah Business Attorney or a legal expert to ensure that your bylaws comply with the laws and regulations governing your jurisdiction and industry.

  • Name and Purpose of the Corporation
  • Registered Office and Agent
  • Shareholders
  • Board of Directors
  • Officers
  • Committees
  • Indemnification and Insurance
  • Conflict of Interest
  • Records and Reports
  • Amendments
  • Miscellaneous

Step 8: Hold the First Board of Directors’ Meeting

Gather the board of directors for the first meeting after drafting the corporate bylaws. This meeting will conclude with the appointment of directors to manage the company’s daily operations, approval of the bylaws, selection of the corporation’s financial reporting year, and approval of the stock issue. Minutes should be taken at all board meetings and kept with the company’s records.

Step 9: Request an EIN in Utah.

After the operating agreement’s documentation, you should get or request an Employer Identification Number (EIN) in Utah. The tax ID for your professional corporation will be an EIN. The Internal Revenue Service can provide an EIN (IRS). It has nine digits and is comparable to a social security number. Nevertheless, EIN is different from SSN. Only business-related tasks, primarily filing general taxes, are performed using it. The form needs to be filled out and submitted online to the IRS.

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 the 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.

After you have your EIN number, you can benefit in several ways. It will give your professional corporation the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

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Step 10: Open a Bank Account and Prepare for Taxes.

You should open a business bank account as soon as you have applied for and received your Employer Identity Number because you will use this account for yourself, your clients, and your staff. Check out the Best Banks in Utah for you to decide on which bank you are going to open an account.

Due to your organization’s increased legality and liquidity, having a US business bank account may make conducting business in Utah easier. Most banks require an EIN for businesses other than sole proprietorships to open a business bank account. Also, keeping your accounts separate will prevent you from merging your personal and business finances. Also, filing taxes is simpler when you have an EIN. You can expect to pay employee and corporate taxes when you form a professional corporation.

Step 11: Get a Business License in Utah

Before your professional corporation operates in Utah, you must have Utah Business License first. A business license is a formal document issued by a state government agency that allows you to conduct business in the geographic area governed by that agency. The cost of business licenses and permits in Utah ranges from $50 – $300. You must check with the local authorities to see if any special licenses or permits are required.

Step 12: File Your Taxes in Utah

Finally, you’ve arrived at the final process. Remember to file your taxes when you have obtained a business license and are ready to begin operations. To avoid a large tax bill, you should begin paying taxes quarterly as soon as possible. Each state has different tax requirements. Start examining the Utah tax classification for the taxes that an LLC in Utah must pay.

Main Characteristics of a Professional Corporation

In forming a Professional Corporation, the main characteristics must be distinguished before forming it. These are the general characteristics of forming a Professional Corporation in Utah.

  • Limited Liability Protection: A professional corporation provides its owners, shareholders, or members limited liability protection like a regular corporation. This means the shareholders’ personal assets are generally protected from business debts, obligations, and lawsuits, except in malpractice or professional negligence cases.
  • Utah Licensing Requirements: All shareholders must typically be licensed professionals in the same field in a professional corporation. The corporation must also comply with specific state regulations and licensing requirements that govern the profession.
  • Governance and Management: A professional corporation is governed by a board of directors, who the shareholders elect. The board appoints officers to manage the day-to-day operations of the corporation. All directors and officers must be licensed professionals in the same field as the corporation.
  • Taxation: Professional corporations are taxed as C corporations, where the corporation pays taxes on its income, and shareholders pay taxes on dividends received from the corporation. However, some professional corporations may be eligible for S corporation status, allowing pass-through taxation. Income, losses, deductions, and credits flow to the shareholders, who report this information on their income tax returns.
  • Restrictions on Ownership and Transfer of Shares: Professional corporations often restrict the ownership and transfer of shares to ensure that only licensed professionals in the same field can become shareholders. This helps maintain the professional nature of the corporation and adheres to state licensing requirements.
  • Malpractice Liability: While a professional corporation provides limited liability protection for general business debts and obligations, it does not shield shareholders from liability for their own malpractice or professional negligence. Shareholders can still be personally liable for their actions in providing professional services.

In summary, a professional corporation is a specialized corporate structure designed for licensed professionals, offering limited liability protection and a formal governance structure while adhering to state licensing requirements and regulations.

Maintain Professional and Business License in Utah

You must maintain or renew your professional license regularly now that you have established your professional corporation. Even if your company is well-established, it is only meaningful if you have a valid operating license. And it makes no difference if your professional license is still valid for a year or two, but your business license has already expired.

Make time at least once a year to check the status of your licenses. You won’t miss anything important this way. You can address any issues that arise.

Filing Annual Report in Utah

In Utah, you must submit a report. The owners’ and Registered Agent’s names and contact details are listed in the Annual Report. Also, it should include all of your yearly financial activity. You must submit the report every 1 year in the Utah Secretary of State.

FAQs

What type of professional corporations can be formed in Utah?
Professional corporations can be formed for several professions, including lawyers, accountants, architects, engineers, and healthcare professionals like doctors and dentists.
What are the requirements for forming a professional corporation in Utah?
You must file Articles of Incorporation with the Utah Division of Corporations and be authorized by a Utah state department overseeing your profession.
What is the fee for forming a professional corporation in Utah?
The fee for filing the Articles of Incorporation is $70 for profit corporations.
Do I need a lawyer to form a professional corporation in Utah?
Although you don’t need a lawyer to form a professional corporation, it can be helpful to consult an attorney to ensure compliance with the Utah laws.
How long does it take to incorporate a professional corporation in Utah?
The normal processing time is one business week, and Expedited processing is available by paying an additional fee of $75.
What is the LLP in Utah?
The Limited Liability Partnership (LLP) is the business partnership that enjoys liability protection similar to the compensation of a Corporation or LLCs.
How much does a registered agent service cost in Utah?
You can get a registered agent service in Utah for as low as $39+ annually.
What are the advantages of incorporating as a professional corporation in Utah?
Incorporating as a professional corporation can limit the liability of the owners.
Do I need to include professional terms in my Utah corporation’s name?
Yes, your corporation’s name has to include professional designations relevant to the filed profession.
How long does a Utah professional corporation continue to operate?
A Utah professional corporation continues to operate indefinitely unless specifically stated otherwise.
What is the minimum age to form a Utah professional corporation?
The minimum age to form a Utah professional corporation is 18 years old.
Will I need a business license to operate my professional corporation in Utah?
Yes, for most professional businesses requires business licensing by the Utah Department of Commerce Division of Occupational and Professional Licensing.
What is the Utah Secretary of State?
The Utah Secretary of State (Utah SOS) is the registered agent entity that provides legal frameworks and directly interacts with state authorities; established for ensuring organized protection and regulation of your corporations
Do Utah corporations have to file an annual report?
Yes, the Utah corporations have to file an annual renewal as approved via the Utah Secretary of State.
How much does it cost to file an annual report for a Utah corporation?
The fee to submit an annual renewal for Utah PC can start at $15.00.
What are the director eligibility requirements for a Utah professional corporation?
You must have at least one board member, who will oversee the company affairs and protect the company, but they don’t need any specified eligibility criteria.
Can out-of-state businesses form a professional corporation in Utah?
Yes, out of state business entities can operate as Utah professional corporations after getting authorized by the necessary department.
What is the document to renew a Utah professional corporation?
To renew in good standing a professional corporation in Utah, a renewal application (domestic or foreign) must be filed each year, containing important updates and verified proof of licensed professionalism.
Is an EIN mandatory to form a professional corporation in Utah?
Although you wouldn’t technically require an EIN, it generally serves as a standard for starting financial transactions and hiring tax reports.
Will my corporation name reservation be in perpetuity in Utah?
If you passed approval of the form D saying protected name, Utah state grants you the assurance to hold onto the chosen title.
How many shareholders can a Utah professional corporation have?
At least one must act and form a shareholder in your Utah PC.
How can I find out if my professional corporation’s name is available in Utah?
You can assess name availability by checking the Utah Division of Corporations’ databases or calling their helpline.
How do I get a certified copy of my professional corporation’s articles of incorporation in Utah?
The Utah Division of Corporations offers certified copies upon request once lodgement of the form is done properly.
How do I amend my professional corporation’s articles of incorporation in Utah?
Amendments can be done online in Utah by submitting your updated articles to the Utah Division of Corporations with the relevant fees.’
Can a corporation address in Utah members’ personal information?
Utah Corporation Laws assure the business’s user data will stay apparent until business restrictions require otherwise and don’t demand identification.
Are foreign Utah corporations compliant in other states?
Some states’ foreign qualifications entail tailored state amendments, which then merge Utah professional qualifications to the new volume correctly.
What is the Utah Business Search?
The Utah Business Search list all enterprises authorized for conducting trade in Utah, irrespective of the necessity to retain, incorporated abroad, or so on.
Can Utah professional corporations change their company’s name?
Yes, by filing a Certification of Amendment of Articles of Incorporation with related processing fees.
Can Utah Professional Corporations have multiple kinds of licenses if required?
Yes. With Utah’s additional filings and procedures relevant to your line of work, you’re able to keep several certificates without any additional obstacles.
What is a professional corporation in Utah?
A professional corporation in Utah is a legal structure that allows individuals in certain licensed professions to form a corporation to provide professional services.
What types of licensed professions are eligible to form a professional corporation in Utah?
Licensed professions that are eligible to form a professional corporation in Utah include doctors, dentists, lawyers, accountants, architects, and engineers, among others.
What are the benefits of forming a professional corporation in Utah?
Some benefits of forming a professional corporation in Utah include limited liability protection, tax benefits, and the ability to easily transfer ownership.
How do I form a professional corporation in Utah?
To form a professional corporation in Utah, you must file Articles of Incorporation with the Utah Division of Corporations and Commercial Code and obtain any necessary professional licenses.
Can a professional corporation provide services outside of Utah?
Yes, a professional corporation in Utah can provide services in other states as long as it complies with all necessary state laws and regulations.
Is it necessary to have a board of directors for a Utah professional corporation?
Yes, a Utah professional corporation is required to have a board of directors.
Can a Utah professional corporation have non-licensed individuals as shareholders?
No, a Utah professional corporation can only have licensed professionals as shareholders.
What is the difference between a professional corporation and a regular corporation in Utah?
A professional corporation in Utah is specifically designed for licensed professionals to provide professional services, while a regular corporation is not limited to providing professional services.
Can a Utah professional corporation be a nonprofit?
No, a Utah professional corporation cannot be a nonprofit.
Are there any annual fees or taxes required for a Utah professional corporation?
Yes, a Utah professional corporation is required to maintain an annual franchise tax report and pay an annual franchise tax fee to the state.
How is a professional corporation taxed in Utah?
A Utah professional corporation may choose to be taxed as either a C corporation or an S corporation.
Is a professional corporation required to have professional liability insurance in Utah?
It is not required by law, but it may be necessary to obtain professional liability insurance as part of your professional licensing requirements.
How long does it take to form a professional corporation in Utah?
The processing time for forming a professional corporation in Utah may vary, but it typically takes about 7-10 business days.
Can I change the name of my Utah professional corporation after it is formed?
Yes, you can change the name of your Utah professional corporation by filing an Amendment of Articles of Incorporation with the Utah Division of Corporations and Commercial Code.
What happens if a Utah professional corporation violates state laws or regulations?
If a Utah professional corporation violates state laws or regulations, it may be subject to fines, penalties, or license revocation.
Do I need to hire an attorney to form a professional corporation in Utah?
While it is not required, it is recommended to hire an attorney to assist with the creation of your Utah professional corporation.
Can a professional corporation in Utah convert to a different business structure?
Yes, a professional corporation in Utah may convert to a different business structure, but there may be legal and tax implications involved.
Can a professional corporation in Utah merge with another company?
Yes, a professional corporation in Utah can merge with another company if all necessary legal requirements are met.
What is the cost of filing articles of incorporation for a professional corporation Utah?
The cost to file articles of incorporation for a professional corporation in Utah is $70.
How often does the state of Utah renew registrations for professional corporations?
Professional corporations in Utah renew their registration annually.
Do I have to renew my professional license in Utah each year?
Yes, licensed professionals in Utah must renew their license every two years.
How long does it take to renew a professional corporation in Utah after the registration has lapsed?
If a Utah professional corporation’s registration has lapsed, it may take up to three weeks to re-register.
Can a professional corporation hire administrative staff and support personnel?
Yes, a professional corporation in Utah can hire administrative staff and support personnel to assist in providing professional services.
Are there any restrictions on changing the structure of a Utah professional corporation?
A Utah professional corporation may change its structure, but it must comply with all necessary legal requirements and may also have tax implications.
Can I operate multiple professional practices through a single Utah professional corporation?
No, a Utah professional corporation can only provide services within one licensed profession.
How can I dissolve a Utah professional corporation?
To dissolve a Utah professional corporation, you must file Articles of Dissolution with the Utah Division of Corporations and Commercial Code and fulfill any necessary legal obligations before winding down the business.
What are the types of Utah corporations available to me as a licensed professional?
For licensed professionals in Utah, there are professional service corporations (PC), professional LLC (PLLC) and nonprofit professional corporations.

Also Read

How to Save Money While Forming Utah Professional Corporation

First and foremost, it is crucial to conduct thorough research before engaging in the legal aspects of forming a professional corporation in Utah. Being knowledgeable about the state’s specific laws and requirements can save both time and money. Familiarize yourself with the necessary legal documentation and seek out free or low-cost resources, such as online guides or workshops, to stay informed and navigate the process appropriately.

Given that legal fees can accumulate quickly during the formation of a professional corporation, it is wise to take a cost-effective approach. There are options available to entrepreneurs, such as utilizing online legal services, which often provide affordable and reliable solutions for the various legal tasks involved. These services can assist in drafting articles of incorporation and other necessary documents. While it is important to ensure the authenticity and reputability of such online services, they can be a viable alternative to expensive attorney fees.

Furthermore, entrepreneurs can optimize their financial resources by being meticulous about their budget. Assess the essential expenses required for a successful professional corporation formation, such as legal fees, registration fees, and office space (if applicable). Be selective and cost-conscious when making these investments. Consider alternatives to traditional office rentals, such as co-working spaces or home-based offices, to cut down on overhead costs.

Seeking advice from professionals within the field is another valuable yet cost-effective strategy. Consult individuals who have already successfully established professional corporations in Utah. They can provide valuable insights and guide you towards potential cost-saving opportunities. These professionals may also offer advice regarding the best practices to adopt during the formation process.

Another tip is to explore various financing options available for entrepreneurs looking to establish a professional corporation in Utah. Many organizations, both private and public, provide grants, loans, or other incentivized programs to assist new businesses in the state. Conducting diligent research and reaching out to local business associations or entrepreneurial networks can unveil these financial opportunities.

Leveraging technology is a modern and cost-efficient approach to streamline processes. For instance, establishing an online presence through a website or utilizing social media platforms not only helps reach a broader audience but also saves money on traditional marketing strategies. Digital marketing tools and apps can also reduce overhead costs associated with administrative tasks.

As with any entrepreneurial venture, forming a professional corporation requires careful consideration of financial decisions. But with a strategic mindset and a willingness to explore creative solutions, entrepreneurs can save money during the formation of a Utah professional corporation. By researching legal requirements thoroughly, seeking cost-effective alternatives, budgeting wisely, learning from professionals, exploring financing options, and leveraging technology, entrepreneurs can embark on their professional corporation journey while keeping their financial bottom line intact.

Conclusion

In conclusion, forming a professional corporation in Utah is a strategic decision for licensed professionals who seek to combine their expertise and services under a single corporate entity. This business structure offers limited liability protection, a formal governance structure, and compliance with state licensing requirements. However, it also comes with certain restrictions on ownership, transfer of shares, and personal liability for professional malpractice. By carefully considering the advantages and disadvantages of a professional corporation, professionals can determine whether this structure aligns with their business goals, regulatory requirements, and risk management needs, ultimately contributing to a more organized, secure, and compliant professional practice.

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