How to Start an LLC in Utah: If you’re looking to launch a business in Utah, starting a Limited Liability Company (LLC) may be the right choice for you. An LLC provides personal liability protection for its owners while giving them flexibility in managing and taxing the business. This guide provides a step-by-step process for starting an LLC in Utah. From choosing a unique name to registering with the state and obtaining necessary licenses and permits, Webinarcare Editorial Team will walk you through setting up your new business entity. So grab a pen and paper, and let’s get started!
On this page, you’ll learn about the following:
What is a Limited Liability Company?
A Limited Liability Company (LLC) is a type of business entity that combines a corporation’s limited liability protection with a partnership’s tax benefits. LLCs are popular among small business owners for their flexibility and ease of formation. In Utah, an LLC must have a unique name and file Certificate of Organization with the Secretary of State. Depending on their business needs, LLCs may also elect to be taxed as a corporation or an S-corp. Owners of an LLC, called members, are not personally liable for the company’s debts and losses, and the company’s profits and losses are passed through to the member’s personal tax returns. This makes an LLC an attractive option for those seeking personal liability protection and simplified taxation.
To accomplish the steps in starting an LLC, you can hire an LLC Formation Services that will help you build your desired business. We reviewed some of the best LLC formation services and provided features as an add-on with their packages for you to check out.
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Steps on How to Start an LLC in Utah
To form an LLC for your business, you must follow the guidelines that include naming your LLC, hiring a Registered Agent, filing your Certificate of Organization, creating your LLC operating agreement, getting an employer identification number, opening a bank account and getting business licenses and permits.
Step 1: Name your LLC in Utah
After you have decided on the idea to form an LLC in Utah, deciding the name for your LLC is significant. There is a complete guide on LLC name guidelines for you to have a proper LLC business name. Here are some regulations you must follow while naming your LLC,
- The name should not be confused with a government entity.
- The name should be unique.
- The name should be available to use.
- Any other business does not use the name.
- The new name must include “LLC” if it is a limited liability company.
In Utah, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 120 days. You must file a name reservation application in Utah Secretary of State to keep the name.
Recommended: We recommend a professional service that can offer you unlimited name search, trademark and copyright registration at a reasonable price. We recommend using –
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You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for filing Utah DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in three methods, online, by mail, and in person filing. However, before filing a DBA, you should know that you need to renew your DBA from up to three years, which costs around $22.
Step 2: Hire a Registered Agent in Utah
Hiring a Registered Agent in Utah is a must since a Registered Agent is a person or business entity responsible for receiving important legal documents on behalf of your Utah LLC. Most states require you to designate a Registered Agent when forming your LLC.
The qualifications of a Registered Agent vary depending on the jurisdiction. Still, generally, a Registered Agent must meet the following criteria:
- Availability: A Registered Agent must be available during regular business hours to receive and process legal documents and official correspondence.
- Physical Address: A Registered Agent must have a physical street address within the state where the LLC is registered. This address, known as the registered office, cannot be a P.O. Box.
- Residency or Authorization: For individuals serving as Registered Agent, they must be residents of the Utah where the LLC was formed. A business entity acting as a Registered Agent must be authorized to do business within that state.
- Age: A Registered Agent must be at least 18 years old.
- Good standing: A Registered Agent should not have any legal or financial issues that impede their ability to fulfill their duties.
Choosing a reliable and responsible Registered Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. Some businesses use professional Registered Agent services to ensure compliance and proper handling of legal matters.
However, if you would like to have an easier process in filing the necessary documents, you can get Utah Registered Agent Services.
Step 3: File your Certificate of Organization in Utah
The Certificate of Organization for an LLC is an important document to start your limited liability company (LLC). Utah Certificate of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization.
Here are the guidelines and specific requirements in filing your Certificate of Organization in Utah.
1. Obtain the Necessary Forms: Visit the Utah’s business filing office website, usually the Utah Secretary of State’s office, to download the required forms or file online.
2. Provide the Required Information: Fill in the necessary details in the form, which typically include:
- The name of your LLC (must include an LLC designator such as “LLC,” “L.L.C.,” or “Limited Liability Company”)
- The purpose of your LLC (a general statement or specific business activities)
- The address of your LLC’s principal place of business
- The name and address of your registered agent (the person or business entity responsible for receiving legal documents on behalf of your LLC)
- The management structure of your LLC (member-managed or manager-managed)
- The duration of your LLC, if not perpetual
- The names and addresses of the LLC’s organizers or members
3. Sign and File the Form: Submit the completed form in the {state} state office, either by mail, in person, or online. You may mail it at Utah Division of Corporations & Commercial Code, P.O. Box 146705, Salt Lake City, UT 84114.
4. Pay the Filing Fee: When you submit your Certificate of Organization, you’ll need to pay a filing fee of $70. Make sure to check and include the correct payment with your submission.
5. Receive Confirmation: After your Certificate of Organization have been filed and processed, you’ll receive a confirmation from Utah, typically a stamped and approved copy of the document or a Certificate of Organization.
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Once you have successfully filed your Certificate of Organization and it has been approved, your Utah LLC is officially formed. However, remember to complete additional steps, such as creating an Operating Agreement, obtaining an EIN, and registering for any required licenses and permits.
Step 4: Create Your Utah Operating Agreement
An operating agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in most states is not required. Yet, having one as an internal document is strongly advised. An operating agreement includes information like-
- About Business
- Members and management
- Capital contribution
- Profit Distribution
- Change of membership
- Dissolution
To understand how an operating agreement works, you should check out how to create an operating agreement in Utah.
Recommended: Get oprating agreement drafts ready on your table with a help of a professional service. We recommend using –
LegalZoom – ($0 + State Fee for LLC formation)
Step 5: Get an EIN
After documenting the operating agreement, you should get or request an Employer Identification Number (EIN) in Utah. An EIN will serve as the tax ID for your professional 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 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.
In obtaining an EIN for your LLC, you should be aware to ensure that your LLC is eligible for an EIN. You need an EIN if you have employees, operate as a corporation or partnership, or meet other specific IRS criteria. Before applying, gather the required information, including your LLC’s name, mailing address, and the responsible party’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Also, you can apply for an EIN through various methods, including online, by fax, mail, or telephone (for international applicants).
Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –
LegalZoom – ($0 + State Fee for LLC formation)
Step 6: Open a Bank Account and Prepare for Taxes
After you have filed for and received your Employer Identification Number, you should open a bank account because you will use this account for yourself, your clients, and your employees.
Your business dealings in Utah might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN to create a business bank account for firms other than sole proprietorships. Also, having an EIN makes tax preparation easier. You can anticipate paying employment and corporate taxes with Utah LLC.
Opening a bank account is necessary for Utah business. If you are still wondering where to open an account in your Utah, you should check the Best Bank for Small Business in Utah.
Step 7: Get a Business and License Permit
You must get a business license in Utah before establishing your LLC. A business license is a legal document granted by a state government body that permits you to conduct business within the area under its jurisdiction. The price of business licenses and permits in Utah ranges from $50 – $300. If there is a requirement for a specific license or city-based permit, you must inquire with the Utah Secretary of State.
Cost to Form an LLC in Utah
Even if you have a business name and structure in mind, you should consider whether you can afford the costs of forming an LLC in Utah. Certificate of Organization costs around $70. The initial filing fee is $70, and the annual fee is $20.
If you forget to pay the annual fee for your Utah LLC, you will have a penalty of $15. However, you can check the Utah LLC Cost for additional information.
Advantages of Creating Utah LLC
Even though some people decide on what to do with their businesses, some choose to put it in their own individual name, while others still choose to set it up via LLC in Utah. Important benefits will help you set up an LLC in Utah.
- Pass-Through Taxation: The pass-through structure will make the company not pay twice the tax. Most start-ups and entrepreneurs in Utah apply for an LLC because of this structure. Pass-through taxation refers to how income and losses from an LLC (Limited Liability Company) are passed through to its members (owners) for tax purposes rather than being taxed at the business entity level. This means the LLC does not pay federal income taxes; the members’ profits and losses are allocated based on their interests. Each member then reports their share of the LLC’s income or losses on their personal tax returns and pays taxes at their individual tax rates.
- Ownership Flexibility: If you need sole and primary control over your company’s operations, a sole proprietorship will allow you to do so. If you apply for an LLC in Utah with flexibility, you will have default rules set by law and need an operating agreement.
- Personal Liability Protection: Personal Liability Protection protects your business from damage, debts, or legal obligations. In personal liability protection, the company’s profits and earnings will stay as is even if your company is about to be sued. This protection of having an LLC in Utah can also be extended to the company’s properties and assets. Many start-up companies will benefit from this since most are starting to build a company. Even if liability exists, the LLC in Utah will protect its assets.
FAQs
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How Fast Can I Form an LLC in Utah
Creating an LLC in Utah is relatively straightforward and can vary in terms of speed depending on a few factors. The first step involves choosing a unique name for your business that complies with Utah’s naming requirements. This usually means that the name must not be identical to or too similar to an existing LLC in the state. Once you’ve selected a name, you can reserve it online or file for an immediate registration with the Utah Division of Corporations.
After securing a name, the next step is to file Articles of Organization with the Utah Division of Corporations. This document outlines key information about the LLC, such as its name, address, registered agent, and business purpose. Once submitted, the state typically processes the Articles of Organization within a few business days. Approval times may vary depending on the volume of filings received by the division.
While forming an LLC in Utah can be a relatively quick process, it’s essential to ensure all required information is accurate and complete to avoid any delays. Additionally, entrepreneurs may opt to expedite the filing process by paying an additional fee for quicker processing times. This option can be beneficial for those looking to establish their LLC promptly.
In addition to filing the necessary paperwork, business owners in Utah must obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This unique identifier is essential for tax purposes and is typically issued immediately upon online application. With an EIN in hand, entrepreneurs can open a business bank account, hire employees, and comply with tax obligations.
Another important aspect of forming an LLC in Utah is appointing a registered agent who will receive legal notices and documents on behalf of the company. While business owners can act as their own registered agent, many choose to hire a professional service to ensure compliance and privacy. Having a registered agent in place is crucial for maintaining good standing with the state and avoiding potential legal issues.
Overall, the speed at which one can form an LLC in Utah ultimately depends on the individual’s preparedness and adherence to state requirements. By diligently completing the necessary steps and ensuring accuracy in documentation, business owners can establish their LLC in a timely manner. Whether seeking quick approval or opting for expedited processing, forming an LLC in Utah can be a straightforward process for aspiring entrepreneurs ready to bring their business ideas to fruition.
Conclusion
In conclusion, starting an LLC in Utah is a strategic choice for entrepreneurs seeking a flexible, straightforward business structure with limited liability protection. By following the essential steps, including choosing a business name, filing Certificate of Organization, appointing a Registered Agent, creating an Operating Agreement, obtaining an EIN, and securing the necessary licenses and permits, you can successfully establish your LLC. This business structure offers numerous advantages, such as pass-through taxation and ownership flexibility, making it an attractive option for small business owners looking to grow and protect their ventures. As always, consult legal and business professionals for guidance specific to your situation and state requirements.