How to start an LLC in Utah
Starting an LLC in Utah is a relatively straightforward process, although it pays to do a bit of research first. This guide is designed to give entrepreneurs step-by-step instructions on how to start a Utah limited liability company and get it formed as a business entity.
Limited liability companies (LLCs) are a popular option because they help shield the owner’s personal assets from liabilities relating to the company. They are also a bit easier to maintain, compared to a corporation or S-corp.
Whether you’re a new entrepreneur or starting your third company, follow the steps below to form an LLC in Utah.
Consider using an LLC formation service
If you would like to save some time and hassle, it’s worth looking into using a professional LLC formation service. These companies specialize in new business formation and can walk owners through all the steps needed to form a new Utah LLC.
Two great options to consider are Northwest Registered Agent and ZenBusiness. Northwest is known for excellent service, and they provide personalized support and advice for their clients. ZenBusiness is known for efficiency and low costs – their basic plan is just $49 and includes a free year of Registered Agent services (see step #3 below).
If you don’t use a service, you’ll simply need to do more of the work on your own. The steps below show you how.
Name your new company
Before you file any paperwork, you will need to decide what to name your new business. This is an important step, so take your time in choosing the right name.
There are a few requirements to keep in mind during this process. For instance, the name must contain “limited liability company” or one of its abbreviations, and it cannot contain any restricted words or phrases. A complete list of naming rules in Utah can be found here.
The main requirement to keep in mind is that the name you choose must be unique/distinguishable from other business names in Utah. You can conduct a name search on the Utah.gov website to confirm if a name is taken or not.
Using an Assumed Name in Utah
While you are thinking about business names, it’s useful to understand that Utah does allow for the use of assumed names (AKA doing business as names or trade names). This opens up more possibilities for branding your business even after the LLC itself is formed.
Essentially, the use of assumed names means that you can do business under a name that’s not the formal LLC name you’re registered with. Once registered, you can add on an assumed name, and then legally use this new assumed name to do business (without needing to actually form a separate business entity).
Appoint a Registered Agent
Each Utah LLC is required to appoint and maintain a registered agent to represent their company. What does this mean?
A registered agent is tasked with receiving important documents on behalf of the company. Their chief role is to receive the legal notice, should your company ever be sued.
Anyone can be a Utah registered agent, so long as they reside in the state. A company can also be a registered agent for another company; but not for itself.
This means that you have a few options. You can appoint yourself, an employee, or anyone else you trust. The downside of this is that the mailing address of this individual will become a public record.
Or, you can use a professional registered agent service. Northwest Registered Agent and ZenBusiness are good options for this. If you go this route, you will know that everything will be handled efficiently and professionally – and you will protect your own privacy more.
Create an operating agreement
Note: This step is optional, but recommended.
Utah does not require LLCs in the state to have an operating agreement. However, it’s still a good idea to have one. You can draft an operating agreement with a template (provided by ZenBusiness if you use their LLC formation service), or through a local attorney.
An operating agreement is important because it establishes the key rights and responsibilities of LLC members. It lays out the basic operating procedures of the company and other important details. A well-drafted operating agreement can help prevent a lot of issues for your company in the future. It’s most useful for multi-member LLCs, but even single-member LLCs can benefit.
File Utah LLC Certificate of Organization
The formal document that will establish your LLC is called the Certificate of Organization. This must be filed with the Utah Secretary of State, which can be done online or by mail. The Utah LLC cost is $70, which is payable to the State of Utah.
To file online
File online with the state of Utah. Pay the $70 filing fee by credit/debit card or bank transfer.
To file by mail
Download and fill out the Certificate of Organization. Write a check or money order for $70 payable to the State of Utah. Mail the document and check to:
Utah Division of Corporations & Commercial Code
P.O. Box 146705
Salt Lake City, UT 84114
Next, it’s time to wait for Utah to process the documents. This can take 5-7 business days, typically, although it may be longer at times.
Apply for an EIN
An EIN, or employer identification number, is an important tax ID number issued by the federal government (the Internal Revenue Service, to be precise). This number is required before a company can hire employees. And even LLCs without employees must still obtain one if they have multiple members. Plus, an EIN is required for some other important business activities, like opening financial accounts.
Simply fill out this application on the IRS website to apply for an EIN. There is no cost, and most of the time, EINs are issued instantly. Once you have the EIN, you will use this for all future federal tax filings (and to hire employees).
Apply for business licenses & permits
There are additional requirements before you start operating your business. This can include additional permits or licenses, tax registrations, and more. The specific requirements will vary depending on your business.
A good place to start is with Utah’s One Stop Business Registration system. This will get you registered with the Utah State Tax Commission, the Utah Labor Commission, the Utah Department of Commerce, the Utah Department of Workforce Services, as well as the Utah Department of Environmental Quality. You will be issued all the appropriate numbers and licenses once you complete this process.
That takes care of state requirements. There may be some federal requirements for certain business activities.
Finally, you have local requirements on the city and/or county level. Most counties will require a general business license, and some cities may, as well. This also means that if you operate in multiple locations, you may need multiple permits or business licenses. Check with the local county clerk in your area for details.
Keep your business in good standing
Long after your business is formed, you will need to stay on top of various ongoing requirements. You want to keep your business in good standing with the government, in order to avoid fines, late fees or even the dissolution of your LLC. And you’ll need to keep up with compliance requirements on every level of government: federal, state, and local (city/county).
Each jurisdiction has its own rules. Likewise, different business types will face different requirements. In general, the more regulated an industry is, the more requirements businesses in that industry will face.
You will need to do some research to determine all the different compliance tasks you will need to handle. Here are some of the most common to get you started:
Utah LLC annual reports – due every year by the day that the LLC was formed. Due for all LLCs in Utah, regardless of industry
Employer tax/payroll tax returns
Federal tax returns
City/county tax returns
Business license renewals
An ongoing registered agent (you must always have a registered agent)
To help stay on top of everything, it’s a good idea to make a list and add reminders to your calendar. Do some research now to determine all the different requirements that you will need to complete, and then make a plan for how you will ensure compliance.
If you use a service like Northwest Registered Agent or ZenBusiness to help form your LLC, they can also help with some of the ongoing compliance requirements. These services can help directly with some filings (like the annual report), and send reminders for others so you don’t miss due dates.
Open a business checking account
Once you have the EIN (see above), you can also open a business bank account. And this should be done as soon as possible after your business is formed. Once you open this account, use it for all business transactions going forward.
Separating business and personal finances is important for a couple of reasons. For one, it makes accounting/bookkeeping much easier, because only business transactions will show up in the account you’re using. Second, it also protects your personal assets as the owner, in the case of a lawsuit against the business.
Most financial institutions, from large banks to tiny credit unions, now offer business bank accounts. Their requirements will vary (most require an EIN, business license, and a small opening deposit), but you should call ahead to see what you’ll need to bring in with you to open the account.