How to Start a Series LLC in Utah
The series LLC is a relatively new business structure, but it has already become extremely popular in the country due to the many advantages it offers. Need advice on how to get a series LLC in Utah in no time and without stress? If so, our guide has you covered.
In this article, we’ll not only give clear instructions on how to form an SLLC in Utah but also prompt you on the next steps after the SLLC registration, so you can get your business up and running with little to no effort on your part.
How to Get an SLLC in Utah: Step by Step
Overall, the process of forming a series LLC in Utah isn’t all that complicated. However, because it involves more steps than one, you may want to follow some kind of a guide to make sure you’ve done everything correctly.
That’s where our step-by-step guidelines come in handy. Below, we go through each step, from giving your company a name to the paperwork that needs to be done straight after the SLLC formation, so you have a detailed plan to stick to. Read on for more!
Step 1. Name Your SLLC in Utah
First off, you should pick a name for your company. Make sure that you choose a name that evokes something about your branding and is easy to remember so your customers can easily find you when they need to. Besides, consider the following naming rules:
- Any business entity in UT is required to include words such as LLC, L.L.C., or even the phrase “limited liability company” in the business name;
- It’s prohibited to use words such as “state”, “federal”, and the like that may mislead the public into thinking your company provides the government service;
- Also, the use of words related to specific professions, like “doctor”, “accountant”, etc. is not allowed, unless you are licensed to provide that type of service;
- Surely, the name you’re going to use for your business must be unique. Therefore, it’s important to check if it’s not already been taken by someone else;
- You can reserve the company name for up to 120 days by filing an application with the Secretary of State and paying a fee of $22;
- Obviously, it’s a good idea to select a company name that isn’t too long, is easy to spell, and that you personally like;
- Plus, it’s highly recommended to buy a URL that includes the name of your business, which you will most likely need as you start to operate your company.
It’s also worth noting that you have the option of getting a DBA name (also known as a trade name) in Utah. You don’t have to do this right away, but if at some point you decide you’d rather use a different name than the legal one, this option is available.
A DBA name can be obtained by filing with the Utah Division of Corporations online or by mail and paying a fee of $22.
Step 2. Hire a Resident Agent for Your SLLC in Utah
Once the company’s name is chosen, it is time to find a registered agent. Simply put, a registered agent is a point of contact between your SLLC and the government, appointed to accept and deal with your business correspondence.
According to state law, anyone with a proven street address in the state of Utah who’s at least 18 years old can act as a resident agent if they can be present during work hours at that address. This gives you quite a wide range of options for who you can hire:
- Your friend, partner, relative, colleague, or even your neighbor (if they don’t mind doing paperwork for you);
- A business consultant or accountant;
- A law firm or attorney;
- A professional RA service provider;
- You can be a resident agent, too.
As you can see, even you can be your own statutory agent if handling business correspondence doesn’t seem overwhelming to you. In general, however, most SLLCs are far better off hiring a professional RA who can take this hassle out of the way.
What’s more, hiring a resident agent provider offers a bundle of other remarkable advantages, including:
- Privacy. The information you put on your public records will be about your resident agent and not about you, so you’ll have more privacy;
- Flexibility. You will have the freedom to organize your business hours as you see fit without having to commute to the office at inconvenient times;
- Maintain good standing. Falling behind the compliance calendar will be the least of your worries as a resident agent will make sure your reports are filed in due time;
- Maintain a great reputation. What’s more, you will not have to do secretarial work in front of your clients, which will give your business credibility;
- Extend to other states. With resident agents that operate in virtually all US states, establishing your business in a state other than Utah will be easy and stress-free.
Step 3. File the Articles of Organization for Your SLLC Formation in Utah
The next step in settling up a series limited liability company in UT is filing the Certificate of Organization.
This is a legal document that is submitted to the Utah Department of Commerce, Division of Corporations and Commercial Code to officially establish the fact of an SLLC registration.
Preparing this document isn’t hard, however, if you need a hand, you can always reach out to a business consultant or lawyer who will make sure the information included is correct and filled the right way. In all, the Certificate of Organization must include the following details:
- Your business name;
- Your company’s registered address;
- Information about your statutory agent;
- The management process within the company;
- The purpose of business;
- The date of your SLLC formation;
- All members’ signatures.
Please note that when creating an SLLC in UT, you will also need to state in the Certificate of Organization that your company will have one or more series of assets subject to limitations.
Other than that, the process is pretty much the same as forming a traditional LLC. Once the form is filed and a filing fee of $54 is paid, you’ll need to wait for around 3-7 business days to get a certified copy back. If you pay an extra $75, you can get it done within 2 days.
Step 4. Create an Operating Agreement
Compared to the Certificate of Organization, an operating agreement isn’t a required document, but having it can be quite beneficial for pretty much any business entity, regardless of its structure. The advantages of an operating agreement are numerous:
- Firstly, it allows you to set out your own company’s rules, thus, overriding those that would have been automatically applied to you upon the company’s registration;
- Secondly, it helps in resolving disputes by determining the obligations of each member and the fate of the company in the event of its dissolution;
- Operating agreements can also be used to describe the process of distributing profits from a business among SLLC members;
- Besides, if you create a carefully written operating agreement with a clear business strategy, it can help you attract the attention of new partners and investors;
- With regard to SLLCs, operating agreements can further elaborate on the structure of your business, providing more details on how many series your SLLC has.
Step 5. Get an EIN for Your Series LLC Registration
Whether you’re planning to hire employees or not, you’ll most likely need a federal taxation number (known as EIN). The EIN is a nine-digit number appointed to small businesses for reporting and tax purposes and is also needed for:
- Opening a business bank account;
- Protecting your personal assets from liability;
- Keeping track of taxes.
Cost to File an SLLC in Utah: How Much Is an SLLC in UT
By and large, the cost to open an SLLC in Utah may vary largely, depending on the nature of your business, location, and the services you use. That said, most of them fall into the following groups:
- Obligatory. As the name suggests, these are the costs you will need to pay to file an SLLC and legally operate it in the state;
- Optional. All other expenses that may occur once you start your business are considered optional.
To make it a tad bit easier for you to understand how much a series LLC in Utah costs so you can plan ahead for your expenses, we’ve broken down all the expenses involved in creating an SLLC into a detailed chart below.
| Service | Cost |
|---|---|
| Certificate of Organization fee | $54 |
| Registered agent fee | $0-$300 per year |
| Annual report fee | $20 |
| Name reservation fee (optional) | $22 |
| Certified copies of documents fee | $12 + $.30 per page |
| Certificate of Good Standing fee (optional) | $12 |
| DBA name fee (optional) | $22 |
| Articles of Amendment fee (optional) | $37 |
| Articles of Dissolution fee (optional) | $0 |
| Other permits and licenses | Varies depending on the business activity |
In general, a Certificate of Good Standing isn’t a mandatory document, but there may be a time when you need to obtain it.
More often than not, it’s required by bank officials as proof that your business is registered under the state and has been kept in good standing. It can also be needed when adding a new branch of a series to the parent LLC, for example.
To request a Certificate of Good Standing, you can go to the website of the Utah Secretary of State and file an application online or by mail for a filing fee of $12.
First Tasks After Starting a Series LLC in UT
Now that the paperwork is done and dusted, and you’re ready to finally get down to work, it’s worth taking some time and going through a few more things that can help make your business a success. Let’s jump in.
Find an Accountant
Forming an SLLC is fairly easy, while managing finances is not. Therefore, the best thing to do is hire a professional accountant who will be responsible for the accuracy of the information in the reports and the distribution of the company’s funds.
What’s more, an accountant can act as a business advisor, providing data-driven insights into a company’s performance, which will allow you to focus on the services that generate the most profit and eliminate those that don’t deliver the desired outcomes.
If you have difficulty understanding taxes, an accountant can provide help with this, too. More to that, they can lend you a helping hand with preparing regular reports so you have no hassle of handling business paperwork.
Open a Business Bank Account
While you can skip the step with an accountant, you can’t skip the step of opening a business bank account. In fact, this is the most important step in creating a business as it draws the line between your personal and business assets and ensures liability protection.
Furthermore, it’s necessary to have a dedicated business bank account for each cell LLC in the series. This is the only way to protect the finances of one business activity from another and ensure that the series will remain intact if one of the child LLCs is sued.
Opening a business bank account is quick and easy. All you need is to provide:
- Your EIN number;
- The certified copy of your Certificate of Organization;
- An operating agreement that outlines how many series your SLLC has.
Acquire Insurance
Workers’ compensation insurance is a must for any business entity that hires employees. Essentially, this insurance serves as a wage replacement that your employees may need in case of an accident at work or illness.
Aside from that, you may want to get general liability insurance. As you can easily guess from the name, this insurance protects the business from any general claims that may be placed on your SLLC once you start operating it.
If you use or plan to use a vehicle for business purposes, you’ll need to get car insurance, too. Additionally, if you use any particular trademark, it may be a good idea to protect it by acquiring indemnity insurance.
Keep Your Company Compliant
Keeping your company compliant is essential not to face penalties and prevent the company from being involuntarily dissolved, which may happen if you fail to submit your annual reports before the due date. In UT, it’s the date on which an SLLC was formed.
You can file annual reports online by completing a downloadable form or send them by mail or fax. In addition, you only need to file reports for the master LLC, which takes some of the paperwork out of the equation.
Aside from that, you will also need to file income tax returns at the intervals that will be specified after you register your SLLC in Utah. Note that these reports must be submitted whether you’ve made any profit from your business or not.