How to Start an LLC in Utah: Cost and Registration Steps

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Last updated November 24, 2022
Written by Dmytro Kondratiev
Editor, lawyer
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Today, when pondering over starting their private business, more and more entrepreneurs consider opening an LLC as a supportive legal structure for their venture.

how to start an LLC in Utah

An LLC framework is meant to match modern business realia to the best, hence its growing popularity. It offers ease of management and flexible taxation along with limited liability protections. LLCs need registration and LLC laws are state-specific. Plan to establish an LLC in Utah and doubt that you can handle all the formalities? If so, you’ve come to the right place.

In our article, we’ll explain how to open an LLC in the state of Utah in several easy steps taking into account all the specific formalities valid in this jurisdiction. Besides, we’ll consider the crucial steps you’ll have to take when you register your business officially and are ready to set off on your fascinating business journey. Keep on reading to give your Utah enterprise a quick and smooth start.

How to Form an LLC in Utah: Step by Step

Step 1: Name your LLC

That’s an initial step to take when projecting LLC formation in any US state. Utah is not an exception. The thing is that you can’t register a company without a name and, unlike with sole proprietorships, LLCs are not automatically named after their owners. So, you should take some time and invent a moniker for your future legal entity.

Words You Have to Use

That’s an initial step to take when projecting LLC formation in any US state. Utah is not an exception. The thing is that you can’t register a company without a name and, unlike with sole proprietorships, LLCs are not automatically named after their owners. So, you should take some time and invent a moniker for your future legal entity. While you are free to go creative, there are still certain naming rules valid in the state of Utah that are to be followed anyway:

  • A business structure identifier is an obligatory part of the company name. You can use either a “limited liability company” in full or abbreviate it to “Limited”, “Ltd.” or “LLC”; 
  • The name version you pick for your entity is to be unique within the state. It means no other enterprise operating in Utah could have a name similar to that ou target for your company. To make sure the version you have in mind is available for registration, perform a business name search. You can do it via special search tools usually available on the government websites of the state;
  • A business name should contain no wording that makes reference to any other forms of legal property or governmental entities. Such words and abbreviations as “corporation”, “Inc.”, “State department”, “CRI, “FBI”, and other state agency and authority identifiers are strictly forbidden to be used by private businesses; 
  • Some words related to certain professions, positions, scientific degrees, and financial institutions are also restricted for use in business names. You can use them only subject to having special permissive documentation at hand. These are such words as “ bank”, “trust”, “professor”, “doctor”, “engineer”, “attorney”, etc. A full list is available on the Utah Department of Commerce website.

Words You Can’t Use Starting an LLC in Utah

It often happens that a  business name you target is not unique and you have to figure out more and more name versions until you find the appropriate one. Yet, there are several tips on how to hit the spot from the first try and create the name that will be unique and fit your company to a tee:

  • Skip too long phrases and complicated words, use acronyms instead;
  • Experiment by mixing meaningful words or their parts in new combos that will catch eyes and sound original;
  • Introduce foreign words that will bring some charm and zest while making your business name distinguishable;
  • Use some exquisite words or terms and notions pertinent to geography, science, literature, or art;
  • Making personal names a part of business monikers also helps differentiate the latter from other business names; 
  • Remember that by adding conjunctions, prepositions, suffixes, changing word forms, or using capital letters, you won’t make the name unique. You can do it by replacing keywords with synonyms.

When checking the name for your future venture, it’s advisable that you also check the availability of a domain name. Should you want to build a business website, it will be nice to have an appropriate domain name at hand since this name should align with your company moniker to look professional.

Research the LLC Name You Want

Once you’ve picked a unique business name, you want to be sure that no one will snatch it from you while you’ll be dealing with registration formalities. Putting a business name on hold, you’ll keep it for your company until you are ready to file. In Utah, it will cost you only $22 to reserve a name for a period of 120 days.

Registering a DBA For Your Utah LLC

All LLC owners have the right to register and run their entities under different names. In other words, the same legal entity can have different registered and operating names. Normally, it’s done for marketing purposes. The name under which you file your enterprise with the state is called a registered or legal name while the one under which it will operate on the market and be known to its customers is called a DBA (doing business as), fictitious, alternate, or assumed name.

The benefits and potential DBAs offer to businesses include:

  • DBAs don’t call for an “LLC” identifier and can be anything that will match your marketing strategy;
  • Since you can register as many DBAs as you need, you’ll get a chance to run multiple businesses, establish several brands, or set up numerous product lines under the legal umbrella of the same LLC;
  • While getting an opportunity to build a more complex business structure, you won’t have to dig into complex taxes and still report as a pass-through entity.

Notably, each DBA you are going to use requires state filing. To file for a DBA, though, you need to have an established LLC first. The fictitious name registration procedure is more simple than the initial LLC formation. In the state of Utah, you’ll have to pay $25 for a single DBA registration. The application is usually accessible via the state department website or a DBA portal.

Step 2: Appoint a Registered Agent to Create an LLC in Utah

A registered agent is yet another essential LLC component. It’s your official company representative for handling business correspondence. All LLCs are required to stay compliant with the state, which implies meeting important filing and reporting deadlines, as well as responding to any regulatory letters, notifications, and requests. A registered agent greatly contributes to business compliance since its major role is to receive, accept, and confirm the receipt of legal documents addressed to your business. Be it tax notes, bank letters, filing requests, court summons, law orders, or any other business-related correspondence that needs your consideration and reply, a registered agent makes sure it’s received in time and handled in a due manner.

Despite the importance of the role, state rules in this concern are not too restrictive. In fact, any adult individual including LLC owners or a legal person could serve as your official assignee. The main requirement is that your representative should be a Utah resident and have a permanent registered address in the state. Besides, an agent should be consistently present under that address during normal work hours to be able to personally receive your mail.

A registered agent should be appointed before filing an LLC, and his or her name should be specified in the Articles of Organization when submitting it to the state. Otherwise, your filing application will be declined. The main dilemma for beginner entrepreneurs is whether they should serve their own registered agents or delegate that task to a third party. Sounds familiar? Then, let’s compare these two options.

Serving Your Own Registered Agent vs Hiring a Third Party

To decide which option is a better choice for you, it’s worth looking into the benefits each of them brings. The pluses you’ll get picking yourself or some of your LLC members for this position are as follows:

  • No added costs: Performing this function on your own, you won’t have to pay anything since you’ll handle all the job by yourself. At some point, though, get ready to face a situation when you’ll have to cope with the heavier workloads of a growing business; 
  • Easy choice: Finding a person or legal entity you’ll really trust is not a simple task. Meanwhile, assigning this role to yourself or someone from your immediate circle is a more natural choice. 

On the other hand, you shouldn’t disregard the potential negatives of being your own registered agent that entangles:

  • Privacy risks: Registered agent’s data are to be on the public records. So, your personal data will be made available to the general public; 
  • Lack of flexibility: An agent need to be present at the registered address from 9 am to 6 pm on weekdays. Failure to receive any legal correspondence might have serious legal consequences and lead to penalties. This will affect your personal life and plans one way or another. And what if you decide to expand your business to another state? You’ll need a representative there as well, and you can’t be in two places simultaneously. 

Hiring a third-party agent in Utah, you’ll resolve all of the above-mentioned inconveniences, and rest assured your legal correspondence is duly taken care of. There are a whole lot of professional registered agent service providers ready to help you with that. Their fees vary from $100 to $300, yet it’s definitely worth the comfort and peace of mind you’ll get.

Step 3: File Your Utah LLC Certificate of Organization

The Certificate of Organization or the Articles of Organization as they call it in other states is your major formation doc giving your newly-formed venture an official legal status.

The document is required by the state to finish the filing process and make your company info a part of public records. This way, your enterprise will not only gain a legal framework but also become a part of the business environment.

What to include in my Utah Certificate of Organization?

The Certificate of Organization is a pretty simple standard document that typically covers basic company info. The same is true for the state of Utah. The data you’ll have to mention in your formation instrument include:

  • Full LLC name and registered address;
  • Name and complete contact data of your appointed registered agent;
  • Names and addresses of all company members;
  • The purpose of your LLC in a few words; 
  • Organizer’s signature. Noteworthy, it’s enough that a person who executes the document sings it. Signatures of all LLC members are not required. 

The Certificate of Organization is a standard doc, and you can find a wealth of templates online. So, you can either create a document on your own or hire an attorney to write down this and other LLC-related documents for you. At the same time, the filing system of Utah can work out a certificate for you automatically. Besides, you have an option of sending a certificate of state to the Utah state department in paper form to the following address:

Utah Division of Corporations and Commercial Code
PO Box 146705
Salt Lake City, UT84114 

How Much Is an LLC in Utah

When submitting formation documents, you’ll have to pay a compulsory state fee for document processing and approval. In Utah, the fee is $70, and you can transfer it via an online registration system on the state website. The processing time varies from two to three weeks depending on the overall state department’s workload. You can pay an extra $75 to expedite the process and cut the filing time down to several days. Anyway, you’ll get hard copies of your approved document back by mail within a period of up to 3 weeks.

Want to steer away from the hassle of the filing process and focus on strategic planning and business development? If so, hiring a professional service that will do the formation job for you is a great option. In our Best LLC Services review, you’ll find a number of decent alternatives

Step 4: Draft your Operating Agreement

Many first-time entrepreneurs often disregard this document. Yet, it’s highly important to have it in place. As the name suggests, an Operating Agreement is an operational tool that will help you run your company on a daily basis along with other LLC members. It’s a strong recommendation for single-member LLCs and is crucial for multi-member LLCs.

By splitting the operational rules and member duties and responsibilities, this document creates a solid and well-balanced base for smooth and problem-free business performance. On top of that, an Operating Agreement will enable you to manage your business your way since it has a priority over default Utah laws your enterprise will be governed otherwise. And those rules and regulations are not always favorable for your business situation.

To give you a better understanding of what an Operating Agreement is about, let’s cast a look at its content:

  • Membership structure: The document will clearly specify how the LLC equity is divided among the company owners in percentage;
  • Voting rights: Not all LLC members are entitled to vote. Some of them simply own a share in the business equity and obtain dividends. An agreement will describe the duties and rights of members who can vote on major business decisions;
  • Profit allocation: In LLCs, profits are not necessarily distributed pro rata to the owners’ equity shares. The algorithm of allocating company profits among members is to be set up in the Operating Agreement;
  • Transfer of ownership: Should a member decide to sell an LLC share or leave the company and transfer his or her ownership rights, an agreement will set up the rules and procedures for that;
  • Manager and owner rights, responsibilities, and obligations: Without a proper management structure supported by strict rights and duties breakdown, business management can become a complete mess. Each member and manager should be aware of their powers, authorities, and obligations to efficiently perform their functions in the company.

A good thing is that an Operating Agreement has no particular form and can be drafted as you deem necessary. However, to create a functional document and rip all of its benefits, it’s better to use a professional template or consult a specialist who will help you write down an agreement customized to your individual business scenario.

An Operating Agreement is not a legal requirement for LLC formation in most states. Utah LLC laws don’t call for it as well. However, we strongly recommend that you have it to avoid any disputes and disagreements between the LLC members on the company management and control.

Step 5: Get an EIN to Register an LLC in Utah

An EIN, employer identification number, or a federal tax number is a special identifier code issued by the Internal Revenue Service (IRS) to distinguish between business entities for tax and financial purposes. In a way, an EIN is similar to a social security number for individuals.

Though not a requirement for LLC registration, an EIN is a requirement if you plan to hire workers, open a separate bank account or register for certain types of taxes. Hence, it’s advisable that you get an EIN at the stage of business formation since most likely than not, you’ll need it sooner or later.

Receiving an EIN is as simple as one, two, three. You can do it via the IRS website in a matter of minutes. Fill in a digital application form, and your business EIN will be issued the same day. Just mind that you can apply for this number only when your Utah LLC is already formed.

You can fill in an EIN application form and submit it to the IRS on your own. There is no need to hire any specialist to do it for you.

First Tasks After Creating an LLC in Utah

An LLC is considered established when the formation papers are registered and approved by the state. Yet, to let your enterprise duly function, there are some more steps you need to take. Most of them are aimed at ensuring the financial independence of your legal entity and maintaining its compliance status.

Open a Business Bank Account

Liability protection is the biggest advantage of the LLC structure that makes it so attractive for aspiring entrepreneurs. By drawing a clear line between the company’s and your personal assets, this structure shields your funds and property from any business-associated liabilities while separating your entity from you and giving it legal and financial independence. To further maintain this separation, it’s vital to split individual and company’s finances from the very beginning. This is why you need to open a business bank account for your venture.

Many new businessmen continue using their personal checking accounts for business purposes. Yet, there are quite a few reasons why a separate bank account is better:

  • A higher level of personal protection: When you use the same account for all transactions, there is a risk that mixed finances will be treated by creditors as the company’s assets. Thus, you’ll put your corporate veil at stake;
  • Correct accounting: To create efficient financial plans, properly distribute your company’s budget, and project business growth, you’ll need to keep a close eye on business incomes and expenses. And it’s much easier to do when you have a separate business account;
  • Professional image: A company with a dedicated checking account looks more professional and evokes more trust and confidence in potential customers;
  • Easier fundraising: With a separate business account, you’ll be able to get a bank credit or loan for future business maintenance or capital financing if needed.

Opening a business bank account won’t take you much time and effort. Yet, before contacting a bank, make sure you’ve got an EIN for your company.

Get Business Insurance For Your Utah LLC

While an LLC structure protects its members’ funds and assets, the LLC owners should take care of the added protection for the company as well. This is what business insurance is meant for. It will create a kind of safety net for your enterprise from many future mistakes, wrong actions, and accidents.

There are a lot of different insurance types designed for business. You’d better talk to an insurance expert to select proper policies for your business. Anyway, the most common types include general liability insurance that nearly any business needs, commercial property insurance to protect your company’s real estate, professional liability insurance for professional LLC, workers compensation insurance for LLCs with hired employees, etc.

Keep Your Utah Company Compliant

While a registered agent is a prime part of your business compliance status, there are more elements that ensure the company’s good standing with the state. Let’s look at them in more detail.

Utah Business Permits and Licenses

Many enterprises need some sort of LLC license or permission to operate or perform a certain type of activity in a jurisdiction. You might need a license or permit at a federal, state, or local level. Or you can even need several licenses. To know for sure which types of licenses you need to register for your newly formed entity, contact your city department in Utah.

Utah Tax Requirements

At a federal level, single-member LLCs are taxed as sole proprietorships, and multi-member LLCs report taxes as partnerships. Anyway, business taxes are paid under the personal tax returns of the business owners.

At a state level, you’ll have to register with the Utah state tax commission first to duly file taxes in this state. Besides, one-member LLCs earning over $1000 will have to report taxes on a quarterly basis.

A consultation with a professional business accountant will help you find the best taxation method for your Utah LLC.

Annual Report and other Filing Requirements

All states require businesses to file state reports to keep their track records up to date. Some states call for annual reports while in others, it’s enough to file a business report once in two years. In Utah, you’ll have to submit reports annually and pay a $20 fee for that. A reporting date in Utah is the date of your business formation. Failure to report in time will cause a $10 penalty.

Start an LLC

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FAQ about Utah LLC Registration