Today, when pondering over starting their private business, more and more entrepreneurs consider opening an LLC as a supportive legal structure for their venture.
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.
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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.
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:
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:
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.
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.
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:
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.
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.
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:
On the other hand, you shouldn’t disregard the potential negatives of being your own registered agent that entangles:
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.
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.
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:
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
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.
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:
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.
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.
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.
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:
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.
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.
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.
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.
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.
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.
A limited liability company is a welcoming legal structure for many businesses. Start an LLC is easy. Select your state to start.