Think about your LLC a year from now: raking in profits and taking Utah by storm. You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees – before you sell a single product, there are startup costs associated with launching an LLC in Utah.
While you’re making plans and dreaming big, make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Utah startup fees here.
Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:
Bare Minimum Cost to Start an LLC in Utah
Optional: LLC Name Reservation Fee
- $22 for online and hard copy filings
Required: Certificate of Organization Fee
- $70 for online and hard copy filings, with expedited processing for an additional $75
Overall Utah LLC Formation Costs
LLC Name Reservation Fee
You don’t need to reserve a business name, but it might be a good idea, depending on your situation. It’s an optional part of the process, so if you’re ready to start your business right away, you’re better off going straight to the Certificate of Organization, which will automatically register your name. On the other hand, if your LLC isn’t quite ready yet but you have a great name in mind, it would be worth paying the $22 name reservation fee.
Certificate of Organization Fee
This is the big one, the most important form that you’ll file to start your Utah LLC. That’s because it officially registers your company to do business in the state. Filing the Certificate of Organization either online or with a paper form costs $70 and will put your LLC on record with the Secretary of State. And if you’re in a hurry, you can pay an additional $75 for expedited processing. As long as your Certificate of Organization is accepted, you won’t need to file it or pay this fee again.
Business and Professional Licenses
Not all businesses require state and/or city licensure, but some do. Even if they have filed their Certificate of Organization forms, these companies cannot do business in Utah until they’ve acquired the appropriate licenses. On the Division of Occupational and Professional Licensing website, you can see which types of business need licensure from state agencies. On top of that, you may need separate licenses from your city and/or county, but you’ll need to check with the local government to find out. License costs vary depending on the type and location.
LLC Formation Service
Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an LLC formation service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services (like ZenBusiness and Northwest) offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
Registered Agent Service
Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with Utah business law. In short, you need an agent you can trust.
While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2000.
Cost variations depend on the experience and location of the lawyer. Given the sheer number of qualified lawyers out there, choosing one can be an intimidating decision. Use a site like Avvo, which provides access to a large database of lawyers so you can compare rates, locations, specialties and more, all in one place. Avvo can help you be confident that you’re hiring the best Utah business attorney for your LLC.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into Utah. Foreign LLCs must file a “Foreign Registration Statement” instead of a Certificate of Organization. All foreign business entities are required to foreign qualify in Utah, or they could incur some pretty severe penalties. Avoid them by filing a Foreign Registration Statement online or on paper before commencing business in Utah. Like the Certificate of Formation, it costs $70 and only needs to be filed once.
LLC Annual Fees
After you’ve submitted all your LLC startup and formation fees, most of the payments are out of the way, but there are still annual maintenance fees to keep your business in good standing, namely the Annual Renewal (or Annual Report). Filing a renewal before the LLC’s anniversary date each year will help the Secretary of State keep their records current and accurate. For a $20 fee, you can file it online or with a hard copy. Plan on making this payment during the month of your LLC’s formation each year.
We’ll start with federal taxes because they’re the simplest. LLCs are classified as “pass-through” entities, so they don’t need to file corporate tax returns and pay federal income taxes. Same goes for state income taxes. Instead, the LLC’s individual members will report income and losses on their personal returns.
Plus, Utah doesn’t impose “franchise” or “privilege” taxes on its LLCs. But this doesn’t mean your LLC is completely off the hook. If it employs workers, it will be subject to a Withholding Tax and Unemployment Tax. Or, if it sells merchandise, it will owe a Sales and Use Tax. Register for the Sales, Use, and Withholding taxes through the Utah State Tax Commission, and register for the Unemployment Tax through the Department of Workforce Services.
If you’ve set up your LLC to be taxed as a corporation, it will also need to file a corporate income tax and pay the corporate income tax, 5% of its net income.
What If I Don’t Pay?
Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
Without filing your formation documents – either the Certificate of Organization or the Foreign Registration Statement – you cannot begin doing business in the state. When it comes time to submit your Annual Renewals, late filings will incur a $10 fine and cause your business to lose its good standing with the state. Without good standing, your LLC can’t foreign qualify in most other states, apply for business loans, renew some licenses, and more. If you fail to reconcile your good standing by reconciling outstanding filings and fees, your LLC can be administratively dissolved.
Unpaid taxes come with their own set of penalties, yet they vary depending on the amount due and the number of days overdue. See this document detailing interest and penalties for more information.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in Utah.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees – like Annual Renewals – so your business doesn’t fall out of good standing.