If you’re looking for a reliable DIY guide for starting an LLC in Utah, look no further.
Below you’ll find all the information you need to launch your business and handle any associated costs. Follow each step carefully and your LLC will be established and ready to hit the ground running.
That said, the process can be complex, with various filings and costs, so if at any point you need help, you can hire an online business formation service.
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Step 1: Name Your LLC
What’s in a name? Quite a bit, actually. Your business name is your Utah LLC’s identity, its personality, its reputation. Find a name that sticks in customers’ minds – while conveying your brand qualities – and you’ve struck gold. A unique, memorable name can draw in new customers and keep existing ones coming back.
Your LLC name is going to appear everywhere: business cards, marketing collateral, websites, legal contracts, bank accounts, invoices, directories, and much more. So be sure that it conveys your product, service, brand, and values.
While you can (and should) be creative with your business name, there are certain state requirements that it must follow.
Utah law requires that the business name include the words/abbreviations “Limited Liability Company,” “Limited Company,” “L.L.C.,” or “L.C.” But it must not include other business type identifiers (“corporation,” “association,” etc.), or words that suggest affiliation with government agencies, higher education institutions, banks, or the U.S. Olympic Committee (find specific lists here). On top of all this, your name must be distinguishable from every other business name on record with the Division of Corporations and Commercial Code.
Let’s say you search for your LLC name and find that it’s already in use. The following changes will effectively distinguish it:
- Using different keywords
- Rearranging the keywords
- Using unique spellings for keywords
- Using keywords that are similar but not identical and have different meanings
However, the following changes will NOT make your name unique:
- Adding, substituting, or deleting a business type indicator
- Alterations to punctuation, capitalization, and special characters
- Adding or deleting the following words: “the,” “and,” “plus,” “a”
- Switching between singular, plural, and possessive forms of the same word
- Adding or deleting spacing or abbreviations
Consider this: your friend Fanny wants to open a flower shop in Salt Lake City, Utah. The name she is considering, Flowers by Fanny, LLC, is already in use. So she comes up with a new one: Fanny’s Florals and Design, LLC. This name is similar to the original but includes new words, distinguishing it in the Division of Corporations and Commercial Code’s records.
Determine the Name Is Available
Of course, you will only need to make distinguishable changes if your name is already taken. Don’t make the mistake of ordering business cards, creating advertisements, and using a name on documents like the Certificate of Organization without first confirming it’s available. Use the Division of Corporations and Commercial Code’s Business Name Search to see if there’s an existing business using your desired name.
Maybe you pegged a distinguishable name right away, or maybe it took some modifications, but either way, once you have a unique name, you can lock it down by filing a name reservation.
Recommended: Get Your Domain Name
To properly brand your business, you’ll want to acquire the domain name so nobody else can use it. Search for and find the perfect one through GoDaddy.
Optional: Name Reservation
You may have fallen in love with a particular name, but still have some preparation and paperwork to sort out before starting your LLC, and you’re worried that someone will swipe it in the meantime. To calm your nerves, you can reserve that name in Utah for a total of 120 days.
Think about Fanny. After making her name distinguishable, she’s ready to make it official, but if she’s waiting on some paperwork to start her LLC, she can place a hold through Utah’s OneStop Business Registration or by mailing an Application for Reservation of Business Name to:
Utah Division of Corporations & Commercial Code
P.O. Box 146705
Salt Lake City, Utah 84114-6705
Or, for overnight mail:
Utah Division of Corporations & Commercial Code
160 East 300 South (or 160 E Broadway)
Salt Lake City, Utah 84111
Fax is another good option. Just send your document, including a fax cover sheet, to (801) 530-6438.
Step 2: Choose a Registered Agent
Fanny’s LLC is quickly taking shape, and if it’s going to operate in Utah, she’ll need a go-between for state and legal communications. This is called the registered agent.
A registered agent is a key component of your budding LLC, handling all of its sensitive communication with the state so you don’t have to.
According to the Division of Corporations and Commercial Code, “the Registered Agent is a business or individual designated to receive service of process when a business entity is a party in a legal action such as a lawsuit or summons. The Division also sends all correspondence to the Registered Agent.”
LLC taxes, lawsuits, maintenance requirements, and more – the registered agent takes care of it all. If you had to do this yourself, it would pile additional tasks onto your already-full plate. Plus, your agent makes your business available to receive documents even when you’re out of town or away from the office and you foreign qualified your LLC here.
This is especially important if your physical office is outside Utah. But maintaining an agent isn’t just a convenience, it’s required. No LLC can start doing business in Utah without first designating a registered agent.
Now for the practical application, the “how-to.” Simply include your registered agent’s information on the Certificate of Organization. If using a Commercial Registered Agent (one that has registered with the state), you’re only required to list their name, but for non-commercial agents, you must also designate an address.
You have two options for who can serve as a registered agent: an individual or a company.
Individual as Registered Agent
You may think that an individual registered agent would need specialized training or experience, but this isn’t the case.
Anyone can serve as your registered agent, as long as they have a physical address in Utah (not a P.O. box). You can even serve as your own LLC’s agent, provided you are a Utah resident, but an LLC cannot be its own agent.
Registered Agent Service
It can be a lot easier, though, to use an LLC formation service as your registered agent, so we highly recommend it. Not only will they take care of business formation requirements, but they’ll also include a free registered agent service. Or, if you’d rather start your LLC on your own, you can use a national service to cover your agent duties.
During the life of your LLC you may, at some point, need to change your registered agent. Perhaps you want to switch from an individual to a professional service, or maybe your existing registered agent resigns. Either way, you’ll want to make the change as soon as possible because operating without an agent on file can lead to administrative dissolution.
Step 3: File the Formation Documents with the State
This is where the LLC formation process kicks into high gear. Let’s check back in with Fanny.
She’s reserved her unique business name and designated a registered agent, and she’s ready to get her LLC off the ground. It’s time for Fanny to take on the most important LLC document: the Certificate of Organization. This filing creates a record for Fanny’s Florals and Design, LLC with the Utah Division of Corporations and Commercial Code, giving it authorization to commence business in the state.
Utah gives you plenty of options for filing the Certificate of Organization. Whether you want to complete the whole process from your desk, love the reliability of paper forms, or need to get out for some fresh air, there’s an option for you. No matter which option you choose, though, you will need to pay a $70 filing fee.
Completing your application online is perhaps the quickest and easiest way to do it. Just head over to Utah’s OneStop Business Registration portal to get started. Your form will be processed within two days.
Hard Copy Filing
Using a hard copy of the Certificate of Organization is also a valid option. Submit your form and payment by using one of the following methods:
Utah Division of Corporations & Commercial Code
P.O. Box 146705
Salt Lake City, Utah 84114-6705
Utah Division of Corporations and Commercial Code
160 East 300 South (or 160 E Broadway)
Salt Lake City, Utah 84111
Complete and include a fax cover sheet, then fax both documents to (801) 530-6438.
Standard processing for hard copies typically takes 7-10 business days. But if this isn’t quick enough, you can request expedited processing on the cover sheet for an extra $75 fee.
Step 4: Create an Operating Agreement
The operating agreement is the framework that holds up an LLC, the vital underpinning that establishes processes for its procedures, activities, and conduct. Essentially, it serves as your company’s bylaws.
Technically, your LLC is required to maintain an operating agreement in Utah, and going without one is taking a big risk. This agreement is what gives your business stability, legal protection, and legitimacy in the eyes of courts, banks, and more.
Let’s say our friend Fanny sells a percentage of her company to two other owners. Her operating agreement could stipulate how the LLC’s assets would be distributed among them in the case of dissolution. But if she decided to maintain sole ownership, the agreement could be used in court as evidence that the LLC’s assets are separate from her personal ones. These are just two examples, but the operating agreement governs everything from member duties to the tax structure.
If you’ve decided to draft an agreement, there are two ways to go about it:
- Write it yourself. Don’t be intimidated by this option. There are plenty of free online templates that serve as helpful guides. You can create an effective document from most of the templates out there, but our favorite free template is from TRUiC.
- Hire an attorney. If you want to be absolutely sure that you don’t miss any important details, an attorney can write or review the agreement for you, ensuring that it complies with state law, includes all necessary information, and avoids the state’s default laws.
What are default laws?
Each state has its own set of generic, baseline laws for how LLCs should operate. These laws, however, only govern matters not included in your operating agreement. Take dissolution, for example. If your LLC ever dissolves, your operating agreement would determine what happens to its remaining assets and debts. But if you fail to include it in the agreement, the state will make that decision for you.
Because default laws are broad and not tailored to your specific business, they often aren’t in your LLC’s best interest, so it’s best to avoid them by being as comprehensive as possible in your agreement.
Step 5: Get an EIN
There’s simply no way to avoid taxes. In fact, it’s illegal to try, so don’t do it.
Federally, LLCs are classified as “pass-through” entities, businesses that don’t file corporate tax returns, but whose owners include income and losses on their individual returns. Still, there are certain circumstances that require LLCs to pay federal taxes, like classifying as a corporation, hiring employees, or selling merchandise. So, in Fanny’s case, if she plans on hiring additional florists and selling bouquets, she will need to apply for an EIN.
The Employer Identification Number (EIN) is a nine-digit number that the IRS will use to identify your company’s tax accounts, so if you pay any business taxes, it’s extremely important to have one. Click the “Do I need an EIN?” link on this page to see if you fall into this category. If so, apply for an EIN one of three ways:
Need to get this done quick? File online – it’s by far the most efficient method. You can only complete the process between 7 a.m. and 10 p.m. EST, Monday through Friday, but you’ll receive your number immediately upon finishing the digital form. Keep in mind that you will need to provide a valid individual taxpayer number (like a Social Security Number) as part of the process.
You might prefer the feel and security of a paper form. In this case, download Form SS-4, complete it, and fax it to (855) 641-6935. You will receive your EIN within four business days.
Or, there’s always trusty postal mail. However, this is the slowest option, as processing typically takes around four weeks. If that doesn’t deter you, fill out Form SS-4 and send it to:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
Okay, so you’ve filed the Certificate of Organization, designated a registered agent, adopted an operating agreement, and filed for an EIN. Time to start doing business, right? Sorry, there are a couple of additional steps you may need to take first. But don’t worry, you’re almost there!
Step 6: Taxes, Licensing, & Income Reporting
For all intents and purposes, most LLCs will be official after completing all the prior steps. Still, it’s important for business owners like Fanny to keep looking ahead, as there are certain maintenance requirements to keep a Utah LLC running smoothly and in good standing with the state.
Before you start doing business, create a plan for the following potential LLC requirements:
As mentioned earlier, LLCs are almost always classified as “pass-through” entities, which means that they don’t pay income taxes directly to the federal government. That responsibility falls instead on the owners, who must include business income and losses on their personal 1040 tax returns and/or Schedule C. LLCs are flexible with tax structure, so you can choose to have yours taxed like a corporation instead. In this case, it would need to file a separate corporate tax return.
And your state taxes are just as simple. Lucky you! Utah’s income taxes act similarly to federal ones in that they “pass through” to personal tax returns rather than requiring a separate corporate return. You may have heard about other states that impose a tax for the privilege of doing business there (commonly called a “franchise” or “privilege” tax), but Utah isn’t one of them. So, your LLC’s owners/members will report the company’s income on their own individual returns.
You’re not off the hook just yet, though. If your LLC meets certain conditions, there are other business-related taxes it might owe. For example, if your company sells merchandise, it will be subject to a Sales Tax and Use Tax, and if it has employees, you will need to pay a Withholding Tax. Does your LLC fall into either category? If so, you need to register for these taxes with the Utah State Tax Commission either online or by filing Form TC-69.
Plus, depending on your LLC’s location, it may owe a local tax to the city, municipality, or county where it resides. Consult your local government’s website to find out.
The Certificate of Organization may have already made your business legitimate, but your LLC might still need to obtain a license before doing business. This all depends, however, on the type of business you run.
As an example, an athletic trainer looking to do business in Utah would need to seek licensure through the National Athletic Trainer Association Board of Certification. And if our friend Fanny wanted to offer massage therapy services in her flower shop, she would need a license from the Federation of State Massage Therapy Boards. You might not know if your LLC needs any licenses, and that’s okay! Check out the state’s Division of Occupational and Professional Licensing website to find out.
Certain cities and counties require their own specific licenses, so you should also check your local government’s licensure laws.
Once you’ve taken all the steps to start your LLC, you’ll be off and running, making deals and growing the company. But when things are moving 100 miles per hour, don’t forget that Utah requires all of its businesses to submit an important recurring filing: the Business Renewal.
Titled the “Annual Report” in many other states, Utah’s Business Renewal is due every year on your LLC’s anniversary date, the day it was formed. Each renewal costs $20 and you can file online or by using a paper form (see hard copy filing methods above). Late filings incur a $25 fee and can cause your LLC to lose its good standing with the state, so mark the due date on your calendar!
And we’ve come to the end. It’s a long process, and not always easy, but the reward is well worth it. If you’ve made it this far, congratulations! Your Utah LLC is ready for takeoff. So go ahead and start with that big sale, promotional campaign, or business deal. Maybe you’ll see Fanny out there in the business world, selling her beautiful floral creations.
The Best LLC Formation Services
If you want to use a reputable online service to form your LLC, there are dozens of options. We invite you to check out our full list of the best available LLC formation services, but we’ll also share a couple of the most popular options below.
ZenBusiness ($49 + State Fee)
ZenBusiness is the best LLC formation service available. That said, ZenBusiness receives outstanding customer feedback, with more than 9,800 reviews available online and very few negative reviews among them.
LegalZoom ($79 + State Fee)
For most people, LegalZoom is the first name that comes to mind for LLC services due to their massive advertising budget. LegalZoom’s pricing and features may not compete on an equal playing field with ZenBusiness, but its brand power is notable and it receives good customer reviews.
For a side by side comparison, check out our LegalZoom vs ZenBusiness review.
Frequently Asked Questions
What are the business tax rates in Utah?
If your LLC is taxed like a sole proprietorship or general partnership, you’ll need to pay taxes on your business income at the state’s personal income tax rate of 4.95%. If your LLC is taxed like a corporation, you’re required to pay Utah’s 4.66% corporate income tax on your business revenue.
How quickly does Utah process LLC formations?
The Secretary of State should be able to process your LLC’s online formation in as little as 15 minutes, although it could take up to two business days. If you file on a paper form, you can expect them to process your filing within 7-10 business days. The $75 expediting fee for paper forms does significantly speed up the process, but online filings are still generally faster.
How many small businesses are there in Utah today?
The state of Utah is home to more than 300,000 small businesses. Entrepreneurs of all backgrounds and business types find that Utah is a great place to own and operate a small business.
What are the top small business resources and websites in Utah?
The Utah chapter of the Small Business Development Center is a great place to start, as they offer a wide variety of tools and resources for Utah LLCs. The U.S. Small Business Administration’s Utah District Office is another valuable resource, and the state’s small business resource page also has plenty of good info.
Should I form my LLC in Utah, or choose a state like Delaware or Wyoming?
Some people like to form their LLCs in states with favorable legal settings. For instance, Delaware is often seen as the most business-friendly state, as it has an entire court system that’s dedicated solely to business matters. As for Wyoming, this state has some of the most generous anonymity laws for LLC ownership.
However, for most people, your best option is to simply form your business in your home state. Forming in a different state can be a tremendous hassle, and it can add some unnecessary complexity to tax issues as well.
Where Can I Learn More About the Utah LLC Licensing and Permitting Requirements?
Chances are, you’ll require at least one license or permit to operate your LLC in compliance with Utah state law. For more information about business licenses and more in this state, check out Utah’s convenient Online Business Registration portal that registers your business with five state agencies and provides any license applications you may need.
Do I Need to File an Annual Renewal for My LLC in Utah?
Yes. Whether you operate a domestic or foreign LLC in this state, you are required to file a Utah LLC Annual Renewal.
What Is the Total Expected Cost of Operating an LLC in Utah?
The overall costs of operating a Utah LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.
Should I Use an LLC Service, Hire an Attorney, or Form My Own LLC?
The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.
Using an LLC service means your business will be formed by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.
How Do Online LLC Services Work?
Using an online LLC service removes much of the hassle from the LLC formation process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your Utah registered agent.
The service then files your Certificate of Organization with the state to officially form your new Utah LLC.