How to Start a Utah LLC in 2024 (Step-by-Step Guide)

You’ve come to the correct spot whether you’ve been considering creating an LLC in Utah for some time or you’ve only recently made the decision to discover how to do so. Utah has a lot to offer a new firm, including flat income taxes and the Great Salt Lake. Prior to discussing how to form an LLC in Utah, let’s review the most popular forms of LLCs that are offered in the Beehive State.

In Utah, forming an LLC entails the following actions: 

• 1: Name Your LLC
• 2: Nominate Your Registered Agent
• 3: File Your Certificate of Organization
• 4: Get Your Business Licensed
• 5: Create Your Operating Agreement
• 6: Get Your EIN
• 7: Keep Your LLC Active

Step 1: Name Your LLC

You may be creative when naming your LLC, even though the other procedures in the formation of a Utah LLC may seem a little boring. If you’ve already decided on the ideal name, you should check to see if it’s still accessible for usage by doing a Utah LLC search. Among the prerequisites for naming your company are:

• The terms “limited company,” “limited liability company,” or the acronyms “L.C.” or “L.L.C.” must appear in your name.
• Your name needs to stand out from every other name on file.
• Terms or acronyms that suggest affiliation with the government, such as “IRS” or “CIA,” are prohibited.
• Must be written in the English alphabet or translated into the language.
• Additionally, some terms (such “Banking” or “University”) that suggest affiliation with any Utah agency are prohibited.

I know you’re asking what distinguishes a name. In Utah, a name might differ from another by a variety of subtleties, such as rearranging the essential words or using inventive or uncommon spelling. For instance, even if the essential phrases are the identical, “Red Rock Skater Park, LLC” and “Red Rock Sk8er Park, LLC” would be regarded as distinct entities.

A name won’t be discernible if its punctuation is altered, articles are added or removed, the capitalization is changed, or “&” is used in lieu of “and.” If you still have questions, the corporate division of Utah offers more thorough instructions for naming your Utah LLC.

Inside Scoop: While you’re finding out how to create an LLC in Utah, if you’ve already decided on the ideal name and it’s available, you can always reserve it for $22. The remaining 120 days of your reservation are up before you.

Step 2: Nominate Your Registered Agent

Selecting a registered agent is necessary in order for your LLC to receive legal papers and other crucial state communications before filing the Utah LLC registration paperwork. Utah mandates that the agent be a Utah resident or a company with permission to conduct business in Utah.

Any reputable individual or organization may serve as your LLC’s agent. Nonetheless, a lot of LLCs designate a member to take on the role. Choosing your LLC’s attorney is another well-liked choice, since it allows legal assistance to be provided as soon as service is received.

Inside Scoop: There are registered agent services that will receive paperwork on behalf of the LLC if the members of the Utah LLC desire an outside party to act as the agent but the company does not want to retain legal counsel. In order to maintain your LLC’s compliance, the service will also notify you when your yearly filings are due.

Step 3: File Your Certificate of Organization

An LLC must register its business in the state’s system and file a document including information that aids in the identification of the company in order to conduct business in any state. The most crucial step in learning how to create an LLC in Utah is submitting this form. This document is known as the certificate of incorporation in the Beehive State. The following must be on the Utah LLC certificate of organization:

• The LLC’s name
• The main office address
• Name of the registered agent and street location in Utah
• The organizer’s signature

You won’t need to commit the contents of the certificate to memory, so don’t worry. These specifications will be mentioned on the fillable form. You can additionally check out the following optional items:

The LLC’s purpose, duration, and members’ names and addresses

Utah just added online filing and still accepts paper filing via mail or fax. It will cost you $54 to file your Utah LLC’s certificate of incorporation.

Inside Scoop: When you file, you may view the files that the division is presently processing to determine how long the wait time will be. Utah LLC registrations are expected to be processed in about two weeks. However, Utah offers expedited filing if you’re hoping for a faster response. For an extra $75 per file, it is assured to be handled in two business days.

Step 4: Get Your Business Licensed

Completing your Utah company registration is the next step. Your firm is officially established in the state when you file the certificate of formation, but most localities need further license before you may do business there.

The state may also require an LLC to get a sales tax license in specific situations, such as when your business sells goods or provides specific services. To get a license and pay any necessary fees, check with the city in where your company is located. Using Utah’s online filing system, your Utah LLC can apply for several city licenses, including the sales tax.

Step 5: Create Your Operating Agreement

Although it’s not necessary, members of a Utah LLC should draft an operating agreement to document significant business decisions and establish the company’s procedures. This agreement might cover everything from the tiniest specifics, like the day your firm will celebrate its anniversary, to choices about the company’s dissolution. Typical information found in these agreements is as follows:

• Member duties
• Management structure (member-managed or manager-managed)
• Voting procedures
• Initiation of new member
• Transfer of membership
• Day-to-day business operations
• Liability description
• Company finances and accounting

You should have an operating agreement in place even if your Utah LLC has only one member. In contrast to a business plan, which outlines a concept for a firm, an operating agreement is legally significant. Members must abide by the provisions of this contract.

Law in Action: Although there isn’t an operating agreement in existence, Jeff and Jina are co-members of Salt Flat LLC. A verbal agreement was made by Jeff and Jina to never give another party membership in the LLC. A year following the establishment of Salt Flat LLC, Jina notifies Jeff that her neighbor has become a member. Jeff might not be able to stop Jina’s behavior if there isn’t an operational agreement that documents their choice.

Step 6: Get Your EIN

Only LLCs with more than one member or employee are obliged to get an employment identification number (EIN), yet having one might be advantageous to any LLC. This figure not only helps the firm gain credibility with suppliers, but it may even be necessary for it to make purchases on its behalf.

Other significant company activities, such as recruiting staff or creating a bank account, frequently call for an EIN. It is preferable to have an EIN and not need one than to need one and not have one, and applying for one is easy and free.

Step 7: Keep Your LLC Active

Being an LLC owner in Utah is not simply about figuring out how to set one up. You have to comply with Utah’s compliance requirements as well as the requirements of the county in where your business is located in order to keep it operational and allowed to do business.

File Annual Reports

Utah LLCs must submit an annual report for renewal in order to maintain their business status. Every year, by the end of the month commemorating your LLC’s anniversary, the report is due. Sixty days prior to the deadline for your report, the Department of Commerce will mail a notice of renewal. The fee to file is $18, however if it is filed after thirty days, there is a $10 penalty. In as little as fifteen minutes, you may file online.

Your business’s registration will be canceled by the state if you fail to file your annual report within 60 days, resulting in a change to your LLC status to “expired.” In order to lawfully do business again, you will need to restore your LLC if this occurs. 

File Required Tax Documents

There are no tax responsibilities for the LLC itself. Rather, it is passed through to the LLC members, who are responsible for paying taxes on the money they get from the Utah LLC. In Utah, there is a flat personal income tax rate that varies annually.

Employer and unemployment taxes must be paid at the federal, state, and local levels if your LLC employs people. These taxes have yearly fluctuations in rates. You can file for your business by registering it online.

Set Up a Website and Social Media Accounts

Never pass up the chance to develop your brand and increase the size of your clientele. One of the first things you should do after establishing a Utah LLC is get a domain name. Next, you want to think about creating a social media profile for your organization, as having an online presence may help attract customers and revitalize your enterprise.

The Cost of Forming an LLC in Utah

The main outlay is the approximately $70 filing cost for the articles of organization. In order to stay in compliance, LLCs in Utah are also required to submit an annual report and pay a $20 registration fee. Even while these fees are not as high as those in some other states, your firm will still need to pay them on a regular basis. It’s crucial to account for any additional costs you may have, such as legal fees in the event that you decide to retain legal counsel for help with the formation procedure or continuing compliance issues.

Domestic LLC v. Series LLC

For single-member business owners who want the personal asset protection of a corporation but the tax advantages of a sole proprietorship, the limited liability company (LLC) form was developed as a compromise. When an LLC is established, any personal collections that a member may have are kept apart from the LLC’s collections of revenue, assets, and obligations.

For instance, Daphne, the sole member, is the owner and operator of Ski N Things, LLC, a typical domestic Utah LLC. Under her own name, Daphne owns a residential residence as well as a vacation property in Park City. The aggregate value of the two properties is $5,000,000. The combined value of the two rental properties owned by Ski N Things LLC in Salt Lake City is $250,000.

Assume that a rental tenant wins a sum of $1,000,000. The tenant sues Ski N Things LLC for injuries sustained on the property. The renter may be entitled to an award from the $500,000 worth of assets held by the LLC, which would only cover half of the tenant’s potential legal gains. Because Daphne’s personal assets—her primary and vacation homes—are entirely distinct from the LLC, the renter is unable to sue Daphne for the balance.

An “LLC series” expands on the idea of liability. The series can contain several smaller businesses with separate identities, membership agreements, bank accounts, and records, all with the same protections as an ordinary LLC. 

Daphne may have, for instance, created Ski N Things as a series LLC and subdivided each of her rentals (House 1, LLC and House 2, LLC) into smaller LLCs inside it. Then, only House 1 LLC would be required to liquidate in the event that the tenant residing in the property controlled by House 1 LLC wins a lawsuit. Essentially, instead of $500,000., only $250,000 would be subject to liabilities.

Professional LLC

A professional LLC is founded by members who possess the specific licensing needed to carry out the services the firm offers. In Utah, this is referred to as a “professional service company.” Licensed professionals include, for instance:

• Attorneys
• Physicians
• Veterinarians
• Architects
• Real estate agents

Insider information: You may establish a low-profit LLC or benefit LLC if your business is being founded for philanthropic or educational purposes, or if your firm is intended to benefit society or the environment.These organizations combine the goals of a nonprofit with the advantages of limited liability.

The conventional LLC is the ideal choice for the majority of individuals launching a business. The procedures listed here are mostly for forming an LLC in Utah, however they are typically the same for all LLC creation.

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The Bottom Line: Forming an LLC in Utah

In Utah, forming an LLC just takes a few simple steps and is a reasonably uncomplicated procedure. Utah is among the greatest areas to incorporate an LLC since the state offers a wealth of tools, including sample forms and step-by-step instructions, to make the legal process simpler. Examining top LLC formation services may also help to expedite the procedure.

Form Your Utah LLC Today

It’s time to file now that you know how to create an LLC in Utah! You may hire a trustworthy online service to handle all the hard work for you if the processes seem a little confusing or if you just want to do things the easy way. Your LLC will be operational in no time.

Legal Notice: Nothing in this article should be construed as establishing an attorney-client relationship. Although it offers basic legal information, it does not represent expert legal advice for your specific case. You should consult an attorney licensed in your area if you have any legal issues.

Frequently Asked Questions: Utah LLC Formation

What is the cost of forming an LLC in Utah?

The $70 filing fee for the articles of incorporation is the main cost associated with creating an LLC in Utah. In addition, to keep your LLC compliant, there is a $20 yearly report filing charge.

How long does it take to form an LLC in Utah?

The method of filing usually determines how long it takes to process an LLC in Utah. Your articles of organization can be processed in a few working days if you submit them online. Files sent via mail might take longer. For an extra cost, expedited processing choices are also offered.

Does an LLC need to have an operating agreement in Utah?

Although it’s not legally required in Utah, it’s highly advised that LLCs have an operating agreement. Your LLC’s ownership percentages, operating processes, and management structure are all described in an operating agreement. An operating agreement may preserve your limited liability status and assist to clarify the internal workings of your organization, even if your LLC just has one member.