Having a Utah LLC is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in Utah.
On this page, you’ll learn about the following:
- How to Start an LLC in Utah
- After Starting your Utah LLC
- Utah Foreign LLC
- Why an LLC in Utah
- Top Businesses in Utah
- Utah LLC Formation Review
How to Start an LLC in Utah
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. This section gives you a step-by-step guide on how to start an LLC in Utah.
Step 1: Decide a Name for Your LLC
Deciding on a business name is the first step to start an LLC. In Utah, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the Utah business naming requirements. Once you pass through them, you can successfully name your business.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
- You can only get the EIN number when you have your name registration certificate with you.
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, Utah. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in Utah. The cost of a name reservation is $22.
Important Quick Links:
Utah Division of Corporations & Commercial Code
P.O. Box 146705
Salt Lake City, UT 82114-6705
Fax to: (801) 530-6438
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Step 2: Assign a Registered Agent in Utah
A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal forms, formation documents, any internal document, a notice of lawsuits, and other official government correspondence in Utah. Choosing a Utah registered agent for service of process for your LLC is required.
Make sure your registered agents are residents of Utah. It could also be a business. Here are the recommended agents and employees for you:
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Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Utah. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Certificate of Organization in Utah
A Certificate of Name Reservation is needed to file a Certificate of Organization, as other states call it. You need to make reports of this certificate with the Utah Secretary of State, which costs $70. LLC cost in Utah includes other fees and taxes. You may file them online or by mail.
This Utah Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Utah, like if it is a member-managed or managers-managed. LLCs with employees need to check the Utah government website for guidelines to hire employees.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Utah LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county. To know more about online filing, visit the Utah Certificate of Formation.
How to File by Mail
If you prefer filing real-life forms for your Utah LLC registration, then you can download the Utah Limited Company Certificate of Formation. Read the form thoroughly and fill it out. It will have to fill, among others, your name, city, state, zip code, and signature. You may also file in person by visiting the office on business days.
Mail To: Utah Division of Corporations & Commercial Code
P.O. Box 146705
Salt Lake City, UT 84114
Step 4: Create Your Utah LLC Operating Agreement
A limited liability company operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to an LLC operating agreement Utah does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve Utah LLC later.
Step 5: Filing a Utah LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
And that’s all! Congratulation, you are now done with all the necessary steps to form your Utah LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
After Starting your Utah LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Utah business permits & licenses
- Get liability for business and professional liability insurance with coverage for employees
- File a Utah LLC annual report or biennial report
- Already existing LLCs that wish to operate in Utah must register as Utah foreign LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Utah Foreign LLC
To register a Utah foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, Utah. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check Utah Foreign LLC to know more about having a foreign LLC.
Why an LLC in Utah
Utah State, along with providing a business environment, focuses on giving up incentives to LLCs established in the state. These incentives include business funding options and tax liability reductions. These are enough to keep a business running actively. That is why before choosing any state, you must first go through the benefits of this state.
Foreign Trade Zones of Utah
If you are into the foreign trading business and have registered an LLC in Utah, you must know a foreign trade zone incentive program available in the state. Salt lake city, the crossroads of the west, is the main reason this trade zone is formed. It has several benefits for a business. They are as follows-
- There is some exportation requirement which is not easily fulfilled by a business, but the foreign trade zone program can help in fulfilling all the requirements.
- The storage of products is made easy by the foreign trade zone program, and the time constraint is also removed.
- The businesses save double the tariffs that they have to pay on the important products and machinery.
- Businesses have to bear the direct entry and weekly entry fees in other states, but due to the FTZ, this fee is also saved.
- The custom reporting also gets strong and easy with the help of foreign trade zone assistance.
Recycle Market Development Zone(RMDZ)
If we see the census reports published by the US government, then one fact is obvious that the growth of the use of recycled products use in the country has grown around 4 times since 1980. Due to this, the recycling market has seen steep growth. If an entrepreneur has a business idea related to the recycling of products, they can take the help of the RMDZ program. This program will help in the collection, processing, and distribution of the recycling material, which can again be used in manufacturing. Some benefits a Utah LLC will enjoy due to this program are:-
- On the cost that a business spends on machinery, a tax credit of 5% will be provided.
- On the operating expenses, 20% state tax credit is provided up to $2000.
- Discounts of license fees and assistance in some operation processes are also provided.
- Technical assistance is always open from the side of the government in this business.
Before you start an LLC in Utah, you will get the option of choosing the enterprise zone. A business can enjoy a tax credit of around $200-$750 based on a full-time position offered by the company in this zone.
Top Businesses in Utah
Before you form an LLC in Utah, you should gain overall knowledge regarding the state’s economy. You must at least consider the top business industries and their contributions to the state GDP for knowing the environment better.
Farming businesses are the most important from the point of view of Utah. People think that Utah is a dry land state, but still, it produces a fair amount of crops and earns good profit from them. Crops like Barley that can tolerate low water levels are grown in the state along with livestock rearing. Around 26,000 people are employed in the sector, contributing $3.5 billion directly and $10.7 billion through its manufacturing.
The reason behind tourism has become a vast business of the Utah state is its national parks. If we see the number of national parks available in the state, then the state ranks third. The Utah state is a home of 7 national parks, 2 national recreational areas, 6 national forests, and various state parks.
In the previous year, the state has catered around 136,000 tourists, with the help of which the sector can contribute around $9.75 billion to the GDP of Utah.
The mining businesses in Utah are attracting many people to immigrate to the state and work in their mines. The mines of Utah, like the Bingham mines, are rich in metals like copper, gold, silver, zinc, and lead. Along with that, there is some fossil fuel deposition found in the state having coal, petroleum, and natural gases. The contribution that is made by the mining businesses to the economy of Utah is $2.1 billion from metals and around $480 million from coal.
Some of the best small scale businesses that a person can opt for in the state are:-
- Real estate leasing
- Outpatient clinics
- Dental practices
Utah LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Utah. Click on the steps in this list to read the full detail.
- Name your Utah LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a registered agent
In Utah, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
If you are a resident of Utah, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $70 (domestic LLC) and $70 (foreign LLC), LLC costs in Utah include $20 for Annual Reports every year. LLCs are liable to pay sales tax of 4.85% every year
It takes 1 to 2 business days to get a Utah LLC if you file it online. For the mail filing, it takes 5 to 7 business days to get an LLC.
Every year all the LLC have to submit an Annual Report and pay $20 to the Utah Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens.
Having an LLC is easier than other forms of business. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. On the other side, the formation of LLCs requires less paperwork and fewer legal complexities. If you have any questions, leave a comment below.