Utah LLC – How To Form An LLC In Utah

A Utah LLC is a legal way to structure your business. A limited liability company provides excellent flexibility and a general lack of formalities that are useful for many businesses. This guide on how to form an LLC in Utah will take you through the necessary steps towards creating your company.

We’ll also cover a few things necessary to ensure smooth operation. It’s worth noting that LLCs can also be used to hold assets like real estate, vehicles, etc.

Here’s how you can start your Utah LLC.

1. Choosing A Name For Your LLC

A Utah LLC should have a name that’s unique and distinguishable from other entities registered with the state. That means the name you want can’t be the same or very similar to an existing business in the state.

A useful step to checking name availability is using Utah’s business name database for your search. This can give you a fairly good idea of whether the name’s taken or if similarly-named entities exist.

Utah LLC Name Designators

Every LLC in Utah must end its name with a proper designator. The allowed designators are:

  • LLC
  • L.L.C.
  • Limited Liability Company
  • Limited Company
  • LC
  • L.C.

Name Reservation Request (Optional)

It’s possible to reserve a name for your LLC in Utah for 120 days, without officially forming the company. To this end, it is necessary to file an Application for Reservation of Business Name with the Utah Division of Corporations. The application can be filed online using the One Stop Registration system or via postal mail.

2. Utah LLC Registered Agent

Every Utah LLC must maintain a registered agent in the state. The primary role of the agent is for service of process, thus they receive legal papers on behalf of the LLC. These include lawsuits, subpoenas, summons, and more. 

The agent must have a physical street address in Utah. PO Box addresses or similar aren’t accepted. Ideally, they should also maintain normal business hours so they can be available when/if service of process arrives.

Given that the requirements are fairly simple, you can get a wide choice for picking a registered agent for your Utah LLC. These could be:

  • Any adult who is a legal resident of the state.
  • Any business entity that is allowed to do business in the state and has an office in Utah.

Commercial registered agents are popular simply because of the convenience. Hiring a resident agent makes things simpler and gives LLCs a more professional registered agent.

3. Forming Utah Limited Liability Company – File Certificate Of Organization

Submitting the Utah Certificate Of Organization is the biggest step to form your LLC in Utah. Technically, your LLC comes into existence the moment the state approves the filing for the Certificate of Organization.

The Certificate of Organization is filed with the Utah Division of Corporations. You can complete this process either online or through postal mail.

Filing online requires the use of the state’s One Stop Registration system. This system will also register the Utah LLC with other government departments, including the Utah State Tax Commission, Department of Commerce, and Department of Workforce Services. 

The cost of filing online is $70.

If you choose to file via mail, you’ll have to download and fill the Certificate of Organization before you can file it with the Division of Corporations. The filing fee is $70.

4. Utah LLC Operating Agreement

Like most other states, Utah doesn’t legally require an Operating Agreement for your LLC. Nevertheless, it remains highly recommended and you should seriously consider getting one.

An operating agreement isn’t just another part of paperwork. It is an important internal document that details the processes of your Utah LLC. The presence of an Operating Agreement shows that the LLC is being managed carefully and professionally. Additionally, it can keep disagreements between members at bay by providing a mechanism for solutions and dispute resolution.

An operating agreement for your LLC in Utah can be as detailed or circumspect as you prefer it to be. While it remains very relevant for multi-member LLCs, single-member companies should have an operating agreement too.

5. Getting A Federal Tax ID (EIN)

An Employer Identification Number is a nine-digit federal tax ID issued by the IRS. Apply for the EIN only after you’re done setting up an LLC in Utah. Once the state has approved the Certificate of Organization, you can go ahead and apply for the EIN.

There is no filing fee or associated cost for getting an EIN. You can get it quickly by filing online. In case online filing isn’t possible, you’ll have to download, fill, and submit Form SS-4.

Submissions for this form are accepted via fax or postal mail. Fax works faster with a processing time of a few days, while postal mail can take several weeks for processing.

Having an EIN is useful not only for tax, but also for the day-to-day functioning of your LLC. Some would say it’s similar to having an SSN for your business. Functions like opening a business bank account, getting business credit cards, hiring employees, and a lot more are dependent on your Utah LLC having an EIN.

6. File Annual Renewal For Utah LLC

Every LLC in Utah must file an Annual Renewal (Annual Report) with the state. The due date of this report is the anniversary date of the LLC. For example, an LLC formed on March 25, 2020, will have to file Annual Renewal before March 25, 2021. And so on every year.

The report should be filed with the Utah Division of Corporations & Commercial Code. A notice is sent to the LLC’s registered agent about 60 days before the renewal is due. Late filing will attract a $10 fee. If the annual renewal isn’t filed, the state may choose to suspend or administratively dissolve the LLC.

You can file the Annual Renewal online. The filing fee is $20.

7. Business Permits, Licenses, And Taxation

The requirement for business permits, licenses, and taxation usually depends on the location of your Utah LLC and the specific industry of operation. Many cities are available on One Stop Registration system, which makes it easier to get relevant business licenses if you file online.

Considering requirements on the local, state, and federal level is important. They may not necessarily be connected, but your LLC needs to stay in compliance.

As for state taxes, Utah uses a flat personal income tax rate of 4.95%. City taxes may often be added on top of existing state taxes. For example, Utah charges 4.85% sales tax, but cities/counties may add a local tax on top of this number. 

For federal taxation, LLCs are treated as pass through entities by default. That means the income can be reported as part of your personal tax returns. However, the form to use will vary depending on the structure of your LLC in Utah. Tax requirements also change if you choose to have the LLC taxed as a C-corp or S-corp.

Unless you’re well aware of the taxation, licensing, and permit requirements, it might be a good idea to hire a professional. A business has to fulfill these requirements, so getting things right is very important.