Ready to start a business in Utah but don’t know where to begin? You’ve come to the right place to learn how to register your Utah limited liability company in five easy steps and to better understand why each part of the process is important.
Registering a business can seem hard and you shouldn’t have to spend your time trying to piece together a puzzle that already exists. Let us give you your time back to focus on building and improving your business for your customers instead of researching how to get a DBA.
In this article we’ll cover:
- How to properly name your LLC
- How to register a DBA for your business and why it’s important
- What an operating agreement is and how to create one
- The importance of a certificate of organization in Utah
- The vital steps you must take after registering your LLC in order to receive the limited liability you seek
Let’s dive in and figure out how to get your business off the ground as quickly as today.
Step 1: Name your Utah LLC
Before you can register your business in Utah, the beehive state requires you to pick a unique name. The state does have a few requirements that you should be aware of when picking a name:
- As an LLC business, you’ll have to include a phrase or abbreviation that clearly represents your business formation type. This means that your name must include “L.L.C.”, “LLC”, or the words “limited liability company”.
- Your name must be unique in the state of Utah. This means that no other business that is active in the state can have the same name you’re trying to register. You can use the Utah business name search to see if there is anyone who has the name you’re thinking about registering.
- Your name can’t confuse your business with a government entity. Keep this in mind when naming your business so that you don’t pick a name that sounds like “State Department”, “Central Intelligence Agency (CIA)”, “FBI”, or any other state or federal government agency.
- You can’t use certain restricted words unless you have proper documentation. Some examples of these words include “college”, “Bank”, “Attorney”, or “Doctor”. You can see a full list of restricted words on Utah’s Department of Commerce site.
Though not officially a requirement when creating your business name, you should make sure that a web domain you can live with is available before picking your final name. Your domain doesn’t need the “LLC” abbreviation but it should have something to do with the name you picked.
Once you’ve found the right name, you’ll want to reserve that name either on Utah’s commerce site or by completing this application. This reserves your name for 120 days before official business registration but it’s also required in order to fully register your LLC. This name registration costs $22.
Registering a DBA For Your Utah LLC
A DBA, or “Doing business as”, is a name for businesses that want different legal and operating names.
A DBA allows the state of Utah to recognize what legal entity is conducting business under the alternate name that isn’t registered with the state. This is for a lot of reasons such as tax filings and so that the state can recognize your business in any future legal matters.
The benefits of a DBA for the business owner include:
- You’ll be able to legally operate under whatever name is more marketable to your customers without the “LLC” abbreviation being part of your name.
- You can manage two, or more, different product-based businesses under the same legal entity without worrying about how different the two names or brands need to be.
- You can change your name if it becomes damaged for whatever reason.
- You can reduce potential headaches when you do your taxes.
Your DBA can be registered through the DBA portal. There is a $25 filing fee associated with registering each DBA. You’ll also need to have a registered LLC before completing the DBA registration if you want the DBA tied to your LLC.
Step 2: Appoint a Registered Agent for your LLC
A registered agent is an individual or a business entity that can accept all legal documents related to an LLC, corporation, or other business entity, including all tax documents and legal notices.
It’s important for every business to pick a registered agent that is available to receive these important documents and correspondence so that your business can respond quickly.
In fact, one of the main requirements of a registered agent is that they must have a physical address and be always available to receive important legal service documents.
If you don’t have an active registered agent with an accurate address where he/she/they can be reached then you could face fines and penalties – up to losing your state business registration.
The question for every business is whether you should choose yourself to be the registered agent or if you should appoint a third party.
Let’s look at the benefits of each.
Choosing Yourself vs a Third Party as Registered Agent
There are benefits to both options – appointing a member of the LLC or a third-party registered agent. The benefits of selecting yourself, or another member of your LLC, as the business’ registered agent include:
- Cost: It costs less than using a third party because you can handle any work that needs to be done yourself.
- Ease: It’s easier to appoint yourself than it is to find the right third party to take on the responsibilities.
Those are the only two real benefits of appointing yourself to be the registered agent of your business. There are some potential consequences though, which include:
- Lack of Privacy: Your name and address will be public information.
- Availability: You must be available at all times, even if you’re sick or on vacation, to receive documents or you could face severe penalties. You may also need a registered agent service if you want to register your business as a foreign LLC in a different state.
- Flexibility: When you use your own address as the location of the business’ registered agent then you’ll have to change it every time you move or change the business address. With a third-party provider, you can keep the same address for the long haul regardless of what happens personally.
Using a third-party professional service as your Utah registered agent is easier, more flexible, and gives you the assurance that someone will always be available whenever anything happens. That is why we recommend it.
These services typically cost between $100 – $300 per year. Check out our Best Registered Agent article for some of our recommendations.
Step 3: File Your Utah LLC Certificate of Organization
The certificate of organization, often called the articles of organization in other states, is the documentation that is submitted and recorded in Utah to form your LLC.
The main purpose of the certificate or organization is to record your business name, the purpose of your business, and your registered agent for public records.
A Utah certificate of organization for an LLC is required to have this information:
- LLC Name
- Address of the business
- Name of registered agent
- Contact mailing address for registered agent
- Name and address of all members
- Signature of the organizer (person filling out the form)
While you can submit a certificate of organization that you create yourself or with the help of an attorney, the online Utah business registration system will automatically formulate a default certificate for you.
You can find a sample Utah certificate of organization on the state’s website.
The filing fees for your certificate of organization to be recorded in Utah are $70, paid online via the registration system to the Utah Department of Commerce. Processing times vary depending on when you apply, but it could take up to two weeks.
You can also elect to mail your certificate of organization instead of filling out the online form. This will take longer to process but the costs are the same. If this is your preference, you’ll send your documentation and payment to this address:
Utah Division of Corporations and Commercial Code
P.O. Box 146705
Salt Lake City, UT 84114
You can pay an additional $75 fee to expedite processing but there is no guarantee of how much quicker your registration will get filed. Once processing and recording are complete, you’ll receive copies of all documents in the mail within 2-3 weeks.
If you would like to avoid the hassle of filing for your LLC yourself, you can also use a professional LLC formation service. Check out our Best LLC formation services article for some of our suggestions.
Step 4: Draft your Utah LLC Operating Agreement
An LLC operating agreement is important because it outlines the functional rules and member responsibilities within the business.
The document should take into consideration any specific needs of each member. This document is the right way to outline who gets access to financial information and who gets to make key operating decisions.
Without an operating agreement, the default Utah rules and regulations will be in effect for your internal business operations. The state of Utah allows both written and oral agreements.
Some of the other important pieces of information that are often included in the LLC operating agreement include:
- Ownership Breakdown: If you have more than one member in your LLC then the operating agreement outlines who owns what percentage of the business.
- Voting Rights: The agreement often breaks down any special arrangements on who has the right to vote on big business decisions (such as selling business assets) and who just owns a piece of the entity.
- Profit Distribution: If any profits are going to be distributed then the terms of those distributions should be outlined in this agreement.
- Ownership Transfer: In the event a member of the LLC wants to sell his/her ownership stake, it’s important to have rules in place that they must follow.
- Powers and Duties: You should outline all the powers each LLC member has and what duties, if any, are bestowed on each member. This makes it clear, from the beginning, what the responsibilities and rights are for everyone involved in the business.
While an operating agreement is not required to register your LLC in the state of Utah, we highly recommended you draft and sign one. This is especially true if your business has more than one member so that there are no disputes or misunderstandings in your internal operations.
Step 5: Get an EIN (Employer Identification Number) for Your Utah LLC
An employer identification number (EIN) is a unique nine-digit number that is provided by the Internal Revenue Service (IRS) and is used to track businesses for tax purposes.
You can think of this tax ID number as being similar to your personal social security number, but for your business instead. Many businesses are required to obtain an EIN, especially if you plan on hiring even one employee.
Bottom line: We recommend getting your EIN when you register your business entity in case you ever need it later.
You should not hire someone to complete the online EIN process for you. This is an easy process that the IRS recommends you do on your own.
Obtaining an EIN is a very simple process that is done through the IRS website. You’ll need the information from your business registration so this shouldn’t be attempted before your registration is confirmed by the state of Utah.
First Tasks After Registering your Utah LLC
Now that you’ve completed the registration process and have all of the paperwork you need to begin operating, you should take the extra steps necessary to fully protect yourself financially.
This means separating your personal and business finances as well as getting protection through needed insurance.
Open a Business Bank Account
The best benefit of registering your LLC is the personal limited liability protection you get from any future liability incurred by the business. This means that your personal assets aren’t at risk, no matter what happens with your business.
In order to fully receive this limited liability protection, you’ll need to separate your personal and business finances, which means opening a business bank account.
Most banks won’t let you open a business bank account without an EIN number.
Here are the main reasons and benefits for opening a business bank account as quickly as possible:
- Personal Protection: If your personal finances are mixed with the business then the business’ creditors could “pierce the corporate veil” and go after your personal assets.
- Proper Accounting: It’s important for your business’s financial performance to be properly tracked. This will make it easier for you come tax season and will help you qualify for any needed funding or prepare for a potential sale in the future.
- Professionalism: When doing business with others, having a business bank account definitely gives them more confidence in you.
- Credit: Having a business bank account and separate finances can help you qualify for a business line of credit or a business credit card, which could be a good safety net for the future.
Get Business Insurance For Your Utah LLC
The next step is to protect your business from future mistakes that could hurt you financially. Finding the right business insurance should give you peace of mind in case an accident happens. The type of insurance you’ll need will depend on what your business does, what assets it holds, and where it is located.
Some of the most common types of business insurance that may be relevant to you include:
- General Liability: Typically covers damage your business does to an individual or other business. Most businesses will need this insurance and for many owners, this will be the only insurance coverage they need.
- Commercial Property: If your business owns any real estate then you’ll need to protect it in case of an accident or natural disaster.
- Professional Liability: Many service-based businesses will want professional liability insurance to protect against any mistakes that might be made.
- Workers Compensation: Businesses with employees will want to obtain workers’ compensation insurance in order to pay their employees for medical bills related to an accident or illness caused by your business.
- Commercial Auto: If your business owns any vehicles then you should protect the assets from potential accidents.
There are plenty more options for insurance coverage so you should speak to an insurance broker to determine what is right for your situation.
Keep Your Utah Company Compliant
After going through the trouble of registering your Utah LLC to gain protection, you will want to make sure that you keep it. Additionally, depending on the city you’re located in or the type of business you have, you might be faced with additional requirements.
Let’s look at the different things we recommend you learn more about now that your registration is complete.
Utah Business Permits and Licenses
Some businesses will need specific business licenses or permits in order to operate. For example, construction businesses will need certain permits to complete each job.
The requirements for specific permits and licenses are mostly broken up by the city your business operates within.
Check with your city directly for specific requirements you might need to fulfill.
Utah Tax Requirements
You can register your business with Utah’s state tax commission so that you can easily pay your business taxes.
Businesses that are single-member LLCs, who expect to receive more than $1,000 of revenue, will need to pay their state taxes once per quarter.
Federal LLC Tax Filing Requirements
Single-member LLCs, by default, will be taxed as sole proprietorships which means your taxes will be passed onto your personal tax return and you’ll be charged the self-employment tax at the current rate. Multi-member LLC will be taxed as a partnership.
You can check with your accountant to see what other tax filing options are best for your situation.
Annual Report and other Filing Requirements
Every year the state of Utah requires your business to file an annual report in order to stay in business. Filing this report costs a $20 state fee and is due on the anniversary of your business formation. A late penalty of $10 will be assessed if you miss the date.
Utah Business Formation Quick Links
Here are some links that we used throughout this article: