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LLC in UT: LLC in Utah is Preferred by most entrepreneur over corporation as it comes with far less restrictions over rules and regulation. Yet being less restrictive doesn’t mean that forming LLC in Utah is easy, one needs proper guidance to proceed the formation process.
So if you are willing to form LLC in Utah, then follow the 7 steps discussed below and form your Limited Liability Company to get your business into run.
An LLC in Utah basically links an organization’s limited liability with the pliability and shortage of formalities. All these are offered by any sole proprietorship or an association.
We would recommend setting up an LLC in UT for any entrepreneur whose objective is to restrict liability for professional lawsuits and debts.
Not from Utah? Learn to form an LLC in any other State.
Tip of the Day: Utah LLC formation by yourself is mostly hectic and time taking. Hiring a reliable LLC formation service is not only a good choice, but saves you from overspending. Therefore we recommend you to:
Introduction:
Now, what is an LLC? A Limited Liability Company (LLC) unites the best of partnerships, sole ownerships, and corporations into one organizational entity providing full protection to liabilities, tax incentives or flexible business structures, etc.
It only costs almost 70 USD to initiate an LLC in Utah.
All you’ve to do is to submit a certificate of your new business with the State Minister. An entrepreneur can either apply online, drop a mail, or visit the office in person to build a new LLC.
Important Statistics: When You Form an LLC in Utah!
- Corporate tax rate: 5 percent
- Individual income tax rate: 5 percent
- State sales tax rate: 4.7 percent (total sales tax rate in Salt Lake City is 6.85 percent)
- Average effective property tax rate: .58 percent
- Unemployment: 3.6 percent
In this article, we will explain the LLC formation method in Utah. So let’s get started!
Outlining the LLC Formation Process
(7 Steps)
- Pick a Name for Your Utah LLC
- Find a Registered Agent for Your LLC
- Submit the Articles of Organization
- Establish an LLC Operating Agreement
- Follow the Tax and Other Administrative Requirements
- Fulfill Your State Tax Commitments
- Submit Annual Reports
Next, we are going to discuss the steps one by one to make to clear for all of the viewers and new entrepreneurs.
#1: Pick an LLC Name
The first and foremost part of building an LLC in UT is to pick up the right company name. Try to select a name that corresponds to Utah standards and is conveniently accessed by prospective customers.
What Instructions Should Be Followed While Naming an LLC?
- Every business owner should include “Limited Liability Company” to his new company or the abbreviation of it, LLC.
- Avoid using the words that can mystify your LLC name with the government agencies, such as State Organizations, Treasury, FBI, etc.
- Make sure to choose a unique name from other corporations, Utah LLCs, or limited liability parties.
- If you want to fit in a few confined words like an attorney, bank, university, etc., it might demand hiring a licensed lawyer or doctor for additional documentation.
The next step is to verify access to your chosen name in Utah. Make sure if the name is still available or utilized by another entity.
You can visit Utah’s official state website to check on Business Registry Search. Furthermore, one can also generate a name through an LLC Name Generator online.
#2: Find a Registered Agent
Another vital step is to find a reliable Registered Agent to form an LLC in UT.
There are some limitations when choosing a registered agent in Utah. The person should be an Utah inhabitant who would be able to perform your business tasks from within the state.
You may also nominate yourself for the official documentation, but we personally recommend to go for ZenBusiness. Besides offering a free first year of their registered agent services, the company will form your Utah LLC only for $49 plus state filing fee.
#3 File an Articles of Organization
During the formation of an LLC in UT, it’s crucial to submit your articles of organization linked with the Secretary of its State. A general article should cover up the following:
- Name and web address of your LLC’s planner
- The official name and address of Utah LLC
- Details of your LLCs registered entity
- Details of your company members
- The official LLCs emails
- Entrepreneur’s signature
DIY Cost of Forming an LLC in Utah ($70)
The main LLC formation cost through the DIY route is the state filing fee of your Article of Organization. Currently, the state of Utah charges you $70 for filing your LLC and it may be subjected to revision by the state. The filing fee of articles of organization is the same, regardless you submit online or through the mail.
#4: Establish an LLC Operating Agreement
An LLC operating agreement is constitutional paperwork that sketches the rules and regulations for a new company and also outlines the entrepreneur’s operating procedures to form a new LLC in UT.
Although not necessary, creating an operating agreement will benefit a company for sure.
This legal agreement guarantees all entrepreneurs to remain on the same boat, which ultimately lessens further business clashes.
#5: Follow the Similar Tax and Other Administrative Requirements
A few extra taxes and other administrative requirements might implement to your new LLC that includes:
Employer Identification Number – It is just like a Social Security Number, so if your company has more than one employee, you can get this EIN by paying extra. This nine-digit code will check into your tax issues and assist you in creating a new bank account, hiring new staff, etc. One can submit an online form at the IRS website to get an EIN for his company.
Official Licenses – Sometimes, your new LLC in Utah might demand the official state licenses or other approvals, depending on the business type and its location. So, there are Economic Resource Units in Utah leading you to authorities to guarantee proper licensing, registration, or permissions within the state.
#6: Fulfill Your State Tax Commitments
After getting an Utah LLC, there are several responsibilities on a business entity that should be fulfilled. For instance, in a few cases, one has to check with the Utah Department of Revenue (UTDOR) for selling products or assembling sales tax, etc.
For your convenience, UTDOR has an online platform, so you can register yourself from there through Business Taxes Registration Application. For more information, you can review detailed LLC articles on our website.
#7: Responsibly Submit Annual Reports
All limited liability companies in Utah, after their creation, are obliged to submit their annual (or biennial) reports. For more details on how to file an annual report or state-specific fee, read our article on LLC annual (or biennial) report.
Due Date: In Utah, you need to submit your annual report with $20 due every year by the date when you initially registered your LLC with the state.
Late Filings: In case you are unable to submit the required annual report more than 60 days after the due date will result in a $10 late fee. Failure to file an annual report may result in the dissolution of your LLC in Utah.
Additional Information on Forming an LLC in Utah
Register a Foreign LLC in Utah
Entrepreneurs often form an LLC in a state other than the state of their residence to have some tax benefits and reduce LLC formation cost. Moreover, some business owners have their LLC franchises in multiple states. In such cases, they register their LLCs or franchises as foreign LLC in all states where they operate their business.
If you have an LLC in any other state and wish to open a franchise in Utah or want to form an LLC in Utah while you are a non-Utah resident, you can form a foreign LLC online by downloading a foreign LLC application and mail it to:
Mailing Address
Utah Division of Corporations & Commercial Code,
P.O. Box 146705,
Salt Lake City, UT 84114.
Utah Foreign LLC Filing Fee: ($70 – nonrefundable)
Hiring Employees in Utah
To run your business in a compliant manner, you have to follow the State of Utah’s Department of Human Services guidelines while hiring employees for your existing business or new LLC. Some of the major points are stated below;
- Verify the employment status of individuals, such as whether the potential employee is a US resident; if not then are they permitted to work in the US, are they of a certain age to work for that particular job, etc
- Report new hiring to the state
- File quarterly reports on wages and taxes
- Report job refusal
Acquire Relevant Business Licenses and Permits to Operate in Utah
To successfully operate your LLC in Utah, you must acquire permits and license to comply with federal, state, and local government regulations. For instance, to operate a pest control business, you need to acquire a license from the department of agriculture and fulfill the state’s certification requirement, etc
The requirements and fees for business licenses and permits vary from state to state. Work thoroughly on prerequisites and compliance-related information for your business before officially filing your LLC with the state. However, the following resources may help;
- Hire a reliable, professional service like ZenBusiness to do a license and permit search for you. Many LLC formation services do this as a part of their LLC formation packages.
- Visit the US Small Business Administration (SBA) guide for federal license and permit information.
- Utah website’s Devision of Occupational and Professional Licesing section helps you learn the state’s license requirements.
- Visit your local county clerk’s office and seek information about local licenses and permits.
Obtaining a Certificate of Good Standing in Utah ($12-nonrefundable)
A Certificate of Good Standing, aka Certificate of Compliance in Utah, verifies that your LLC has been legally formed and is being operated and maintained in a compliant fashion. This document is needed for;
- Filing your business as a foreign LLC
- Seeking fundings and investments from banks or other people
- Acquiring or renewing relevant business licenses or permits
You can request the certificate of good standing online from Utah’s Secretary of State’s official website.
Dissolve Your LLC in Utah ($0)
In case you no longer wish to continue your LLC in Utah at any point in the future, you must officially dissolve it; otherwise, you may face tax liabilities, penalties, and legal troubles. In Utah, you can dissolve your LLC by following 3 basic steps:
- Comply with your LLC operating agreement
- Close all business tax accounts
- You can hire the best LLC services to make the LLC dissolution process seamless and easy for you. If you want to file yourself, follow the Utah LLC Dissolution guide.
Final Verdict
We hope this article has helped you in every aspect of forming an LLC in Utah. If you still have any questions or confusion, please ask in the comment section.
Alfie Wilson, Esq., is a legal content writer with expertise in business formation, criminal law, veterans disability, family law, DUI law, personal injury, animal welfare, and legal writing. He holds a J.D. from Emory University School of Law and has experience in appellate advocacy and regulatory matters. Alfie’s passion lies in breaking down complex legal topics for a non-lawyer audience. He currently writes for law firms and non-profits on various issues and resides in Arlington, Virginia.
