How to Start an LLC in Utah
How to start an LLC in Utah in 6 easy steps
Step 1. Naming Your Utah LLC
The biggest roadblock to starting is getting the ball rolling. There are lots of things that need to be done before you can open an LLC in Utah, but we’re here to help. While the process will take a few months from start to finish, it’s better to get going sooner rather than later.
Name Your Utah LLC
The first thing you need to do is come up with a name for your LLC. We also recommend coming up with a unique name because a lot of names are already in use, which can slow the process down and make creating an LLC more hassle than it needs to be.
Still, coming up with a name for your LLC is straightforward once you have a few ideas. You just have to be aware of restricted words, what can happen if you use the same name as another company, and what designations you need to have in your name to be legitimate.
Legally Required Designation
First and foremost, LLCs in Utah are required to have a name designation. In other words, your LLC must have a designation like a company, LLC, incorporated, company, or corporation. These designations make it clear to consumers that you have an LLC.
While this makes it challenging to come up with a name, you don’t need to worry about it too much. One easy way to include this is to attach the designation at the end of your name.
Here are some examples of how you can do that:
- Burgers Incorporated
- Burgers LLC
- Burger Corporation
Keep in mind there are many combinations you can use, so it’s really down to what you want.
Reserving the Name
Utah also gives you the ability to reserve your company’s name. This gives you a chance to think about your name, business plan, and if you want to pursue it in the future. Reserving your name also prevents other people from using it for their company: we recommend going this route if you have come up with a popular and generic name.
That said, there are some rules and restrictions you need to be aware of. In Utah, you can reserve your proposed name for up to 4 months (120) days. To make a reservation, you can file online here; you’ll also need to fill out the application for the reservation of a business name.
Unique Name
Naming your company is about more than conjuring it into existence. It needs to be a unique name that makes your company stand out from other companies in your market. Moreover, a good name can entice consumers to check out your business.
Finding a good name is challenging, though, because there’s a chance you’re not the first company in your market. Furthermore, it’s possible that your name is already in use. The good news is that you can use Utah’s business name database to help you determine if your name is unique. Still, we always recommend having a backup option.
It’s also important to know what companies can do when it comes to names and similar names:
- As long as the name is not identical, companies can choose a similar name. To prevent this, you can make sure your name is as unique as possible and hard to copy.
- When checking to see if your business name is available, you should also check the URL. Having a website can help your business expand, so you want to make sure you can host a domain with a similar name to your company.
Choosing a name seems like a lot of work, but it doesn’t have to be. If you take your time and fill everything out correctly, you shouldn’t have any issues.
Restricted Words
When naming your LLC in Utah, there are restricted words to be aware of. If you use these words in your LLC name, you’ll be liable for penalties. Furthermore, the state might not even let you open your company if it has a seriously restricted word in it.
The rules on restricted words vary across the US, but Utah follows similar rules as most states. For example, words that relate to government organizations or buildings are off-limits, and names that have racial slurs or other forms of hate speech are not allowed.
If you’re not sure what to expect, here are some examples of restricted words for LLCs in Utah:
- IRS
- FBI
- NSA
- OSHA
While these are only a few examples, anything similar is off-limits.
Step 2. Choosing a Registered Agent
If you want to start an LLC in Utah, you’ll also need a Resident Agent, which is someone who will act on behalf of the LLC. Resident Agents have roles that include tasks like:
- Tax paperwork
- Collecting legal documents
- Filing reports
- Handling other paperwork
- Providing an address
While it may seem strange, having an RA makes sense. The state wants to make sure there is someone who can be held liable for the company’s operations. While LLCs provide a liability shield for the owners, someone still needs to be held accountable when there are issues.
The good news is that Utah provides a lot of choices and options. This makes it easy to find someone you can trust if you don’t want to choose yourself.
Here are some common people that most companies will use for Resident Agents:
- The owner
- A close acquaintance
- A friend
- Family members (18+)
- Other businesses
While you have many options for choosing a Resident Agent, it’s usually best to work with someone close to you. This prevents complications and makes it easier to work through issues.
Step 3. File Your Articles of Organization
Once the ball is rolling, it’s time to get into the complicated parts of opening an LLC. One of the first things you need to do is file a Certificate of Organization for the state of Utah. While every state has a unique form, it’s similar across the board. The main difference in Utah is that it’s called a Certificate of Organization and not Articles of Organization.
To begin the process, you need to file the Certificate of Organization with the Utah Division of Corporations. You can file in person or online, and the fee for each choice is $70. While that may seem steep to file paperwork, it’s rather inexpensive compared to states like Maryland or Alaska.
Information Needed
When you start the form, you’ll notice that it asks for a lot of information. Utah wants to be thorough, which ensures everyone is safe and that everything is up to code. Therefore, when you get ready to file, make sure you have all your information, licenses, and permits handy.
Here is a list of what you’ll need to fill in the Utah Certificate of Organization:
- The name of your LLC
- The address of the LLC’s primary office or location
- The name of the Registered Agent
- The address of the Registered Agent
- A signature from the organizer
- Addresses of members
As long as you have this information handy, you shouldn’t have to worry about opening an LLC in Utah. In fact, once the forms are filled in, the process becomes even easier and more streamlined.
How to file
To file the Certificate of Organization in Utah, you have a few options. These include online filing or mail-in filing. Both options cost the same, but there are some things you need to know about both parts of the process.
Mail-In
- Mail-in filing will cost you about $70 (not including postal)
- It will take a few months to process
- There might be delays from Covid-19
Online
- Online filing also costs $70
- It usually takes 1-3 business days to process
- Most payment methods and card types are accepted (Visa, Mastercard)
- Utah does not provide a refund for filing online
The good news about Utah is that the price does not change based on the way that you file. So, feel free to file in the way you’re most comfortable with.
State ID number
Once you file your Certificate of Organization, the state will spend time reviewing the paperwork. If everything is in order, you will receive a state ID number assigned to your company. This ID number will be used to keep track of your LLC, so make sure you keep it handy to prevent any issues.
Your LLC’s state ID number will also be used as an ID for your company. This means that you’ll need it to verify information with the government, IRS, and other organizations. So, make sure you become familiar with this number.
Step 4. Create an Operating Agreement
Utah does not require you to create an Operating Agreement. This means you can skip this step and move on to [ANCHOR #Get-Tax-ID-Number]the next section.[END ANCHOR] That said, you should stick around because an operating agreement can help you protect yourself and your company if any issues arise.
Operating agreements are important because they outline the basic structure of your LLC. These documents are used to help your company with the basic rules of operation. Moreover, an operating agreement can shield owners and members from any liabilities that the company has. An operating agreement can also help owners with tax advantages.
Still, obtaining one is not always easy. To create an operating agreement, you’ll need:
- The LLC’s bank account information
- The creation date of the LLC
- The primary business address
- How the LLC will be operated, managed, and the rules of operation
- Manager addresses and names
- The name of the LLC
Once you have access to this information, you can file an operating agreement.
Step 5. Get an EIN/Tax ID Number
Once everything is in order, the next thing to focus on is the tax ID number. While an LLC can provide tax advantages to the owners, the company needs to keep the books and pay taxes on earnings each year. For an LLC to do this, it needs a tax ID number, which is assigned to the company by the IRS.
While tax ID numbers are mostly used to pay taxes, they do come with advantages. Companies can use the number to do things like:
- Create accounts at a bank
- Open payment services
- Hire employees
- Pay taxes
A tax ID number is a necessary tool for your LLC, and getting one is easy. You can file by mail or even online.
Online
The fastest way to get your LLC up and running with a tax ID number is to file online. You can access the IRS EIN assistant here. All you have to do is follow the step-by-step process and you’ll be ready to go.
Here are the requirements:
- You need to name the registered agent, the owner, or another responsible party’s social security number.
- If your LLC is not yours, you won’t be eligible for a tax ID number.
- If the LLC is outside the country, there are extra steps you’ll have to follow.
Fax
While filing online is the fastest way to get your tax ID number, you can also file via fax. This is the second-fastest way and only takes the IRS a few days to verify the information and approve your company.
Here is what you need to know before you file via fax:
- It will take roughly four days with an IRS Form SS-4
- Applicants that aren’t from the United States need to list “foreign” on 7B of the SS-4 form.
- The application can be faxed to 855-641-6935.
The last option you have for filing your tax ID number is to do it via mail. While this is a viable option, we don’t recommend it because of how long it can take. For example, it can take the IRS months to process mailed-in documents.
You can file for your tax ID number in whichever way is the most common for you. That said, just make sure it’s on your list of priorities or you can end up in trouble.
Step 6. Keeping Your LLC Running
Every state has a set of requirements that LLCs must follow to stay up to date. While Utah has similar rules as most states, it does have some unique laws in place that you need to be aware of. We’ll show you how to file an annual report and how to handle taxes or fees.
File an Annual Report
The most important thing to cover is the annual report, which is required by the state. This report needs to be filed on the anniversary of the LLC, and it should be submitted 60 days before that date to prevent issues and late fees — especially if processing takes extra time.
Fees & required information:
- There is a $15 fee for the annual report
- Form 1 applies to LLCs
- Requires the name and address of the LLC
- State-issued ID number
Timing & penalties
When filing your annual report, make sure you do so 60 days before your LLC’s anniversary. This will prevent any complications and ensure you don’t pay a penalty. In Utah, the penalty for filing late is $10.
While $10 seems light, things get much worse if you fail to file each year. For example, the state can decide to disband your company. Therefore, we always recommend filing on time to avoid any fees.
How to file
In Utah, you have two choices when it comes to filing: you can do so by mail or online. We always recommend filing online because it’s a much faster process. That said, you can choose whichever option makes you the most comfortable.
Get Necessary Permits & Licenses
There are many business models you’ll come across when starting an LLC. While some businesses don’t require permits, most will require a license or permit if you want to build something. Furthermore, companies like restaurants need a license to sell food and liquor. Moreover, businesses like restaurants also need to remain compliant with state guidelines.
Utah has many different counties and regions. Unfortunately, each county has its own laws, rules, and regulations that companies need to follow. Therefore, we recommend reaching out to the county you plan to operate in to get the best results and information that you need. You can find all the numbers for each county here.
Pay Federal, State & Local Taxes
One thing an LLC must do is pay state and federal taxes. While some states have a fluctuating tax bracket, Utah is more lenient when it comes to corporations and LLCs. In Utah, an LLC must pay a flat rate of 5% or $100 — whichever is greater. That said, people within the company also have to manage their own personal and federal taxes.
If you have taxes due with no way to file, we always recommend working with an accountant. They can make the process simple and prevent tax issues. Moreover, a good accountant can help you and your business save money each quarter or year.
Keep Business & Personal Finances Separate
When you own an LLC, you need to keep your money and bookkeeping in order. This will prevent issues during tax season and can save you money if other issues come up. Furthermore, the purpose of having an LLC is to keep liabilities away from you and to put them on the company instead. Therefore, it’s always smart to keep your money separate.
The good news is that it’s easy to keep your finances separate. This is because you can open separate accounts for your LLC once it has a tax ID number. For example, you can open savings accounts, investment accounts, and even general checking accounts. Still, make sure you listen to your bank or accountant to see which accounts are the best fit for your business.
To open an account at the bank, you’ll need some paperwork that includes:
- Approved Articles of Organization for Utah
- EIN confirmation
- Your ID (driver’s license)
- Your address
- Your business address
If you know your LLC’s basic information, you shouldn’t have any issues opening up accounts and keeping your money separate.
Open an LLC Today!
Opening an LLC can be both stressful and exhilarating. On the one hand, opening an LLC can take your business to the next level and expand your operations. On the other, opening an LLC requires a lot of paperwork and understanding. The good news is that if you made it this far, you’re all set and ready to go. So, set up your LLC today!
Utah LLC Resources
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- Naming your LLC: https://corporations.utah.gov/business/bncp.html#:~:text=Limited%20Liability%20Company%20%2D%20The%20name,L.L.C.%22%20See%20Utah%20Code%20Ann.
- Forming your LLC: https://corporations.utah.gov/business/llc.html
- Getting federal tax ID number: IRS EIN assistant
- Filing a Utah annual Report: https://secure.utah.gov/abr/login.html
- State, county, and village permits: http://www.cityapplications.com/business-licenses/UT-Utah/biz-Utah.html
- Federal licenses/permits: SBA list of federal licensing and permitting agencies
- Federal income tax withholding calculator: IRS income tax withholding assistant
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Utah LLC FAQs
We’re sure you have plenty of questions: setting up an LLC is a complicated process. Luckily, we have the answers to some of the most common questions below!
Starting an LLC is less expensive than in most states. The fee to start an LLC in Utah is $70, which is paid to the Utah Department of Commerce. While other fees come into play at different times, the initial cost is just the $70 filing fee.
Utah LLCs typically pay a fixed rate percentage each year. Currently, Utah LLCs will pay a 5% flat rate. If the flat rate does not equal $100 or more, there is a flat tax of $100.
In Utah, all LLCs must file an annual report. The report should be filed within 60 days before the due date to prevent any processing issues or delays that come up.