The Beehive State is home to more than 400,000 small businesses—no wonder so many entrepreneurs are itching to learn how to form an LLC in Utah.
Utah offers a great environment for starting and running a business, the only thing you need to do right now, though, is get your business off the ground.
Read our article to learn everything you need to know about forming an LLC in Utah, from choosing an LLC name to purchasing the relevant insurance policies.
Choose a Name for Your Utah LLC
The first step in forming an LLC in Utah is picking a name for your company. We recommend picking a name that relates to your business’ service. It should also be easy to remember and pronounce.
Moreover, make sure your chosen name complies with the Utah LLC naming rules and guidelines, including the following:
- The chosen Utah LLC name must include one of the following words: “LLC,” “L.L.C,” or “Limited Liability Company.”
- The chosen name for your Utah LLC must be unique and distinguishable.
- Your LLC name should not include phrases that can confuse it with government agencies, such as State Departments, FBI, Treasury, etc.
You can read the Business Name Conventions and Policies requirements on the state website for a complete list of Utah LLC naming guidelines and rules. You must also ensure that no other Utah business entity uses your chosen name by doing a Utah business name search.
Hire a Registered Agent
Utah requires every LLC to appoint a registered agent.
Your Utah registered agent is an individual or business entity authorized to receive official documents and legal correspondence on behalf of the LLC.
You can appoint yourself as your own registered agent as long as you are over 18 years old and have a permanent address in Utah.
Or you can engage a registered agent service provider to do all the hard work for you. We highly recommend the following three registered agents for your Utah LLC:
Utah Registered Agent
Entrepreneurs looking for an extremely affordable registered agent for their Utah LLC should check out the Utah Registered Agent.
At only $49 per year, Utah Registered Agent offers your LLC all the essential registered agent services, including email notification, an online account, access to pre-filled state forms, and annual report reminders.
Usually, any affordable service comes with some hidden catches. However, you will never need to worry about hidden fees or additional costs with the Utah Registered Agent.
Their Utah office is in South Jordan.
If you are looking for a premium registered agent service provider in Utah, consider choosing LegalZoom.
Although it has slightly higher pricing, LegalZoom offers a vast range of registered agent tools that would be perfect for LLCs with a larger budget to work with. The company charges $299 per year.
One outstanding registered agent feature LegalZoom offers is its Compliance Calendar, which allows you to track all the important dates. LegalZoom’s outstanding IP protection and $1M identity theft insurance will ensure that your Utah LLC remains protected at all times.
What’s more, if you purchase LegalZoom’s LLC formation package, your first year of registered agent services will be only $249.
Popular for its personalized and incredible customer support, Northwest is among our top three recommendations for the best registered agent service providers in Utah.
Its registered agent service costs only $125 annually and includes many features to help your LLC remain compliant, including all the support you need from their Corporate Guides.
Another thing you will love about Northwest is their discounted fee of $100 per year if you use their registered agent services in more than four states.
File Your Article of Organization
After appointing a registered agent for your Utah LLC, the next step is to register your business.
The simplest way to register your Utah LLC is by filing the Article of Organization online with the Utah Online Business Formation System. You will be required to create an account using the name of your LLC, an active email address, and a credit or debit card to pay the online filing fee of $54.
You can also file your Article of Organization via mail. If you choose this option, you must download and accurately fill out the Utah LLC Article of Organization Form. Then send the form together with a money order or check for the $54 filing fee to the following address:
Utah Division of Corporations and Commercial Code
P.O. Box 146705
Salt Lake City, UT 84114
You will need the following information about your Utah LLC to file an Article of Organization:
- The purpose of your Utah LLC
- The LLC name and physical address
- The physical address and name of the appointed registered agent.
- The effective date of the LLC
- The names and street addresses of the initial managers and members
- The names, street addresses, and signatures of the LLC organizers.
Make sure you have everything to hand before you start.
Draw Up an Operating Agreement
An Operating Agreement outlines how your business entity will run.
Although you are not required by the Utah state laws to draft an Operating Agreement for your LLC, we highly recommend creating one. This is important as it defines the procedures for adding or removing members, dissolving the LLC, and other events that may arise during the lifetime of your Utah LLC.
A well-drafted Operating Agreement for your Utah LLC must answer the following questions:
- Who are the members of the LLC?
- Under what circumstances will the LLC dissolve?
- How will the losses and profits be distributed among members?
- Will your Utah LLC be manager-managed or member-managed?
- If your LLC wants to remove or add members, how will it be done?
- What are the voting rights, powers, responsibilities, and roles of each member?
Don’t worry, you can get help from your solicitor to create a detailed and effective operating agreement.
Get Business Licenses and Permits
While a Certificate of Organization allows your formed business to officially and legally operate in Utah, it is not the only legal document you must obtain. You must also comply with the state, federal, and local government laws by acquiring the relevant Utah Business License and Permits.
There are no general state business permits or licenses in Utah. However, some counties and cities may need LLCs to be licensed by the local government.
The license and permit requirements and cost may vary depending on the type of business you are starting or operating.
You will need a professional liability license if your LLC provides certain professional services, such as accounting, landscaping, hunting guides, handypersons, and electrician services. You can check the Utah Division of Occupation and Professional Licensing website for a complete list of all the relevant professional liability licenses.
Acquire a Federal Tax ID
Your Federal and State Tax ID is essential for standard LLC operation. It is also called an Employer Identification Number (EIN), and you can think of it like your business’ Social Security Number.
You will need an EIN for the following reasons;
- Open a business bank and credit account
- Pay federal and state income taxes to the IRS
- Hire employees
- Collect sales taxes
- Obtain certain business licensees
Entrepreneurs who own single-member LLCs in Utah are not required to obtain an EIN unless they have plans to file taxes as a corporation or hire employees. This is because the IRS regards single-member LLCs as “pass-through” business entities.
You can apply for a Federal and State Tax ID online via the IRS (Internal Revenue Service). The application process is straightforward and free.
Open Business Bank Accounts
Once you have an EIN, you can now open a business bank account.
Separating personal and business finances is essential for several reasons. First, it makes bookkeeping and accounting much easier, as only LLC transactions will appear in your account. It also protects your personal assets in the event of a lawsuit against your LLC.
Most financial institutions in Utah, from small credit unions to large banks, now provide business bank and credit accounts. Their requirements will vary (most need an EIN, a small opening deposit amount, an operating agreement, and an article of organization). However, we recommend contacting the bank in advance to inquire about what you need to open a business bank and credit account.
There are plenty of banks in Utah to choose from including the following:
Acquire Utah Business Insurance
Buying business insurance for your LLC in Utah is a vital part of managing business risks. It can also free up your mind to focus on building your business brand.
Standard insurance policies in Utah include the following:
- General liability insurance: You are not obliged to purchase a general liability insurance policy under the Utah state laws. However, if you want to rent a storefront or office, most commercial leases will need it as a condition of the contract.
- Workers’ compensation insurance: Any LLC in Utah with at least one employee must buy a workers’ compensation insurance policy to protect employees against job-related injuries, illnesses, and death.
- Professional liability insurance: While not required by the Utah state laws, businesses that offer professional services, such as health care offices, accounting firms, and law firms, may need professional liability insurance. This protects them against claims of malpractice and other professional errors.
Get a competitive quote for your Utah insurance needs by consulting a comparison site like Insureon.
Consider Buying an LLC Formation Package
If you don’t have enough time or find the above steps complex but want to form your Utah LLC as fast as possible, consider hiring an LLC formation company.
There are many LLC formation companies, each with packages that suit every entrepreneur’s needs.
One excellent option is ZenBusiness. They don’t charge anything for their Basic LLC formation package, and your LLC will be formed in 2-3 weeks. If you have a budget for your LLC formation process, you can purchase one of its two other packages. The Pro LLC formation package costs $199 per year, and you can expect your Utah LLC to be formed in six business days. On the other hand, the Premium LLC formation package costs $299 per year, and you can expect your LLC to be ready in 1-2 business days.
LegalZoom is another LLC formation company providing free and premium LLC formation services. While their Basic package is entirely free, you will need to pay for the state filing fee. You can get more perks by purchasing either their Pro package ($249 per year) or Premium package ($299 per year).
You may also consider Northwest. Their LLC formation includes a registered agent and costs $225 per year.
FAQs About Forming an LLC in Utah
How Long Will It Take to Form My Utah LLC?
You can expect your Utah LLC to be formed in two business days if you file your Article of Organization online and 3-7 working days (which can be expedited to two days by paying an additional fee) if you file via mail.
How Much Does It Cost to Set Up an LLC in Utah?
It will cost you $54 to file your Article of Organization and form your LLC in Utah. You will also be required to pay $20 for your LLC’s Annual Report.
Can I Act as my Own Registered Agent in Utah?
Yes. You can pick yourself as your own registered agent, provided you meet all the Utah state requirements of a registered agent. For instance, you must be over 18 years old with a permanent street address in Utah. You must also be available to accept legal and state documents during all regular Utah business hours.
Can I Form a Single-Member LLC in Utah?
Yes. You can form a single-member LLC in Utah as long as you follow all the requirements and guidelines of forming an LLC in Utah. Fortunately, the steps of forming a Utah single-member LLC are the same as those listed in this article.
We hope this guide has given you an idea of what forming an LLC in Utah entails.
Generally, the LLC formation process is straightforward and only takes a few simple steps to complete.
If you do not have time to go through all the steps or find the process complex, you can hire a top LLC formation company to streamline and speed up the process.