How to File an LLC: Utah

Utah entrepreneurs ready to make their small businesses official must choose a business structure before filing with the state. Between a C Corp, an S Corp, or a limited liability company (LLC), most choose the latter.

In this article, you will learn everything you need to know about filing a Utah LLC, including how to tell if you have the type of business that can benefit most from this flexible business structure.

Key Takeaways

• An LLC combines a corporation’s liability protections and legal security with the pass-through taxation benefits of a sole proprietorship.

• You must file a Certificate of Organization with the Utah Division of Corporations and Commercial Code to establish your LLC as an official business entity.

• Appointing a registered agent, crafting an LLC operating agreement, and filing for an EIN are critical steps in the Utah LLC formation process.

What Is LLC Formation?

An unincorporated business is often called a sole proprietorship. This business structure doesn’t offer any liability protections that formal business entities enjoy. Choosing a business structure that protects your personal assets is wise if you’re operating a business at a reasonable scale or with any potential legal risk.

A limited liability company (LLC) is the most common structure that fits many types of businesses. We’ll review the advantages of forming an LLC and compare it with other business structures in Utah to help you decide.

What is an LLC?

A limited liability company combines a corporation’s liability protections and legal security with the pass-through taxation benefits of a sole proprietorship. Here’s a look into the four main advantages of an LLC for your small business: 

1. Liability Protection

A business owner who operates an LLC can separate their personal and business assets. If your LLC goes into debt or is subject to a lawsuit, the company can go bankrupt, but your house, car, or personal savings usually won’t be vulnerable.[1]

2. Pass-Through Taxation

LLCs do not pay corporate tax. Instead, an LLC is a “pass-through” entity, so members claim the business income and losses on their personal income taxes. This is a considerable advantage over C corps, which pay corporate income tax while shareholders pay income taxes on their earnings.

3. Management Flexibility

Your LLC can be a single-member LLC or have any number of members, including people, corporations, other LLCs, partnerships, trusts, or estates. As long as all members agree to the operating agreement, there are few regulations for running the business. 

4. Easy Maintenance 

The Utah LLC formation process is simple and inexpensive and can protect you from significant losses. Aside from a small initial filing fee and an annual filing fee for your annual report, your LLC won’t require complicated paperwork or regular board meetings.

Potential Drawbacks of an LLC

While an LLC has advantages, it’s not the perfect fit for every business type. You must create a C corp to finance your business with venture capital or issue stock. Additionally, if you want to expand, you could face complicated paperwork if your LLC operating agreement isn’t explicit about buyouts and ownership transfers.

Some business owners incorporate as an LLC and then elect S corp status with the IRS for tax purposes. Members maintain pass-through taxation and avoid self-employment taxes by earning a reasonable salary as an employee of the LLC. Learn more about this tax designation in our guide for Utah S corps.

Step-By-Step Guide to Starting Your Utah LLC

Before you begin the LLC formation process, review this step-by-step guide to filing an LLC in Utah. Luckily, the Beehive State has a low filing fee and a straightforward process compared to other states.

Step 1: Choose a Business Name for Your Utah LLC

Your business name must be unique and distinguishable from other businesses in Utah. While brainstorming your LLC name, you can use our free name search tool to check if it’s available. The Utah Division of Corporations also has a business name search you can use.

You must follow a few naming conventions when choosing your business name.[2] For one, your LLC name must include one of the following:

• Limited Company

• Limited Liability Company

• L.C.

• L.L.C.

Unlike other states, your Utah LLC name cannot include any of these familiar words: 

• Association

• Corporation

• Incorporated 

• Limited

• Limited partnership

• L.P.

• Ltd.

Is My LLC Name Different Enough?

If you’re wondering if another business name in the Utah database might be too similar, you might want to ensure your name is distinguishable. The Utah Secretary of State will not accept a similar name if you are only:[2]

• Using different business abbreviations (LLC, Limited Company, Limited Liability Company)

• Varying “and” and “&”

• Adding or subtracting “the,” “and,” “a,” or “plus”

• Adding special characters

• Changing capitalization, spacing, and punctuation

• Having singular or plural differences

• Using abbreviations

However, you can use a few strategies to make your Utah LLC name distinguishable from a similar one. We broke down some common ways in the table below.[2]

Distinguishable Utah LLC Names

Reserving Your LLC Name, Domain, and Socials

If you’ve found the perfect name for your LLC, it’s available, and you want to make sure no one takes it while you’re still setting up your business, you can reserve the name for 120 days by filling out this form from the Utah Department of Commerce. It costs $22 to reserve a name and $22 to renew it after 120 days.

You should also check available web domains and reserve the one you want so your business name and website match. Many free services can help, including Squarespace’s free domain search. It’s also wise to check if various social media page names and handles are available to match your LLC.

Ideally, you’ll find a name that seamlessly integrates your in-person, website, and social media branding and marketing materials.

Trademarking Your LLC Name

Are you bringing a unique idea to your industry that others might imitate? To prevent this, consider registering a trademark for your LLC. A trademark gives you the exclusive right to use a particular name for a specific context in your business. 

For example: if you are a sandwich shop and register a trademark for “Crazy Mayo,” competitors can try to copy your recipe, but they can’t put the words “Crazy Mayo” on a sandwich menu.

Trademark Engine is a premier and easy-to-use trademark registration service that can help you through this process. You can also research the paperwork through the U.S. Patent and Trademark Office website.

DBA (“Doing Business As”)

You might not be able to find the perfect name for your LLC, but there’s a solution. You are free to register an “assumed name” that you can use to do business with your customers. DBA registration allows you to work under a different name than the one on your incorporation paperwork. 

In the state of Utah, it costs $22 to register a DBA. You can complete the DBA registration process using this service from the Utah Division of Corporations and Commercial Code. To skip the paperwork, we can do it for you.

Step 2: Fill Out Your Utah Certificate of Organization

You must file a Certificate of Organization with the Utah Division of Corporations and Commercial Code to establish your LLC as an official business entity. To fill this out, you’ll need the following information:

• LLC name

• Business address

• Registered agent details

• Organizer signature[3]

• Optional: Names and addresses of members and managers

• Optional: Intended duration of the LLC

• Optional: Intended purpose of the LLC

State fees for filing your Certificate of Organization amount to $54, payable by check, cash, credit, or money order. You can file the form online with your UtahID account, by mail, fax, or in person at a Utah Division of Corporations office. We can help you file a Certificate of Organization today to save time and difficulty.

Step 3: Hire a Utah Registered Agent

Have you heard of a registered agent? Ideally, they’re not a part of your day-to-day as a business owner. But choosing a Utah registered agent is a critical decision in the early stages of your LLC.

What is a Registered Agent?

Your registered agent is a person that receives legal documents and service of process on behalf of your LLC. If you get sued or in trouble with the government, this is where agencies and courts will send documents to communicate with you. 

Your registered agent must be reliable and responsible enough to notify you of critical legal documents and notices. You’ll rarely hear from your Utah registered agent in a perfect world. But if you do receive legal mail, having someone experienced on your side is essential.

Who Should Be My Registered Agent?

Your registered agent must be an individual over the age of 18 or a business entity with a street address in Utah.

You can technically be your own registered agent, but it’s not recommended. You could be suddenly served with a lawsuit in front of a customer or business partner. Additionally, you could misplace a legal document in the influx mail and miss a court date, worsening a bad situation. 

Prevent these disasters by hiring a registered agent service to ensure that experienced professionals can deal with these documents professionally and notify you as quickly as possible.

Our registered agent services are affordable and have helped thousands of businesses like yours. You can purchase our registered agent service separately or let us file your LLC for you and name us your Utah registered agent.

Step 4: Create an LLC Operating Agreement

Your LLC operating agreement lays out how your business entity will run. Even single-member LLCs should have a written operating agreement detailing procedures for dissolution, adding or subtracting members, and other events that may come up in the life cycle of a small business. 

No laws govern how owners run an LLC as a business entity, so entrepreneurs should put an operating agreement in place. Once all the LLC owners sign it, it sets in writing answers to critical questions, such as:

• Who are the LLC’s members?

• How will profit be shared among the members?

• Will the LLC be member-managed or manager-managed? 

• Under what circumstances will the business dissolve?

• If the LLC wants to add or remove members, how will this be done?

We can create a bona fide Utah LLC Operating Agreement personalized to your situation for a small fee. Answer a few simple questions, and you’ll have one ready to sign before you know it.

Step 5: File for an Employer Identification Number

Your Employer Identification Number (EIN) is critical for standard business operations. You can think of it as your LLC’s social security number. 

Also called a Federal Tax ID, an EIN is required for Utah businesses to:

• Pay Federal income tax to the IRS

• Open a business bank account

• Hire employees

• Apply for a credit card

• Acquire certain business licenses

• Collect sales tax[5]

Member-managed LLCs will still pay Federal income tax with their social security number. This is because the LLC is a “pass-through” business entity in the eyes of the IRS. However, an LLC will pay state taxes with its EIN.

LLCs can apply for an EIN with the IRS online. Multi-member LLCs must name or nominate a responsible party to apply for the EIN with their social security number.[6] Swyft Filings can also help you get your EIN quickly and easily.

Let Us Handle Your LLC Paperwork

Entrepreneurs have busy lives, and delegation is critical to a successful business operation. Enlisting a formation service to file for you is an intelligent investment in the short and long term. You can set your business up professionally, with no oversights or loopholes to trip you up later.

With only a few clicks on your part, our formation service takes care of the paperwork. It makes your LLC official in as few business days as possible. You won’t be set back by costly mistakes or stressed out by tax lingo and confusing government forms.

Our Business Specialists can answer any questions you have throughout the LLC formation process. We store your documents securely in one place, so no vital paper gets lost. You won’t need to hire a separate registered agent service because we’re great at that, too. When it comes time for annual renewal, we’ll send you reminders and help you stay in good standing.

FAQs:

How much does it cost to set up an LLC in Utah?

It costs $54 in state fees to file an LLC in Utah.

How is an LLC taxed in Utah?

Although LLCs can technically elect to be taxed as a C corporation or S corporation, LLCs are by default “pass-through” entities, meaning their members claim the profit or losses from the business on their personal income taxes.

What are the benefits of a Utah LLC?

A Utah LLC enjoys the limited liability protections of a corporation combined with the flexibility and ease of management of a sole proprietorship. It also avoids double taxation, as LLCs are not subject to corporate income taxes.

How do you dissolve an LLC in Utah?

The LLC’s operating agreement will detail the procedure for its dissolution. Once that process is complete, the Utah LLC will file a Statement of Dissolution with the state of Utah Division of Corporations and Commercial Code.

Bibliography

1. U.S. Small Business Administration. “Choose a business structure.” Accessed January 14, 2023.

2. Utah Department of Commerce. “Business Name Conventions and Policies.” Accessed January 16, 2023.

3. Utah State Legislature. “State Code Section 48-3a-202.” Accessed January 16, 2023.

4. Utah Division of Corporations and Commercial Code. “Foreign Registration Statement (Foreign Limited Liability Company) Instructions.” Accessed January 17, 2023.

5. Utah State Tax Commission. “Utah State Business and Tax Registration.” Accessed January 16, 2023.

6. Internal Revenue Service. “Responsible Parties and Nominees.” Accessed January 16, 2023.