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The Limited Liability Company (LLC) is a popular business entity choice structure for many businesses starting in Utah The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in Utah without an attorney.

Unlike a sole proprietorship or partnership where the small business owner can be personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting for the business owner’s personal assets.

Related: How Does an LLC Protect You?

Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration and management flexibility.

Forming an LLC in Utah is fairly straightforward, but it’s nice to have some support in case you have questions or get stuck.  IncFile and Inc Authority provide LLC formation guidance for only the cost of the state fees!

Related: Should you use a Formation Service, Hire an Attorney or Do it Yourself?

To form a Limited Liability Company in Utah, file the Certificate of Organization with the Utah Department of Commerce.  The LLC filing fee is $70.  This form will not be accepted if it is handwritten.  It must be typed.

Approval for the LLC is typically around 7-10 business days.

If you have questions, contact the Utah Department of Commerce.
Phone: 801-983-0275
Email: support@utah.gov

 

HOW TO FILE THE CERTIFICATE OF ORGANIZATION AND FORM A UTAH LLC

 

Step 1: Name of Limited Liability Company

Enter the name you want for the LLC.  The name of the LLC also has to differ from other entity names registered with the Department of Commerce.  You will want to check on available LLC names in Utah before fiilng the Certificate of Organization.

The name of the LLC must also include a designator at the end of the business name.  A designator describes what type of business entity it is. Available designators include:

  • Limited Liability Company
  • Limited Company
  • Limited Liability Co.
  • Limited Co.
  • Ltd. Liability Company
  • Ltd. Company
  • Ltd. Liability Co.
  • Ltd. Co.
  • L.L.C.
  • LLC
  • L.C.
  • LC

A comma may be used after the business name and before the designator.  “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.

Enter the name along with the designator you would like to use and click on “Check Name Availability”  A new page will open indicating whether the name is available or not.  Even if the search comes back with the name is available, the Department of Commerce’s office will also review it to be sure it isn’t being used by someone else or that it is too similar to another name.

Before settling on a name, you may want to do a domain name search to try and match your business name and website address.

Step 2: Principal Office Address

In this section, enter the street address, city, state and zip code of the initial principal office.  This address must be in Utah and can be the physical address of the LLC or it can be the address where the business records are stored.  You may not use a PO Box for the designated office.

Step 3: Registered Agent

Before forming an LLC in Utah, a Registered Agent must be identified.  The Registered Agent can either be a resident of Utah, a Business Entity or a Registered Agent service.  If the agent is a business, it must be registered with the Department of Commerce and be in good standing.

The Registered Agent must have a physical address in the state (PO Boxes are not allowed) and act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc on behalf of the LLC.

Even though the business owner can be the registered agent, their name and address become public record and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home.

Step 4: Signature of Organizer

An LLC Organizer is someone involved with the formation of the Certificate of Organization.  The Organizer may or may not become a member, such as a mentor, attorney or accountant, but any of the initial members can be listed as an organizer.

Have an organizer sign in step 4 after the form is printed.

Step 5: Name and Address of Members and/or Managers

This is an optional section.  Some people won’t fill in this section since they don’t want the members and manager’s names on public record.  This can sometimes pose a problem when opening an LLC bank account as some banks won’t open an account without a listed member or manager.

The differences between a member-managed and manager managed LLC:

  • Member-Managed LLCs have an active involvement in the management and have authority to act on behalf of the LLC.
  • Manager-Managed LLCs are hired by the members to run the LLC, similar to a CEO of a corporation.  This is generally used when there are passive members in the LLC and the members do not actively manage or operate in the affairs of the business.

Most LLCs are member-managed.

Step 6: Duration

This is another optional section.  Here, you can indicate how long the LLC will remain in existence.  Most LLCs will choose a Perpetual duration, however some businesses (usually investment related) will have a specific closure date.

By skipping this section, your LLC will be Perpetual by default.

Step 7: Business Description

Another optional section where you can provide some basic information about what the business does.  Some filers will include an open-ended business purpose saying “This business will engage in any lawful business activity for which a Limited Liability Company may be organized in Utah”.

Related: How to Answer the Business Description

Step 8: Inclusion of Ownership Information

The next two questions are optional and ask demographic information about whether the LLC is female-owned and/or minority-owned.

Pay and File

Pay and file the Certificate of Organization.

Send a copy to:
Utah Division of Corporations & Commercial Code
PO Box 146705
Salt Lake City Utah 84114-6705

Tasks After Forming Your LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare an Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, member responsibilities, how profits and losses are distributed and more.

Most states do not require an LLC to have an operating agreement but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit
  • Member’s personal liability protection may be diminished
  • Members may not have a full understanding of their roles and responsibilities which could lead to costly disputes in the future

Related: Utah operating agreement template

Obtain an EIN

The EIN or Employer Identification Number is a unique 9-digit number for a business. Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.  

The EIN will be needed in order to open a bank account, register for business licenses and permits, file tax returns, pay payroll taxes and more. 

Related: How to Apply for an EIN

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original formation paperwork from the state showing the creation of the LLC.
  • Driver’s licenses of the members.
  • Depending on the age of the LLC, a Utah Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.

Related: How to Open a Business Bank Account for your LLC 

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, there will likely be a variety of business licenses and permits to register for before starting. Some common registrations include:

  • Business License – Some cities require businesses to obtain licensing before they can start. In some cases, even home-based businesses must have licensing in order to legally operate. 
  • Professional License – Certain services such as barbershops, accountants, salons and others must be licensed.
  • Sales Tax License – In order to sell products and certain services, registration with the Utah Sales Tax Commission.

Related: What Business Licenses are Needed in Utah?

File Annual Reports

LLCs are required to file an annual report with the Utah Department of Commerce.  The annual report updates ownership information and other details.

Related: How to File a Utah LLC Annual Report