Utah offers many benefits to small business owners looking to establish a business entity such as a Limited Liability Company (LLC).
The state's low tax rates make it an ideal location for new business owners. On top of that, Utah's lack of minimal annual franchise taxes and low state filing fees make it an attractive place for starting your LLC.
These factors make it easy for new businesses to establish themselves, even with limited capital.
Here’s a full guide with step-by-step instructions on how to form an LLC in Utah.
Steps Needed to Get an LLC in Utah:
- Step 1: Choose a business name for your LLC
- Step 2: Appoint a registered agent
- Step 3: File the Utah LLC Certificate of Organization
- Step 4: Create an LLC Operating Agreement
- Step 5: Obtain an EIN (Employer Identification Number) from the IRS
- Costs to set up an LLC in Utah
- Final steps
Step 1: Choose a business name for your LLC
The new company formation process begins with legal name selection.
The name of your Utah LLC must be distinguishable from other businesses registered in the state. The Division of Corporations & Commercial Code defines “distinguishable” as a name having:
- One or more different keywords from other registered names
- Using the same or similar words in a different order
- Creative spellings of some words
For example, “Chick Filet” is distinguishable from “Chick-fil-A” because of the variation in how the names are spelled.
The name must include “Limited Liability Company” or “Limited Company” or an abbreviation like LLC or L.L.C. Certain words like bank or insurance require additional permits to use while words like “Treasury” or “Government” are prohibited entirely from being a part of an LLC’s name.
A name availability search tool will tell you if the name you want to use is available.
You may also contact the Utah Secretary of State’s office by phone to receive confirmation.
Note: Even if a business name appears to be available, the official decision on granting the name usage to your company will come from the state.
Name reservation (optional)
If you're not ready to start your business but like a particular name, you can reserve it for up to 120 days.
To do so, complete the Application for Reservation of Business Name form and pay the $22 fee if filing online. If reserving a name by mail, send the form along with a check to:
Utah State Tax Commission
PO Box 141700
Salt Lake City, UT 84114-1700
Note: If you end up using the name before the 120 days expire, you must cancel the name reservation.
Doing business as (optional)
Businesses that want to operate under a brand name different from their legal one must file a DBA with Utah’s Division of Corporations and Commerce Code.
A DBA or “Doing Business As” is ideal for companies with legal names that aren’t marketing-friendly. Or LLCs planning to run multiple brands under the same corporate umbrella.
Let’s say you’ve registered your LLC under a generic name such as “Debbie and Co LLC.” But your customers know you as “Debbie’s Dresses.” Filing for a DBA legally links these two names.
The LLC members or an organizer would need to file the DBA paperwork and pay a state fee of $22 for a three-year registration. Filings can be done by mail or online.
Step 2: Appoint a registered agent
A registered agent is a business or person (at least 18 years old) assigned to receive business correspondence and service of process of legal documents on behalf of your business.
The state also sends documents like annual reports to your designated registered agent. Thus, your LLC must have a registered agent with a street address in Utah (not a P.O. box).
Respectively, foreign LLCs without a local representative office and domestic LLCs operating from home may find the above requirement challenging to meet.
In case you don't want to be your own registered agent, you can hire one for about $50-$200/year in Utah. If you form an LLC with Northwest, they'll give you a free registered agent for the first year. After that, it's $125 per year.
Step 3: File the Utah LLC Certificate of Organization
Once you've chosen a name and designated a registered agent, the next step is to file a Certificate of Organization (Articles of Organization) with the state.
It can be done online or by mail, and the $54 processing fee is paid to the state of Utah by both domestic and foreign LLCs. Filings can be expedited for an additional $75.
You can register a Domestic Limited Liability Company (LLC) online, in person, by mail, or by fax. The online process is quick and straightforward, with the business entity registered within 24 hours.
If you prefer to register by form, you can use the Application for Registration, and for additional help, refer to the instructions provided for the application
The LLC certificate of organization includes:
- The LLC’s name and mailing address
- Registered agent’s contact information
- Additional statements for specialized LLCs (like low-profit or professional services companies)
A limited liability company is formed when the limited liability company's certificate of organization is marked as “effective” by the state.
Upon approval, business owners should request a certificate of existence and good standing from the state of Utah. This will cost you $12 and will be of assistance when applying for a business credit card, loan, insurance, and bank account.
Step 4: Create an LLC operating agreement
An operating agreement is a legal contract between the owners (LLC members) regarding the members’ rights and responsibilities. It’s similar to corporation bylaws but not legally required to be filed with the state. Single-member LLCs can skip this step.
However multi-member LLCs should prepare this document as having it in place prevents managerial issues and conflicts around profit distribution.
Utah doesn’t have a required format for an operating agreement. Thus, you can use any template you find online or have an attorney draft a custom document for you.
Step 5: Get an EIN (Employer Identification Number) from the IRS
A Federal Tax ID number, also known as an EIN or Employer Identification Number, is required for many businesses for tax purposes.
Specifically, if you:
- Plan to hire employees
- Operate as a partnership
- Withhold taxes on income
- Bound to pay certain federal taxes
You can get one online through the IRS website after answering some questions about your business (owners, industry, business address).
Total costs to set up an LLC in Utah
Forming an LLC in Utah is fairly cost-effective.
To reserve an LLC name, you will need to pay $22. Registering a “doing business as” (DBA) trade name also costs $22. The fee to file the Certificate of Organization is $54. Each year, you will be required to pay an $18 annual report fee to keep your LLC active in Utah.
If a business owner wants to reserve a name, file for a trade name, submit their annual registration, and hire a third-party registered agent, the total cost to start an LLC is between $150 and $200.
Final steps
Unlike a sole proprietorship, an LLC needs a separate business bank account to prevent the commingling of personal and business transactions. Commingling personal and business transactions implies that your LLC is not a separate business structure from you.
Most banks will ask for your EIN, Certificate of Organization, and an opening deposit averaging $100. Most business accounts also pay interest, offer merchant services and provide debit/credit cards.
If you plan on hiring employees or work in a regulated industry such as real estate, cosmetology, or construction, you might need to get some additional permits and licenses. Businesses that sell taxable goods from the state or have an economic nexus in Utah must register for a sales tax license. A business creates economic nexus (a local presence) with Utah when they meet one of several criteria:
- Have a warehouse or fulfillment center
- Have employees working locally
- Sell products at local trade shows
- Sell physical products (online or physical retail store) to Utah residents (conditions apply)
The statewide sales tax rate in Utah is 4.65%. However, sales tax rates also vary depending on the county and locality where you do business and the type of business you have. Registering for a sales tax license is a simple and free process. You can request a Utah sales tax number in two ways:
- Via Taxpayer Access Point (TAP)
- At OneStop Business Registration (OSBR) portal during company formation
Many small business owners don’t realize they need to collect or pay sales tax until it’s too late – when they’ve already gotten a bill from the Utah State Tax Commission.
Thus, it’s important to consult with a CPA to understand all of the scenarios which could create an economic nexus (and more taxes to pay) for your business.
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Last updated:
Dec 2024
