Forming an LLC in Utah: Everything You Need to Know
Forming an LLC in Utah requires you to keep a few things in mind and it does not have as many formal requirements as corporations.3 min read
Forming an LLC in Utah requires you to keep a few things in mind. An LLC, or “limited liability company,” does not have as many formal requirements as corporations. In addition, one of the biggest benefits of forming an LLC is that an LLC’s members are protected from being held personally liable for any of the business’s financial obligations or legal liabilities. Because of the limited liability, an LLC’s creditors will not be able to reach the member’s personal assets.
LLCs in Utah are governed by Title 48, Chapter 02c of the Utah Code. As with a majority of other states in the U.S., Utah has specific requirements for forming an LLC.
How to Form an LLC in Utah
A limited liability company is a very common type of business structure. Part of the reason why it is so attractive to businesses is because it is relatively easy to form and inexpensive to maintain. In just a handful of steps, your business can start operating as an LLC in the state of Utah.
1. Choose a Name for Your LLC
Every business needs an official name. One of the first steps of forming an LLC is to choose a unique name that no other business in the state has. To check and see if your desired name is available, you can check Utah’s Business Search website, which can be found under the Division of Corporations and Corporate Code.
Once you find a name that is not in use, you can reserve it for up to three months by applying for a Reservation of Business Name with the Utah Corporations Division. You might also want to check if the domain name is available. Even if you do not plan on creating a website right away, it will be good to have for the future. It will also prevent any competitors from buying it.
Utah requires that an LLC attach an identifying term to the end of its name. An identifying term can be “LLC,” “Limited Co.,” “Ltd.,” or any version thereof that identifies it as an LLC. It cannot have the words “Inc.,” “Bank,” “Attorney,” or anything other terms that will mislead the public into thinking the business is anything other than an LLC.
2. Register an Agent
Under state law, every LLC must designate a registered agent. Registered agents accept and send legal documents on behalf of the LLC. A registered agent can be an individual or other business entity, but it cannot be the LLC itself. Any registered agent must be a resident of Utah and have a physical street address.
3. File the Certificate of Organization
For an LLC to legally exist, the owners must file a Certificate of Organization with the Utah Division of Corporations. The Certificate of Organization must include some basic information about the LLC, such as:
- The LLC’s name
- The name and address of the registered agent
- The name(s) and address(es) of the LLC’s members
- Type of management, whether it be member-managed or manager-managed
- Duration of the LLC
Utah charges a one-time nonrefundable filing fee of $70 to submit the Certificate of Organization and register the LLC.
4. Create an Operating Agreement
While LLCs are not required to create an Operating Agreement under Utah state law, it is highly encouraged to do so, especially if the LLC has more than one member. An Operating Agreement is a governing document that lays out the rules and procedures for daily operations.
It should describe the duties of each LLC member, their financial obligations, how much of the LLC they own, and other pertinent items such as how to add or remove a member, what decisions the members need a vote for, and how often the members will have official meetings.
5. Obtain an Employer Identification Number
An Employer Identification Number, or “EIN,” can be thought of as the business’s social security number. It is required when filing state and federal taxes, and may be needed if the LLC is going to open a bank account.
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