Utah Business Corporation Act: Everything You Need to Know
What is the Utah Business Corporation Act? This legislation lays out how a corporation must engage in business and properly incorporate in the state of Utah.3 min read
What is the Utah Business Corporation Act? Now referred to as the Utah Revised Business Corporation Act, this legislation lays out how a corporation must engage in business and properly incorporate in the state of Utah.
Steps to Incorporate in Utah
In the state of Utah, a corporation is considered a separate legal entity established by shareholders. In order to incorporate a Utah corporation, shareholders must elect an incorporator to officially separate them from the entity. There are several steps that need to be completed in order to incorporate in Utah:
- Select the structure of the corporation.
- Check the availability of names. A corporation's name may not coincide with another corporation's registered name. Conduct a name search to check if the desired name is available. Any Utah-based corporation must have one of the following abbreviations or words in the company's name:
- Company or Co.
- Incorporated or Inc.
- Corporation or Corp.
- A registered agent needs to be appointed. Identify the registered agent of the Utah corporation. This company or individual serves as the primary contact if a notice of lawsuit is received and also handles any other legal issues.
- The articles of incorporation must be filed. The articles of incorporation must be filed by the incorporator with the Utah Division of Corporations and Commercial Code.
- Corporate records and bylaws must be established. Any provisions for managing business affairs for the corporation are detailed in the bylaws of a corporation. However, these must be consistent with the articles of incorporation.
- Initial directors must be appointed. Until the annual shareholder meeting can be held, the initial directors will serve on the board. The annual shareholder meeting is the time when the corporation's official directors are elected to the board.
- Hold an organizational meeting and keep minutes to stay in compliance with Utah Code Ann. §16-10a-205.
- Issue certificates of stock.
- Obtain a Federal Employer Identification Number (EIN). A corporation must get an EIN even if it does not plan to hire employees. Applications can be completed by phone, mail, fax, or online with Internal Revenue Service (IRS). There is no fee to file. The IRS Form SS-4 can be submitted on the IRS website.
- Obtain all the necessary Utah state tax identification numbers and accounts.
- Consider opting for S-corporation taxation.
- Obtain business permits and licenses to operate legally.
- Complete all ongoing state and federal tax return filings to properly maintain your corporation.
Utah Corporation Filing Guidelines
Corporations must file an annual report with the Utah Division of Corporations and Commercial Code. This agency provides a specific form to file the report, and it must include the following information:
- Information of the registered agent
- Names of principal officers
- Street address of the primary office
- The incorporation jurisdiction
- The name of the corporation and assumed name, if applicable
The cost to file the annual report is $15. There is a $10 fee if the submission is late.
Utah Corporations Law
All corporations in Utah are governed by the Utah Code - Title 16, Chapter 10a, Utah Revised Business Corporation Act. There are specific guidelines and components outlined in the legislation, including:
- Purpose clause: The purpose clause is an essential part of creating a new corporation. It helps identify the company's core goals, purpose, and mission.
- Authorized shares: There is no maximum or minimum number of authorized shares because Utah state incorporation fees do not correlate with a company's share structure.
- Preemptive rights: In the absence of a specific grant, preemptive rights are denied.
- Cumulative voting: Unless specifically granted, cumulative voting is automatically denied.
- Incorporator: In a Utah-based corporation, there is a minimum of one incorporator who be must be at least 18 years old. This individual does not need to be a Utah resident.
- Directors: There are certain duties that every director owes to a Utah-based corporation. These duties are specified in the Utah Revised Business Corporation Act.
Utah Corporate Guidelines on Limitations on Classes or Series of Stock
There are no limitations on the series or classes of capital stock that may be issued by a corporation, according to the Utah Revised Business Corporation Act. Any restrictions or limitations on capital stock must be clarified in the corporation's resolution or the articles of incorporation by which the series or class of stock is approved.
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