Utah C Corporation Formation
How it Works
Lauren Roberts, Esq.
Utah C Corporation Formation
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Why use UpCounsel to form an C Corporation in Utah
Starting an C Corporation in Utah with a business startup attorney on UpCounsel is easy, informative, and cost-effective. In just three simple steps, our C Corporation attorneys will help you protect your business and personal assets, and help you organize your business for state and federal compliance for an C Corporation.
When forming an C Corporation in Utah with UpCounsel, the attorney you choose to help you will conduct a business name search for your Utah C Corporation and assist you in preparing your C Corporation Operating Agreement, along with providing other legal services based on your needs. Once your Articles of Incorporation have been prepared and successfully filed with the Utah Secretary of State, your Utah C Corporation has been formed and begins its existence as a corporate entity.
Choosing a Company Name for Your C Corporation
One of the first steps in the process of forming your C Corporation is to choose your business name.
The business name that you choose must contain the words "incorporated", "corporation", "limited", or "company", or an abbreviation of these words. The name may not indicate or imply that the corporation is organized for a purpose other than one permitted by state law or its articles of incorporation. It must be distinguishable (not the same as or deceptively similar to) the name of an S Corp or foreign C Corporation reserved or registered.
Your C Corporation name may contain the name of one or more members.
By using UpCounsel, you can choose several business names in order of preference. Your attorney of choice can then conduct a name check for your Utah S Corp before filing to see which names are available. Once you have chosen an available name, your chosen C Corporation attorney can help you properly register your name with the State of Utah.
Requirements for Forming a Utah C Corporation
Articles of Incorporation: When forming an C Corporation in Utah, the Articles of Incorporation must be filed with the Utah Secretary of State. Utah state law requires that certain information be included in your Articles of Incorporation when forming your Utah C Corporation.
This information must include:
- The C Corporation name and address.
- The purpose of the C Corporation
- The name and address of the registered agent for service of process on the C Corporation
- The number of shares, and their class, that the C Corporation is authorized to issue.
- The name and addresses of each of the incorporators.
Additionally, a Utah C Corporation formation generally requires inclusion and/or consideration of the following:
C Corporation Operating Agreement: Although the C Corporation Operating Agreement is not required with the Articles of Incorporation, it is a good idea for every C Corporation with more than one member to have one. The Articles of Incorporation may contain restrictions or prohibitions on the power of the members to adopt, amend, or repeal an operating agreement. If there is more than one member, any operating agreement shall initially be agreed to, in writing, by all of the members. If you do choose to adopt an operating agreement, it does not have to be filed with the Secretary of State, but should be kept on file by the registered agent.
Membership: A C Corporation must have one or more members.
Eligibility Requirements: A natural person or an entity.
Procedure for Membership: The member may acquire an interest in the C Corporation directly from the C Corporation at the time of formation and, after formation, at the time provided in and upon compliance with the Articles of Incorporation or the operating agreement or, if not provided, only upon the vote of a majority in interest of the C Corporation members, excluding the vote of the person acquiring the membership interest, and only when the person becomes a party to the C-Corp's operating agreement.
Business Licenses: Business licenses and/or permits are required for most C-Corp's offering specific professional services. Contact the Utah State Corporations Commission for specific licenses.
Resident Agent needed for a Utah C Corporation
UpCounsel attorneys can also provide your business with a registered agent in Utah. Every Utah C Corporation must have a registered agent in Utah, which is the person or office designated to receive official state correspondence and notice if the company is "served" with a lawsuit. A Utah resident, corporation, or a foreign corporation that has the authority to transact business in Utah may act as a registered agent, as long as they have a physical street address in Utah.
Utah Secretary of State
Once you create an C Corporation in Utah, the Utah Secretary of State will require that certain recurring responsibilities and duties be fulfilled. The most important of these are explained below.
For further information, contact the Utah Secretary of State.
Recurring Responsibilities and Duties for Utah C Corporations
Periodic Report: Each C Corporation shall provide a periodic report to the Utah Secretary of State regarding its financial condition to each of its members. Your registered agent will be mailed a reminder prior to when your periodic report is due. If your periodic report is not filed on time, your C Corporation could face fines. The periodic report must be filed online at the Secretary of State's website.
Records: Each Utah C Corporation must keep the following records open to inspection at its office:
- A current list of the full name and last known business or residence address of each member and of each holder of an economic interest in the C Corporation set forth in alphabetical order, together with the contribution and the share in profits and losses of each member and holder of an economic interest.
- If the C Corporation is manager-managed, you will need a current list including the full name and business or residence address of each manager.
- A copy of the Articles of Incorporation and all amendments thereto, together with any powers of attorney pursuant to which the Articles of Incorporation or any amendments thereto were executed.
- Copies of the C-Corp's federal, state, and local income tax or information returns and reports, if any, for the six most recent taxable years.
- A copy of the C-Corp's Operating Agreement, if in writing, and any amendments thereto, together with any powers of attorney pursuant to which any written operating agreement or any amendments thereto were executed.
- Copies of the C-Corp's financial statements, if any, for the six most recent fiscal years.
- The books and records of internal affairs as they relate to the C Corporation for at least the current and past four fiscal years.
- A signed "Incorporator's Statement" showing the names and addresses of the initial directors who will serve on the board until the first annual meeting of shareholders.
Filing Fees for a Utah C Corporation
Filing of the Articles of Incorporation must be made with the Utah Secretary of State in which the C Corporation was organized, along with the appropriate state filing fee. The fee for this is $70 and the Articles may be emailed or mailed along with the fee. Keep in mind that fees can be subject to change, so make sure to refer to the Utah Secretary of State for any updates.
Taxes for a Utah C Corporation
Utah C Corporation shareholders do not report any of the business income and expense on their individual tax return. The corporation files tax returns and pays its income taxes (at generally lower tax rates than would individuals) while the individual shareholders report and pay personal income taxes only on monies paid them by the corporation. It should be noted that shareholders are required to pay personal income taxes on income from dividends paid by a C Corporation even though income taxes have previously been paid by the corporation. This leads to what is commonly referred to as "double taxation".
Utah state law follows federal law for income tax purposes. Therefore if a corporation is classified as an association taxable as a C Corporation for federal income tax purposes, so will it be taxable as a corporation for state tax purposes.
Federal Income Tax: For federal income tax purposes, a C- Corp is recognized as a separate taxpaying entity. A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders.
Utah State Income Tax: Utah C Corporations are subject to Utah's 5% franchise tax on net income.
Federal Tax Identification Number: Your corporation will need to obtain a federal tax identification number, which is also known as an Employment Identification Number (EIN). You do not need to get a new EIN after the corporation choose to become a C Corporation An EIN is similar to an individual's social security number. You will need an EIN for your C Corporation as long as there is one member, even if the C Corporation does not have employees. For certain tax filing requirements the attorney you choose on UpCounsel can help prepare your Federal Tax ID Application, if you have not done so already.
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