Utah LLC: Everything You Need to Know
Utah LLC provides its members with limited liability in terms of the company’s debts and obligations. 3 min read
A Utah LLC provides its members with limited liability in terms of the company’s debts and obligations. An LLC also referred to as a limited liability company, operates essentially as a corporation, sole proprietorship, and partnership all in one. An LLC affords its members with limited liability as they cannot be held personally liable for the company’s debts. The State of Utah has over 95,000 active LLCs, ranking it sixth in the State on the small business survival index, with the eighth best tax and regulatory requirements.
Steps to Forming an LLC in the State of Utah
Step 1. Naming your LLC is the first step in establishing your company. You’ll need to conduct some research to ensure that the name is not previously taken by another business. Other guidelines, rules, and tips apply as follows:
- The name must include LLC, L.L.C., or Limited Liability Company at the end of the business name.
- Certain words are prohibited, including Bank, University, College, Attorney, Doctor, Treasury, etc. This is a rather simply concept to understand. Your LLC is not a financial or educational institution. You cannot include terms like “attorney” or “doctor” unless a licensed individual having such educational credentials are part-owners in the LLC.
- The name of your LLC must be written in English letters, Arabic numerals, or Roman numerals.
- The name cannot include punctuation marks or symbols, i.e. dashes, question marks, colons, etc.
Step 2. Choose a registered agent. This is a required step in the process. The registered agent will accept and send papers on your behalf, including annual filings as well as service of process in the event a legal battle ensues between you and another party. See above for additional requirements when choosing a registered agent.
Step 3. File the Certificate of Organization. There will be a $70 fee when filing the certificate of organization; however, it can be done quicker for an additional fee of $75. The following information will need to be included in this document:
- The LLC name
- Number of shares that will be issued, and if more than one class or series of shares it to be issued, this information must be included. Keep in mind that a charter fee will apply here. This fee will depend on the number of shares being issued.
- The registered agent name/address
- This document must be signed by one or more of the incorporators
Step 4. Draft the operating agreement. This document, while not required in the State of Utah, is highly advisable. The agreement outlines the ownership structure and daily operating procedures of your LLC. This document should be carefully drafted to include all important items regarding the operations of the LLC, accounting methods and retention of records, as well as other important decisions to be made when developing your LLC.
Step 5. Obtain an EIN. You must obtain an EIN, or Employer Identification Number, for your LLC, which is a Social Security number for your business. An EIN is required to open a business bank account, for federal and state tax purposes, and must be done in order to hire employees. You can obtain an EIN from the IRS after forming your company. There is no filing fee. Obtaining an EIN can be done online or by printing and mailing the form.
Utah LLC Tax
The owner of the LLC must register for Unemployment Insurance Tax and Employee Withholding Tax if hiring employees. You can register for unemployment tax through the Department of Workforce Services, and you can apply for tax withholding through the Utah Taxpayer Access Point. If the LLC is selling goods that will be taxed, the LLC must also register for Utah Sales Tax through the Utah State Tax Commission. All registrations can be done online for added convenience.
Licenses and Permits
As an LLC owner, you must comply with federal, state, and local laws. In addition to forming your LLC and obtaining specific registrations, you may also be required to obtain certain business licenses and permits depending on what type of business you run. For example, if you own a restaurant, you will need to comply with additional health regulations that are specific to running a food establishment.
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