How to start an LLC in Utah: A simple guide (2024)

Utah is a prime choice for launching a new business. It consistently ranks high in both business environment and economic growth, solidifying its status as a go-to destination for small and medium-sized businesses.

The state boasts a young population, an educated workforce and one of the lowest corporate tax rates in the country. So, if you’re an entrepreneur looking to establish a business in Utah, consider forming a Utah LLC (limited liability company).

Let’s take a closer look at how to form an LLC in Utah, from requirements and steps to federal and state tax considerations.

Requirements for LLC formation in Utah

While Utah offers a friendly environment for small businesses and sole proprietors, there are certain regulations and requirements to keep in mind. These are similar to the requirements for starting an LLC in most states.

Unique business name

To form an LLC in Utah, you must follow certain naming requirements and restrictions laid out by the Utah Division of Corporations and Commercial Code. For example, your business name must be distinguishable from the name of any other corporation, LLC or limited partnership authorized to do business by the Utah Division of Corporations. Minor differences like punctuation or using “limited liability company” instead of “LLC” aren’t enough to make the name distinguishable.

There are a few additional requirements for naming your Utah LLC, including:

• The name of your business must include an abbreviation or phrase specifying that it’s an LLC, such as “limited company,” “limited liability company,” “L.C.” or “L.L.C.”
• The name of your LLC can’t contain the words “association,” “corporation” or “limited partnership” or the abbreviations “assoc.,” “corp.,” “inc.” or “L.P.”
• The name can’t include words such as “Olympic,” “university” or “Bank” without consent from the respective departments.

Registered agent

In Utah, a registered agent is an individual or business responsible for receiving essential legal documentation when your LLC is involved in a legal action. The agent also receives correspondence from the Utah Division of Corporations on behalf of your LLC. Your LLC can’t serve as its own registered agent.

The registered agent must meet the following requirements:

• Be a Utah resident
• Be at least 18 years old
• Have a street address in Utah

Certificate of organization

To start an LLC in Utah, you need to file the certificate of organization with the Utah Division of Corporations. The certificate of organization is a formal document that establishes your LLC in Utah.

It must contain the following details:

• Name of your company
• Street address of the principal office
• Name of the registered agent
• Street address of the registered agent
• Signature of the company’s organizer
• Name and address of members and/or managers (optional)
• Duration of the business entity (optional)
• Purpose of the business entity (optional)

Steps to starting an LLC in Utah

The LLC formation process is similar across the US, but there are some differences from state to state. To start an LLC in Utah, you’re required to register with the Utah Division of Corporations.

Here are the essential steps you need to take to get started:

Step 1: Name your Utah LLC

Selecting the perfect name for your business is the critical first step. Choose a name that’s distinct, resonates with your target audience and complies with legal requirements.

To determine whether the name you want is available, conduct a business name availability search. Alternatively, to check the availability of your desired name, you can call the Utah Division of Corporations at 801-530-4849 or send an email to corpucc@utah.gov.

If you find an available business name but aren’t yet ready to submit your certificate of organization, you can reserve your LLC’s name for 120 days by filing a name reservation application with the Utah Division of Corporations and paying $22. The application must be typewritten or computer-generated and can be filed by mailing it to the below address:

P.O. Box 146705

Salt Lake City, UT 84114-6705

It can also be faxed to 801-530-6438.

Please note that the reservation of a business name doesn’t give you permission to use the name until your Utah LLC is fully registered.

Step 2: Appoint a registered agent

After choosing your name, you’ll need to designate a registered agent for your Utah LLC. You can serve as your LLC’s registered agent or choose a family member, friend or employee, as long as the requirements we covered earlier are met. Another business that’s registered with the Utah Division of Corporations can also serve as the registered agent for your Utah LLC.

To avoid the risk of noncompliance and safeguard your privacy, you may want to consider hiring a registered agent service. Hiring a service typically costs between $50 and $300 per year. These services receive legal documents and official mail for your Utah LLC, offering convenience, compliance and peace of mind.

Step 3: File Utah certificate of organization

The next step in forming your LLC in Utah is to file the certificate of organization with the Utah Division of Corporations. This is where you’ll provide all of the essential information about your LLC, including your business name and details about your registered agent.

For regular service, the processing fee is $54 payable to the state of Utah; for expedited service, you’re charged an additional $75 (total $129) for a turnaround of one to two business days.

There are a few different ways you can file your application.

Online:

You can file your certificate of organization online on the state of Utah’s OneStop Business Registration website. This process is quick and easy and registers your business entity within 24 hours.

The OneStop system allows you to register your new business with several different departments:

• Utah State Tax Commission
• Utah Department of Commerce
• Utah Department of Workforce Services

Alternatively, you can file your certificate of organization online using the Shopping Cart filing system on the Utah Division of Corporations’ website. This is a relatively simpler system that allows you to complete the certificate of organization form and then upload it.

By mail:

To submit your certificate of organization by mail, download and complete the application and mail it to the below address:

P.O. Box 146705

Salt Lake City, UT 84114-6705

However, applications sent by express or priority mail should be sent here:

160 E. 300 S. (or 160 E. Broadway)

Salt Lake City, UT 84111

A check or money order payable to the “State of Utah” should be included with your application.

By fax:

You can also file your certificate of organization by faxing the application to 801-530-6438. To pay, use the Payment Cover Letter.

In person:

You also have the option of submitting your Utah LLC application in person at the Utah Division of Corporations. The office address is as follows:

160 E. 300 S. (or 160 E. Broadway)

Salt Lake City, UT 84111

Step 4: Draft an operating agreement (optional)

While it isn’t required by law when forming an LLC in Utah, having a detailed operating agreement is a smart move. This agreement outlines financial and day-to-day decisions for your business, covering rules, regulations and provisions. It helps protect your LLC’s members from personal liability and ensures that important decisions are clearly documented in writing.

Your Utah LLC operating agreement could include the following:

• Percentage of members’ ownership
• The rights and duties of members and managers
• Distribution of profits and losses
• Rules for LLC buyouts and dissolution
• Conditions for amending the operating agreement

Step 5: Obtain an employer identification number (if applicable)

An employer identification number (EIN) is a unique nine-digit number issued by the IRS to businesses for federal tax purposes. Think of it like a Social Security number, but for business matters. You need an EIN for paying taxes and hiring employees and can get it for free from the IRS website.

If your Utah LLC has multiple members or employees, you’re legally required to get an EIN. For single-member LLCs, having an EIN isn’t a legal requirement but can be helpful. For instance, if you want to open a business bank account or get a business credit card, banks often ask for an EIN. Also, having an EIN is good for privacy because it keeps your Social Security number separate from your business affairs.

Step 6: Get a business license

All businesses, including LLCs, should be licensed in their local municipality. This ensures the business is safe for the public and protected under local laws. See the Utah Division of Corporations’ education hub for local business licensing resources and contact information.

Step 7: File your beneficial ownership information (BOI) report

Starting Jan. 1, 2024, all US LLCs must file the beneficial ownership information (BOI) report with the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

A beneficial owner is anyone who exercises substantial control over your company or owns/controls at least 25% of your company’s ownership interests. You also need to identify your company applicants, defined by FinCEN as the “individual who directly files the document that creates or registers the company and if more than one person is involved in the filing, the individual who is primarily responsible for directing or controlling the filing.”

You need the following information about each beneficial owner and company applicant for your BOI report:

• Full legal name
• Date of birth
• Residential address
• US driver’s license, passport or other form of identification and the name of the issuing state or jurisdiction, along with the image of the document associated with the number

To fill out your BOI report, you’ll need the following information about your Utah LLC:

• Legal company name
• Trade or doing business as (dba) names
• Your taxpayer identification number (includes your EIN) or tax number issued by a foreign jurisdiction (as well as the name of that jurisdiction)
• Your registration jurisdiction
• Current street address of your principal place of business in the US

To help LLCs meet all the requirements, FinCEN created a comprehensive small entity compliance guide.

If you start your LLC in Utah before Jan. 1, 2025, but after Jan. 1, 2024, you’ll have 90 days to file the BOI report from the confirmed date of formation. After Jan. 1, 2025, you’ll have 30 days to file the report.

There’s no fee to file your BOI report, but there are serious consequences for noncompliance. Failure to file could result in up to $500 per day in civil fines and potential criminal penalties of up to $10,000 and two years in prison.

To learn more or to file your BOI report, visit FinCEN’s beneficial ownership information page.

Understanding federal and state taxes for Utah LLCs

In the Tax Foundation’s 2024 State Business Tax Climate Index, Utah makes it into the top 10 thanks to its well-structured tax system. This further bolsters Utah as one of the best choices for starting an LLC in the country.

Utah LLCs face taxes at both the federal and state levels, just like most businesses. Understanding your tax responsibilities when starting an LLC in Utah can streamline your finances and make tax season manageable.

Utah sales and use tax

If your LLC sells or provides taxable products or services, you’ll have to pay the general sales and use tax of 4.85% that’s collected from customers and then paid to the state. In addition, local authorities and counties are allowed to charge sales and use tax. So, depending on the jurisdiction, the total sales and use tax rate can vary from 6.35% to 9.05%. You can refer to the Utah State Tax Commision’s sales and use tax rate charts for more details.

Before you start providing taxable goods and services in Utah, you need to apply for a sales tax number, which can be obtained both offline and online.

Utah corporate income tax

Although not common, if your LLC elects a tax status that’s subject to corporate tax (such as a C corp), you’ll be responsible for paying the flat 4.65% corporate income tax. This is among the lowest in the country. Your LLC (if subject to corporate tax) must pay a minimum tax of $100, unless it elects an S corp tax status.

Employment taxes in Utah

Anyone who takes profits from your LLC, such as members, must pay federal self-employment tax. This tax, managed by the Federal Insurance Contributions Act (FICA), includes Social Security, Medicare and other benefits. The current rate for self-employment tax is 15.3%.

LLCs can potentially reduce the amount of self-employment tax their members face by opting for S corp status, but we recommend you consult an attorney and/or accountant when you are determining your LLC’s tax classification.

If your Utah LLC has employees, you must withhold 4.65% income tax. For more details, refer to the Utah Withholding Tax Guide. If you have employees, another tax you need to pay is the unemployment insurance (UI) tax, which varies from 0.3% to 7.3%. In Utah, the taxable wage base is $47,000 and employers are only responsible for UI taxes on wages paid up to that base.

Additional taxes in Utah

There are additional taxes — such as the Cigarette and Tobacco Taxes and the Motor Vehicle Rental Taxes — that your Utah LLC may be subject to depending on its industry and operations.

The Utah State Tax Commission provides a full list of taxes and fees with detailed information.