How to start an LLC in Utah

Starting a company might look intimidating to many of you. But if you are well-informed of each process step by step, it doesn’t look that hard. In this article, we will take you to every step in detail. 

Limited Liability Company is one the feasible business model. For a small or medium business, it is a perfect choice. The structure comes with many benefits. And the cherry on the top is that you decided to form your business in Utah. There are several benefits of starting your company here. First, let us take a look at that: 

  • The LLC owners receive consultation from the Small business development center in Utah.
  • Doing business in Utah does not cost you much. The rate is two percent less than the average in the United states.
  • The state offers an ever-growing economic atmosphere.
  • There is a high labor supply.

LLC offers various advantages such as flexible tax structure, no limit on the number of members, protection, etc.

So, without any more time, let us look at the steps required to create an LLC.

Step 1: Pick a name for the LLC

You might be wondering how hard that can be to pick a name? It might look easy at first glance, but it surely can take up your time. You just cannot pick a name like that. There has to be a meaning to it. There’s one saying that a good name is rather to be chosen than riches. Well, in business, you will need a good name and, yes, fortunes too. So, you have to put in your efforts. While picking up a name, make it creative, memorable, engaging, and something that reflects your company’s aim. The name of your business would be the first thing that attracts new customers while still capturing the interest of current ones. one crucial factor to keep in play is that the company’s name cannot be the same as that of another business. Try coming up with something different if the name you prefer is not original or used by some other organization. Adding capital letters or making some changes to the punctuation isn’t enough to make some substantial changes; you still need to alter the keywords to make them distinct.

The language that is offensive or disrespectful is prohibited. The name should follow the rules of the state. The term Limited Liability Company or its abbreviations must be used. In any case, your name does not imply that you are connected to the government. You cannot use the words partnership, corporation, incorporated. After you’ve decided which name you are going to use for your business, you can reserve it also. You can hold it for 120 days if it’s going to take time to establish your business. You don’t want anyone else to register the same name as you. In that case, all your hard work will be wasted. You have the option of submitting the request online or by sending a hard copy. For the online application, you have to go to the OneStop business registration portal. For the hard copy submission, you can mail the application for business name reservation to the following address: 

Utah Division of Corporations & Commercial Code

PO Box 146705

Salt Lake City Utah 84114-6705

If you want to send an overnight postal mail, you can send the form to:

Utah Division of Corporations & Commercial Code

160 East 300 South 2nd Floor (or 160 E Broadway)

Salt Lake City Utah 84111

If you are in the area, you can go to the office and personally submit your application to Heber M. Wells Building at 160 E 300 S, 1st Floor, Salt Lake City, Utah 84111.

Or, if you want, fax the paper form to the office at (801) 530-6438. For that, you have to download the form first and take a printout. 

Step 2: Appoint a Registered Agent

A registered agent of an LLC is a person or entity whose work is to look after the correspondence on behalf of the company. The state makes it mandatory for LLC to appoint the registered agent. In this way, it confirms that every notice, reminder, lawsuit reaches the owners. Also, all the business-related correspondence from the state goes to the registered agent. So, registered agents act as a point of communication between the state and the LLC. The appointment of an agent is only authorized after the name is entered in the Certificate of Organization.

What are the requirements to be a registered agent?

There are some simple requirements to be a registered agent. The registered agent is obligated to have a street address in the state. He/She should also be 18 years old or above. Also, if it is a business, it should have the authority to conduct business and have a street address. The registered agent is required in the office during regular working hours.

You can also be your company’s registered agent. But you have to remember that the details of the agent are mentioned in the public records. You could also get served in front of your customers which will not leave a good impression. After weighing all the points, you can decide whether you want to be the agent or not. Apart from this, there are services also. You can get the registered agents from these services. They will help you to establish your company and also provide you with an agent. 

Step 3: Submit the Certificate of Organization

One document without which you cannot start your business is the Certificate of Organization. You have completed all the essential parts, such as the naming process and appointment of the registered agent. Now, it is time to make your LLC an authorized entity. This document gives you the right to kick start your company. Some details present in the Certificate of the organization are:

  • the name of your LLC
  • Your office address
  • the name and address of the registered agent.
  • The name of the members
  • the formation date of your LLC
  • the purpose of your business.

There are different ways of submitting the Certificate of Organization. You can submit online or submit the hard copy. For any method, the fee is $70.

Online submission

The fastest and quickest method is online. If you want your submission process to be done quickly, then go for the online mode. For that, you have to visit the OneStop business registration online portal. Please fill the form and submit it. In two days, your application will get processed.

Mail submission

You can also submit via postal mail. You have to download the form and take a printout. After carefully filling the form, send it to the following address:

Utah Division of Corporations & Commercial Code

PO Box 146705

Salt Lake City Utah 84114-6705

Submission via Overnight Postal Mail

There is also an option of overnight mail, which you can send it to:

Utah Division of Corporations and Commercial Code

160 East 300 South 2nd Floor (or 160 E Broadway)

Salt Lake City Utah 84111

Hand-delivery

If you are in the area, you can go to the office and submit the form yourself. You have to reach Heber M. Wells Building, 160 E 300 S, 1st Floor, Salt Lake City, Utah 84111

Submission via Fax 

After downloading and taking a printout, fill the form and fax it to the office at (801) 530-6438. you also have to include a fax cover sheet. 

For the paper application, it can take around 7 to 10 working days. If you take long, you can also speed up the processing fee by paying an additional $75. 

Step 4: Draft an Operating Agreement

One of the essential elements of your business is an operating agreement. The operating agreement will ensure that the business operates proficiently after you’ve established it. For a successful company, a smooth functional business is a must. As the name implies, a contract is a document that outlines all of the company’s rules, regulations, and guidelines. It also contains details such as what to do in certain situations. All members should approve it after they have agreed to it. The State of Utah knows its importance; that is why it is compulsory to have an operating agreement. It assists you in avoiding conflicts and if disagreements do arise, in resolving them. Let’s say you have a three-member LLC. You have an operating agreement that specifies what events will take place if the company is dissolved. The operating agreement can be used as proof that your business is dissolved, and one of the founders requests a larger share. You can add whatever you want to your company’s agreement if you’re going to be versatile. The following are some of the items that should be present:

  • the LLC’s contact information. such as the name and the business address
  • The registered agent’s information
  • the name and signature of all the members
  • circumstances that can lead to the dissolution
  • the voting rights
  • the responsibility of each member
  • the financial contribution of the member
  • guidelines regarding addition or removal of a member

You can now compose the company’s operating agreement yourself or hire a specialist like an accountant or lawyer to help you. If you plan to manage it yourself, you can choose from a variety of online templates. If you aspire to hire a lawyer, that is also an excellent choice. The lawyer will be familiar with all of the state’s regulations and will assist you in drafting a comprehensive operating agreement. He’ll double-check that you haven’t forgotten anything, not even the tiniest detail. So it’s entirely up to you which choice you choose.

Step 5: Get an EIN

You must apply for an EIN (Employer Identification Number) when forming an LLC. EIN is commonly used when filing taxes. This number comes from the Internal Revenue Service, and it allows them to get a record of your tax payments. The use of this number is the same as the Social Security number. Suppose you didn’t apply for an EIN; you have to use Social security number for all the purposes, including business matters. It can cause concern for security/privacy breaches. As a result, the Employer Identification Number should be used for professional purposes. The taxation system of an LLC is flexible. Instead of paying it straight to the federal government, the owners add their income and expenditures of their business on their tax returns. Specific requirements, such as recruiting employees, forming a company, or selling products, open a bank account, the LLC will require EIN for these. An Employer Identification Number can be obtained in three main ways: online, by fax, or by postal mail.

Online submission

Online submission is the most effective way. For anyone who wants the process to be quick should apply online. You have to go to the website of the IRS. You can visit from Monday to Friday between the hours of 7 am and 10 pm. After submitting, instantly, you will get your number.

By fax

The second most efficient method is applying via fax. You must download the Form SS-4 and take a printout. Completed the form and faxed it back to the office at (855) 641-6935. Your application might take a few days to be approved.

Via mail

The third method is postal mail. Obtain Form SS-4, fill it, and mail it to the IRS as part of this procedure. In comparison to the other two methods, this one takes a long time. Please send it to the following address:

Internal Revenue Service Operation

Attn: EIN Operation

​Cincinnati, OH 45999

Step 6: Business taxes and licenses

Taxes are unavoidable; don’t even think about stopping paying them. Be consistent in paying your taxes for the smooth operation of your LLC. It will keep a good relationship with the government. If you avoid them, it will cause penalties and affect the good standing with the Utah government. 

Federal Income taxes

We have mentioned above that LLCs have a flexible tax structure; they are not required to pay federal income taxes to the government. The income and expenditure of the business must be reported on the owner’s income tax returns. You can opt to tax the LLC as a corporation. LLCs and corporations have different tax rules. You’d have to file a separate corporate income tax return if you chose to pay taxes like a corporation. 

State and local governments taxes

The taxation rule is the same for state taxes; the owners record their income and losses on their tax returns. Some states can levy a privilege or franchise tax in addition to the sales tax. It’s always a good idea to search the Secretary of state website for the most up-to-date information. In addition, based on the region, some local councils and counties have their fees. So make contact with the local government as well.

Other taxes

And there are extra taxes that are based on the type of company you have. There are also taxes to consider if you have workers. The withholding tax must be charged. Similarly, if you sell goods, you must file a sales tax return. To pay these taxes, register with the state’s commission. You can register online, or you can submit the Form TC-69. Additionally, for an LLC having employees, you also have to file the unemployment insurance tax. for that, register with the Department of Workforce Services.

As a result, different genres have different tax provisions. You can look up the various forms of taxes on the government’s website.

Obtain a business license

If you want to operate your business, you have to get the required permissions. You will need to receive some permits and licenses. They are necessary to function; without the licenses, it is illegal to operate. A food service license and a health permit, for example, are required for a restaurant. If you want to open a beauty parlor, you have to get a cosmetology license. Similarly, additional permissions are available for various types. As a result, it is preferable to contact the secretary of state to obtain a complete list of the multiple types of permits.

Licensing is a requirement in some towns, municipalities, and counties. Solicit knowledge from the local government before starting a company.

Step 7: Business Renewal

At this point, your LLC is on the floor, it’s functional, and you are doing business. While you are busy growing your business, you have to remember a yearly routine that is Business renewal. In many of the states, it is also known as the Annual report. Each year on the formation date, you have to submit a Business renewal with the government. You can submit online, or you can send in the hard copy. There is a fee of $20. Also, do not forget to file this report on time as delay can cause a fine of $25 and affect your good relationship with the government. 

Congratulations. You have made it to the finish. Now you are aware of the steps required to form an LLC. But we are ending it here as it is equally important to know the steps after your LLC is running. 

After

Open a bank account: the fundamental thing you have to do after forming your business is to open an account for your LLC. You will need EIN for this purpose. We have already applied for the employer identification number in step 5. So, that would be easy. You have to make a way to keep your personal and business assets separated. We know that LLC gives protection to the members limited liability. But you also have to keep them separated so that it will be easy to prove what is yours and what is of the company. With the help of an account, you can get cheques in the name of your company. Also, while you open an account, apply for the business credit card too. It will be easy for you to manage all the expenses of your business. 

Trademark: We know that if you have LLC, then no other company can use the same name as yours in the state. It is the naming requirement in the state; we have looked at it in step 1. But what if you want to expand. Eventually, you want your business to grow. So, if you’re going to open your franchise in other states or even internationally, it is better to trademark your name and logo. 

Good standing with the state: You have to maintain this position with the state. You can even get a certificate of good standing. It will prove that you have a legitimate and docile business in front of vendors, investors, and clients. So, you have to be compliant, pay your taxes on time, file the business renewal, etc. Doing things on time will help you in creating a good image of your business. 

Get insurance: Gains and losses are part of a business. That is why insurance is essential; it will help you get back on your feet if you face a loss. There are several insurances available to cover your losses in times of calamities, accidents, and many more. 

Marketing: Last but surely not least is marketing. For a business to be successful, you need customers. How can you get customers? By spreading the words about your business, the interested customers will check what you do, and if they like it, they will stay. Marketing and branding play a crucial role in the success of any business. You can promote your business by sending a press release, advertisements and marking your presence on social media. Nowadays, there are so many social media platforms to promote your company.

Finally, this is the end of the article. You have been very patient till now. This will indeed pay off. Soon you will be running your business. We hope we have helped you in some way to achieve your dreams. Now it’s time to go out, get great deals, and grow the business—all the best in all your ventures. 

We will be happy to hear your thoughts

Leave a reply

Strategy Plus
Logo
Enable registration in settings - general
Compare items
  • Total (0)
Compare
0