How to Start Your Own LLC in Utah

In addition, LLCs are pass-through tax entities, meaning the company's profits and losses flow directly to the owners' personal tax returns, avoiding the double taxation faced by traditional corporations. LLCs also provide flexibility in management, ownership, and taxation, making them highly adaptable for both small and growing businesses. Here's a step-by-step guide to forming an LLC in Utah.

1. Naming Your Utah LLC

Choosing a name is both exciting and challenging—it represents your brand and communicates your business identity. Start by clarifying your business concept and considering names that are memorable, professional, and reflective of your products or services.

You can gather ideas by consulting friends, conducting online research, or using business name generators for inspiration. Once you have potential names, ensure they are unique and comply with Utah's LLC naming rules.

Utah LLC Naming Rules

In Utah, an LLC name must include "Limited Liability Company," "LLC," or "L.L.C." Certain words, such as "bank," "insurance," or "university," are restricted. The name also cannot be misleading, resemble a government agency, or closely match existing Utah business names.

After narrowing down your choices, check for trademark availability through the U.S. Patent and Trademark Office to avoid national conflicts. You may also reserve your chosen name by submitting a reservation form via mail to the Utah Division of Corporations, which will hold it for 120 days for a nominal fee.

Doing Business As (DBA)

If you plan to operate under a name different from your LLC, such as expanding product lines or branding multiple ventures under one company, you will need to register a DBA (or assumed name) through Utah's online portal. This allows you to open bank accounts and conduct business legally under the alternate name.

2. Appoint a Registered Agent

Utah law requires all LLCs to designate a registered agent, a person or service responsible for receiving official documents, legal notices, and tax correspondence.

Your registered agent can be an individual or a business entity, including an LLC member. Requirements include:

• Must be 18 years or older
• Must have a physical address in Utah (P.O. boxes are not allowed)
• Must be available during normal business hours

Many entrepreneurs hire a registered agent service to ensure compliance and to avoid being tied to a specific location during business operations.

3. Decide on Management Structure

LLCs can be member-managed or manager-managed. In a member-managed LLC, all owners actively participate in running the business. Manager-managed LLCs designate one or more managers (who may or may not be members) to handle day-to-day operations.

Member-managed structures suit small businesses with hands-on owners, whereas manager-managed structures are better for larger LLCs with passive investors. In Utah, an LLC is defaulted to member-managed unless otherwise specified in the Certificate of Organization.

4. File a Certificate of Organization

The Certificate of Organization officially creates your LLC in Utah. This can be done online or by mail through the Utah Department of Commerce.

Information Required Includes

• LLC name and principal office address
• Registered agent information
• Names of members and managers
• Business purpose and duration

Online filings are typically faster and more convenient. Once submitted and approved, your LLC is legally recognized in the state.

Fees: The filing fee is $54 for online submissions. Paper filings take longer and may require up to three weeks for approval.

5. Draft an Operating Agreement

While Utah does not legally require an operating agreement, having one is highly recommended. This document clarifies ownership, responsibilities, financial arrangements, and operational procedures.

A well-crafted operating agreement can prevent disputes among members and strengthen your liability protection. Elements usually include:

• LLC name, address, and duration
• Membership and ownership percentages
• Management and voting rights
• Allocation of profits and losses
• Procedures for adding or removing members
• Rules for dispute resolution and amendments

Templates are available online, but consulting a lawyer ensures that your operating agreement fits your specific needs and legal requirements.

6. Obtain an Employer Identification Number (EIN)

An EIN, issued by the IRS, functions as your business's tax ID. It is required for multi-member LLCs, hiring employees, opening business bank accounts, and filing taxes.

The responsible party for the EIN must be a natural person (not a business) who controls the LLC's funds and assets. Applying is free and can be completed quickly online through the IRS website.

7. Acquire Necessary Licenses and Permits

Your LLC may require licenses and permits at the federal, state, or local level depending on the industry. Utah does not have a general state business license, but certain professions are regulated by the Division of Professional Licensing.

Other Common Requirements Include

• Sales tax license for selling taxable goods or services
• Local city or county business permits
• Industry-specific licenses (construction, food service, healthcare, finance)
• Health, fire, building, and signage permits

Operating without the proper licenses can lead to fines or business closure, so it is critical to verify all requirements with appropriate authorities.

8. Determine Your Tax Classification

By default, LLCs are pass-through entities: profits and losses flow to members' personal tax returns.

Single-Member LLCs

Taxed like sole proprietorships. Members report income on their personal return and pay self-employment taxes.

Multi-Member LLCs

Taxed as partnerships. The LLC files Form 1065, while members report income on their returns and pay self-employment taxes.

LLCs can elect to be taxed as C-Corporations or S-Corporations for potential tax advantages, such as retaining earnings or reducing self-employment taxes on distributed profits. These elections require filing IRS forms (8832 for C-Corp, 2553 for S-Corp).

9. Open a Business Bank Account and Establish Credit

Separating personal and business finances is essential to protect your liability shield and maintain clear accounting records. You will need your EIN and Certificate of Organization to open a bank account.

A business credit card helps establish credit history, manage expenses, and may improve financing options in the future.

10. Obtain Business Insurance

Business insurance protects against risks such as liability, property damage, or employee injuries. Common policies include:

• General liability insurance
• Professional liability (E&O) insurance
• Workers' compensation
• Commercial property and equipment insurance
• Commercial auto insurance
• Business owner's policy (BOP)

Choosing the right combination depends on your business activities, size, and risk exposure.

11. Maintain LLC Records and File Annual Reports

Keep all formation documents, operating agreements, and other official records in a safe location.

Utah requires annual reports to maintain LLC good standing, with fees payable online. Late filings can result in penalties or administrative dissolution of your LLC.

Utah LLC FAQs