How to Incorporate in Utah (August 2024 Update)

Incorporating a business in Utah offers many benefits, including liability protection, tax savings, and investment appeal. Choosing the corporate structure also lends an air of prestige and credibility. While starting the process may seem daunting, Utah aims to make launching a company straightforward. This guide will walk you through the key steps to legally forming your Utah corporation.

Deciding Between an LLC and a Corporation

The first decision is whether to structure your company as a corporation or a limited liability company (LLC). An LLC provides flexibility and easy maintenance without many formal requirements. Corporations have more complex rules but allow you to attract outside investment more easily.

If you plan for your Utah business to remain small or mid-sized, an LLC is likely the better fit. The LLC structure rivals corporations in liability protections without extensive regulatory burdens. However, if seeking venture capital or eventual acquisition, the corporate model wins out. Corporations also carry an aura of establishment that LLCs currently lack.

While LLCs pass all profits and losses to the personal returns of members, corporations face corporate income taxes. However, corporations can save on taxes when reinvesting earnings. For businesses with over $250k in profits or those offering extensive employee benefits, the corporate model may provide advantages.

Checking Business Name Availability

Before officially registering your Utah corporation, first confirm your desired business name is available. Start by brainstorming names that are unique, easy to understand, and relevant over the long term. Avoid trends or terms with a short shelf life.

Check your name against existing brands through search engines, the USPTO database, and the Utah Business Entity Database. Remember to try variations on spelling, pluralization, and phrasing. If your preferred name already belongs to another company, get creative with alternatives until you find one that is distinguishable.

You can also directly reserve a Utah business name for 120 days by filing an Application for Reservation of Business Name. This guarantees no one else can claim your name while you get your corporation up and running.

Appointing a Registered Agent

Every corporation in Utah needs a registered agent, designated when filing the articles of incorporation. The registered agent accepts legal documents and notices on behalf of your business. They must have a valid Utah street address and remain available during regular business hours.

While you can serve as your own registered agent, this requires listing your name and personal address on the public-facing articles of incorporation. Instead, most corporations hire a professional registered agent service to keep private details off state records. This also saves you time sorting mail and fielding unwanted calls.

Submitting Articles of Incorporation

Filing for articles of incorporation formally registers your business with Utah’s Department of Commerce. You'll submit details like your corporation's purpose, number and type of shares, registered agent information, and more.

Unfortunately, most of the articles' contents becomes searchable through Utah's public database. Using a professional registered agent service prevents your personal details from displaying. You only need to list the registered agent's company address.

The articles of incorporation filing costs $54 in Utah. You can submit applications online, by mail, fax, or in person. Turnaround runs 1-2 business days for online applications versus 1-2 weeks for mailed submissions.

Drafting Corporate Bylaws

While not required, bylaws provide critical corporate ground rules. Your bylaws should outline organizational hierarchies, voting procedures, board member responsibilities, and shareholder rights.

Rather than starting from scratch, many new corporations use pre-made bylaw templates. These cover common topics like finances, meetings, records maintenance, amendments protocols, and more. You can then customize bylaws to suit your business needs. Some incorporation services also include complimentary templates.

Additional steps may include appointing company directors, issuing stock certificates, holding an introductory board meeting, and taking meeting minutes.

Obtaining Your EIN

You'll need an Employer Identification Number (EIN) to open business bank accounts and file taxes. An EIN functions like a social security number for your company. Applying takes minutes through the IRS website and immediately provides your EIN. If preferred, you can also submit applications by fax, mail, or phone.

Utah State Business Registration

The Utah State Tax Commission consolidates its many business registrations into one form – the TC-69. Once submitted, you've completed all necessary registrations for income taxes, payroll taxes, sales and use taxes, and more. For most new corporations, you can simply file this single TC-69 document rather than various forms across agencies.

Electing S Corporation Status

By default, the IRS classifies corporations as C corporations, which face double taxation on company profits. Many smaller corporations instead opt to become S corporations, which avoid this dual taxation. Filing as an S corp means shareholders only face taxes on distributed dividends, rather than retained earnings.

To qualify for S corporation status, submit IRS Form 2553: Election by a Small Business Corporation. Most small businesses benefit from electing S corp taxes unless they plan to fund extensive reinvestment through retained earnings.

Securing Licenses and Permits

Navigating the web of permissions needed to operate legally has long frustrated entrepreneurs. However, the Small Business Administration offers an incredible tool that simplifies the process – the Licenses and Permits search.

Just input your planned business activities, Utah location, and owner details. The tool then outputs specialized state, local, and federal licenses your company needs. From liquor permits to sales tax ids, this search cuts through the guesswork.

You can then work down the list, tracking completion status to ensure full compliance. Some licenses only require registration while others need applications or approvals before starting operations.

Filing Obligations to Maintain Good Standing

Incorporation marks the starting line for your Utah business, not the finish. You must complete annual filings and taxes to remain legally compliant. Expect franchise taxes on income, sales and use taxes, business renewals, and potential public health or transportation obligations.

The Utah Annual Report falls due on your company's registration anniversary each year. This confirms your business' contact information and ownership details remain accurate. Annual reports cost just $18 in Utah, with a $10 late penalty.

Hiring a registered agent service with filing reminders and tracking helps avoid missed reports or predicable deadlines. Some even offer automated renewal services. With all the effort launching a company requires, leveraging professional support for routine compliance offers real relief.

In Closing

While launching a Utah corporation requires several steps, the state aims to facilitate businesses and minimize barriers to entry. Resources exist to simplify processes from drafting bylaws to obtaining licenses. Finding the right corporate name alongside a reputable registered agent service sets the stage for success.

Remember that maintaining your corporation remains crucial long after cutting the ribbon. But between online filing options, template libraries, and consultant networks, Utah entrepreneurs have all the tools needed to incorporate smoothly. Leverage available support networks and don't hesitate to request help when needed – building a thriving business rarely follows a straight line.