Limited Liability Companies are the most popular way to start a business in Utah. Thanks to their ease and flexibility, Utah LLCs allow business owners to have greater protection from personal liability and take advantage of better tax rates.
Organize your business with the help of an experienced LLC attorney. When you form your Utah LLC with Paulsen PC, we prepare and file your articles of organization with the Utah Department of Commerce. We also conduct a name search for your Utah LLC to assist you in the preparation of your operating agreement and other customized services for your business. Once your LLC articles of organization have been successfully filed, your business idea becomes a legal business entity.
A Utah Limited Liability Company (LLC) is a business entity created under state law that combines characteristics of both a corporation and a partnership. Like a corporation, the owners of an LLC are generally not personally liable for company debts. Like a sole proprietorship or a partnership, an LLC has operating flexibility and qualifies as a “pass through” entity for tax purposes. This means that an LLC does not pay taxes on its profits, instead profits and losses are “passed through” to the owners. Owners or LLC members then pay tax on their share of LLC income.
More Flexible than a Corporation Entity
- LLCs provide the same liability protection as a corporation with fewer formalities and less paperwork. Unlike larger corporations, LLCs are not required to hold formal meetings or keep corporate minutes.
- When it comes to taxes, Limited Liability Companies have greater flexibility: as an LLC you can choose to be taxed like a simple partnership with pass-through tax advantages. Having the option to be taxed as a partnership can save your business from double taxation. For most small businesses this equates to a large amount of tax savings!
- Limited Liability Companies do not have restrictions on ownership. LLCs are not limited on the number or types of owners, LLC Members, as severally as corporations are limited on the number and types of shareholders.
More Protection than a Partnership
- Members of an LLC have more liability protection than General Partners or even Limited Liability Partners; members of an LLC are not personally liable for the obligations of the business. In a General Partnership partners are jointly and severally liable for business obligations. Even in a Limited Partnership, the general partner is still liable for debts and obligations.
- LLC members also have the ability to participate in management to a greater extent than limited partners.
- LLCs have more options for changing their tax status. As a startup you will usually want to be taxed with pass-through advantages similar to partnerships, but as your company grows switching to a corporation tax status could save you on self-employment taxes. It depends on the stage and profitability of your business.
Utah LLC’s Articles of Organization must include:
- A company name
- The business purpose
- A designated registered agent
- A statement defining the registered agent’s relationship to the LLC and proof of Utah residency or capacity to do business in Utah.
- The initial registered agent must sign the LLC documentation.
- Where the LLC will be located
- Including the street address of the registered office and the name and street address of the registered agent.
- The names of the owners
- An LLC Operating Agreement
- If the company is to be manager-managed, a statement to that effect and the names and street addresses of its initial managers
- If the company is to be member-managed, a state to that effect and the names and street addresses of its initial members
When You Hire Paulsen PC to do your Utah LLC Registration:
- We custom draft your Utah LLC articles of organization.
- We conduct a name search for your future company.
- We finalize and file your articles of organization with the Utah Department of Commerce.
- We cover Utah LLCs state filing fees.
- We create the organizer initial resolution.
- We assist you in the preparation of your LLC operating agreement.
- We save you in time, taxes, and potential liability.
- Choose a registered agent.
- Prepare the Utah LLC articles of organization
- Prepare the Utah LLC operating agreement
- File the articles of organization with the Utah Department if Commerce
- Obtain a federal tax ID number with the IRS once you have confirmation from Utah that your LLC is completely filed.
- Register your Utah LLC with the state tax and labor commissions if you’re going to have employees or need to withhold sales tax.
- Obtain a Utah trade license, if you need one.
- If the city or county you’re going to be operating in requires a local trade license, you’ll need to get one of those too.
- Finally, you might need an approval from city zoning for the location of your office or shop.
Your LLC is considered organized once an original and a duplicate copy of the articles of organization are delivered to the Department of Commerce with the proper filing fee by one or more persons over 18 years of age and the Department of Commerce determines that they are in compliance with state requirements. The Department of Commerce endorses both copies but retains the signed original and returns the duplicate copy to the LLC or its representative. The document is effective as of the day and time it is filed or if a date and time is indicated the document is effective as of delayed effective date and time.