How to Register a Business in Utah

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TLDR

Utah is small business-friendly, with 313,590 small businesses, employing 45.4 percent of Utah employees.
Before registering, though, it's a good idea to map out your business, including your location, your ideal customer, and your marketing and sales approach, to name a few topics. You can do this by drafting a business plan.
In Utah, you can choose from several different types of business structures. One of the more prevalent business types is the sole proprietorship. If you operate as a sole proprietorship, you do not have to formally file your startup in Utah. Instead, any profits or losses are reported on your tax return. In addition to sole proprietorships, four other popular Utah business entities include partnerships, limited partnerships, corporations, and limited liability companies (LLCs).
You'll also have to choose a name in choosing your startup's structure. When picking a name for an LLC, corporation, or limited partnership, you'll need to distinguish it from other business names already registered with the state. You can check for available names by visiting Utah's business name search database.
Next, after choosing your startup's name, you need to identify a registered commercial agent (often referred to as a registered agent in other states).
Finally, after completing the above steps, it's time to submit your formation forms to Utah's Department of Licensing and Regulatory Affairs. The State of Utah provides sample forms for your use or review for new entities.
If you founded a startup in a state other than Utah but want to conduct business in Utah, you'll have to register your business as a foreign entity. For example, a registered startup in Utah is a "domestic" startup. However, if you have a Delaware registered startup but want to conduct business in Utah, your business would be considered a "foreign" startup.

Thinking about locating your startup in Utah? Well, you're not alone.

With more than one billion in venture capital investment in 2020, Crunchbase reports that Utah's venture capital investment has grown by 55 percent from 2016 to 2020.

According to Utah's Governor's Office of Economic Opportunity, Salt Lake City has recently been named the 12th best city to find a startup. Reasons for the attraction? Salt Lake City ranked high in the "availability of capital, affordability, the success of early-stage companies and entrepreneurial culture."

Startups are also emanating from the Provo-Orem area. The Milken Institute has recently ranked this area as the third top "best-performing city in the country for high-tech industries." Provo specifically provides a tremendous entrepreneurial spirit in addition to robust startup culture and numerous opportunities for startups.

Further, Utah is small business-friendly, with 313,590 small businesses, employing 45.4 percent of Utah employees. In 2019, 3,668 businesses exported goods to $16.5 billion from Utah. Of those Utah exporters, 84.5 percent were small, exporting $11.1 billion of total exports.

In the small business community, the top represented industries include professional, scientific, and technical services; construction; health care and social assistance; and retail trade.

As you're launching your startup and exploring where to locate your new business, this article will explore registering your business in Utah.

When Do You Need to Register a Business in Utah?

When you register a business in Utah, you'll need to satisfy several requirements, allowing you to start your company legally and compliantly. Before registering, though, it's a good idea to map out your business, including your location, your ideal customer, and your marketing and sales approach, to name a few topics. You can do this by drafting a business plan.

To help guide you in drafting your business plan, you can check in with the U.S. Small Business Administration or SCORE, which focuses specifically on small businesses and startups. Utah's Governor's Office of Economic Opportunity also offers numerous resources for Utah founders when starting a new business, in addition to resources specifically for entrepreneurs. Once you've identified some of the basics about your startup's operation, it is time to register your business.

Below, we've broken the Utah requirements into an easy step-by-step process.

Determine Your Business's Entity Structure

Before registering your startup in Utah, you must first determine your organization's legal entity structure. When deciding upon your startup's structure, it's a good idea to discuss your options with your accountant or attorney, as they can advise you in detail about the ownership, management, tax benefits, and drawbacks of each structure.

In Utah, you can choose from several different types of business structures. One of the more prevalent business types is the sole proprietorship. If you operate as a sole proprietorship, you do not have to formally file your startup in Utah. Instead, any profits or losses are reported on your tax return.

In addition to sole proprietorships, four other popular Utah business entities include partnerships, limited partnerships, corporations, and limited liability companies (LLCs).

For example, a partnership (or a general partnership) is "made up of the two or more persons, called general partners, who enter an agreement to conduct business for a profit. General partners have a fiduciary duty of loyalty and trust to the other partners and must subordinate their interests to those of the partnership."

On the other hand, a limited liability company is a "form of business entity that combines the operational flexibility and tax status of a general partnership with the limited liability protection traditionally associated with limited partnerships and corporations."

Founders must register their startups (typically online) for these entities with the Utah Division of Corporations and Commerical Code.

Choose Your Business's Name

You'll also have to choose a name in choosing your startup's structure. When picking a name for an LLC, corporation, or limited partnership, you'll need to distinguish it from other business names already registered with the state. You can check for available names by visiting Utah's business name search database.

Further, your startup's name must comply with Utah's naming conventions. For example, for corporations, your startup's name must include "corporation," "incorporated," "corp.," "inc.," "company," or "co."

For LLCs, your startup's name must include "limited liability company," "limited company," "L.L.C," or "L.C." You may not use "corporation," "incorporated," "limited," "ltd.," "limited partnership," or "L.P."

Reserved Names

Suppose you're not ready to register your business in Utah, but you want to preserve your startup's name. In this case, you can reserve a business name. You can book your startup's name for 120 days. After that, you'll need to pay a $22 fee for new filings or renewals.

DBA or Assumed Names

Note that reserving a startup name is not the same as registering a "doing business as" or DBA name. DBA names are also called assumed names. For corporations, limited partnerships, and limited liabilities, you'll need to file a Business Name Registration/DBA Application, along with a $22 filing fee.

Suppose the founder chooses an assumed name rather than their name for sole proprietorships. In that case, the founder will need to file that assumed name with the Utah Division of Corporations and Commercial Code, even though the entity itself does not need to be registered. Further, founders with sole proprietorships must check with local and municipal business license offices before conducting business.

Identify Your Commercial Registered Agent

Next, after choosing your startup's name, you need to identify a registered commercial agent (often referred to as a registered agent in other states). A registered commercial agent is "an individual or a domestic or foreign entity that serves in this state as the agent for service of process of an entity. A Commercial Registered Agent needs to register with the Division of Corporations as a Commercial Registered Agent."

Submit Your Formation Forms

Finally, after completing the above steps, it's time to submit your formation forms to Utah's Department of Licensing and Regulatory Affairs. The State of Utah provides sample forms for your use or review for new entities.

For example, if you choose to register as a for-profit corporation, you will file an Articles of Incorporation application along with a non-refundable $70 filing fee.

For Utah startups registering as an LLC, you will file a Certificate of Organization application along with a non-refundable $70 filing fee.

How Much Does It Cost to Register a Business in Utah?

Depending upon your chosen entity for your startup, you will have your initial filing fee payment, any additional annual filings, and any taxes. For example, as stated above, you must pay a non-refundable $70 filing fee for registering an LLC. For general partnerships, the filing fee is $22.

You'll need to file annual reports for your entity, requiring a filing fee.

Additionally, most Utah startups must apply for specific business licenses or permits through the Utah State Tax Commission, the Utah Labor Commission, or local municipalities, which all may have separate filing fees.

To help founders complete all business filings and registrations, Utah has created the OneStop Business Registration, helping founders "register businesses with various state agencies based on the selections made throughout the application." Additionally, OneStop Business Registration "will also provide registration information for other state agencies, and local government entities, which are not handled via OneStop Business Registration."

How to Register a Business in Utah that Started in Another State

If you founded a startup in a state other than Utah but want to conduct business in Utah, you'll have to register your business as a foreign entity. Whether a business is a domestic or foreign entity depends upon where the startup was formed and which state governs its management and operation.

For example, a registered startup in Utah is a "domestic" startup. However, if you have a Delaware registered startup but want to conduct business in Utah, your business would be considered a "foreign" startup.

Let's look at an example. Suppose you have a Delaware corporation, but you'd like to conduct business in Utah. Then, you can complete an Application for Authority to Conduct Affairs for a Foreign Corporation, along with a $70 filing fee. For non-profit corporations, the filing fee is $30.

For additional guidance, founders can consult this Utah guide sheet.

The Benefits of Registering a Business in Utah

There are many benefits associated with registering your startup in Utah. Let's look at some top ones:

Availability of capital;
Affordable living (and fantastic outdoor spaces);
Succes of early-stage startups;
Entrepreneurial culture across the state;
Supportive regulatory environment;
Low property taxes;
Low corporate taxes; and
Low individual income taxes.

The Limitations Associated with Registering a Business in Utah

There aren't that many limitations associated with registering your startup in Utah. However, here are a couple of points to keep in mind:

Not the lowest sales tax rates (but also not the highest).
High capital gains tax rates.

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We Can Help!

At AbstractOps, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most—your business.

If you're looking for help registering your Utah startup, we can get your documentation ready, overall shepherding this process to ensure it's done right. Get in touch with us.

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