- [Instructor] How to form an LLC in Utah.
Utah is an excellent place to form a new LLC.
With low corporate taxes
and great access to venture capital.
Utah ranks third in ease of doing business in the US.
Every state has slightly different requirements
for forming an LLC.
Follow along closely to learn the required steps
for creating your own Limited Liability Company
in the State of Utah.
(soft piano music)
There are two ways to form an LLC in Utah.
You can form one yourself.
Or you can hire a service to do it for you.
Let's start by looking at the five basic requirements
to form an LLC in Utah on your own.
You can also find these steps in more detail
on our website linked in the description below.
One, name your LLC.
Every state has its own rules about what kind
of names are allowed for LLCs.
In general you will need to observe these naming guidelines.
Your must include the phrase Limited Liability Company
or one of its abbreviations, LLC or L.L.C.
with a period following each letter.
Restricted words such as Bank, Attorney, Law Office, etc.
may require additional paperwork
and may also need a licensed professional
to be part of the LLC.
Your name cannot include words that could confuse
your LLC with a government agency.
Such as FBI, Treasury, State Department, etc.
You cannot use a name that has already been registered.
To see if your name is available in your state,
you'll need to do a name search.
This free service is available
on your state's Secretary of State website.
Check out our free guide for finding
the direct link to your state.
We also recommend that you check to see
if your business name is available as a web domain.
Even if you don't plan to make a business website today
you may want to buy the URL in order to prevent others
from acquiring it.
Two, choose a registered agent.
Utah requires that you nominate a registered agent
for your LLC who is your businesses' point of contact
with the state.
The registered agent can be an individual
within the company including yourself.
Or you can hire a professional service authorized
to do business in Utah.
They will send and receive legal papers on your behalf.
These documents include official correspondence
like legal summons, and document filings.
Which your registered agent will receive
and forward to you.
Your registered agent will help remind you
to file the necessary reports.
Failure to properly maintain your LLC
can result in fines and dissolution.
So this assistance is valuable.
Three, file the Certificate of Organization.
To register your Utah LLC you will need to file
the Certificate of Organization with the State of Utah.
This can be done online or by mail.
You should also decide whether your LLC
will be member-managed or manager-managed.
Member-managed means all members of the LLC
manage the company.
This is good for small organizations where everyone
is involved in the day-to-day operations.
The second option is manager-managed,
where individuals are appointed to manage the LLC.
This is appropriate for larger organizations.
Where not everyone is involved in the day-to-day
affairs of the business.
Four, create an operating agreement.
Although not every state requires it
you should always create an operating agreement
to establish ownership terms and member roles
for your LLC.
This foundational document is the core of your LLC
and will help you maintain your organization
as well as further establish your LLC
as a separate legal entity.
There are six main sections of an operating agreement.
Organization outlines when and where the company
was created, who the members are,
and how the ownership is structured.
Management and Voting addresses how the company
is managed as well as how the members vote.
Capital Contributions covers which members
financially support the LLC
and how more funds will be raised in the future.
Distributions outlines how the company's
profits and losses are shared among members.
Membership Changes describes the process
for adding or removing members
as well as if, and when, members can transfer
their ownership shares.
And Dissolution, which explains the circumstances
in which the LLC may be dissolved.
An operating agreement is an internal document,
it does not need to be filed with the state.
However, it should be updated every time
there is a change in membership
or management at the company.
You can download a free sample operating agreement
or create a custom one using our free
operating agreement tool at Howtostartanllc.com.
Five, obtain an EIN.
Lastly, you'll need to get
an Employer Identification Number or EIN
from the IRS.
Also know as a Federal Tax Identification Number.
Your EIN is like a Social Security number for your LLC
and it's how the IRS tracks your business for tax purposes.
An EIN is also necessary to open a business banking account
and legally hire employees.
EINs are free of charge and can obtained
from the IRS online or through the mail.
And with that, you'll have formed a Utah LLC on your own.
Option two, hire a professional service.
The second way to create a Utah LLC is to hire
a professional service to create your LLC for you.
Hiring a professional service to file your forms
and act as your registered agent for the LLC
will cost you an additional $50-$150.
However, there are several benefits
to working with a pro.
A hired registered agent helps with getting your reports
filed on time, helps you stay organized
by keeping your business mail separate,
and is available at all regular business hours
to accept official mail
and legal papers on your LLC's behalf.
A final and important additional benefit
of using a service is privacy.
A professional service will provide a level
of privacy by withholding your personal name
and home address from the LLC's contact information.
There are many reasons why you might not
want your personal information easily accessible
and associated with your business.
Hiring a professional LLC formation service
is an easy way to accomplish this.
Now that you've seen the different requirements
and ways you can form an LLC in Utah.
Visit our site and take some time to research
your options and establish a solid foundation
for your business activities.
Click on the links in the description below
to research the top five professional formation services.
Or get more information on how to form
a Utah LLC on your own.
Now you know all the steps to form an LLC in your state.
For our more detailed guide, go to Howtostartanllc.com.
You can also create an operating agreement
and use our business plan tool free of charge.
Give the video a like if you found it useful,
and subscribe if you'd like to see more,
and if you have questions or encounter
any roadblocks leave a comment below.
Good luck in starting your small business.
(slow peaceful music)