How To Start A Business In Utah (2024 Guide) – Forbes Advisor

You probably have a great business idea and want to get started as soon as possible. But before you build and market your business, take the time to write out a business plan that goes over the basics of your new venture. The business plan should clearly describe what you sell, how you will source materials, staff that is needed, who your target market is and set a budget with projected revenue for the business.

This plan serves as a blueprint for your company and helps you turn your idea into actionable steps. You’ll need this business plan if you seek financing. It is a good idea to review your business plan regularly once your business is up and running to make sure that you are on track with your goals.

Choosing the right entity is crucial because it helps you mitigate personal liability and establishes how revenues are treated for tax purposes. While it is possible to change the entity and company structure, this isn’t always easy and can come too late. There are several entities to choose from:

• Sole proprietorship
• Partnership
• Limited partnership (LP)
• Limited liability partnership (LLP)
• Limited liability limited partnership (LLLP)
• Limited liability company (LLC)
• Corporation

Sole proprietorships and partnerships require no registration and provide no protection from liability. LPs, LLPs and LLLPs may provide some liability protection. Corporations and LLCs shield your personal assets from liability.

An LLC allows you to choose whether you want to be taxed as a corporation or whether you wish to pass the income through to your personal tax returns. A business attorney or accountant can help you review the options and their liability and tax implications.

How you register your company will depend on what entity you choose for it. Sole proprietors and partnerships using a name other than the owners’ legal names must complete a “doing business as” (DBA) form with the Utah Division of Corporations and Commercial Code. There is a $22 fee to complete the form, which can be done as a paper application or via the online portal.

When filing for an LP, LLP, LLLP, LLC or corporation, you will file the certificate for limited partnership, application for domestic limited liability partnership, certificate for limited liability limited partnership, articles of organization or articles of incorporation, respectively. File these forms at:

State of Utah
Division of Corporations and Commercial Code
PO Box 146705
Salt Lake City, UT 84114-6705

It costs $54 to file articles of organization and articles of incorporation and $70 for the other forms.

Once the business entity is established, it is time to focus on the company’s finances. This includes getting bank accounts, establishing unemployment tax accounts (if you have employees) and preparing the company to file taxes. Before you can get a bank account (for most entities) or establish an unemployment account, you’ll need to obtain an employer identification number (EIN) from the IRS website. This is free to do.

This nine-digit number is similar to a Social Security number for the company and is required to get a business bank account (for most entities) and to establish state unemployment and tax accounts. Be sure to set the finances up so that your personal funds are not commingled with your business funds. This will help prevent confusion and accidental liability on your personal assets.

If your business needs financing, you’ll be glad that you already have a business plan in place, as this is a required document for banks and investors who may loan money to or invest in your business. If you are getting a bank loan, you may be asked to show personal finances to demonstrate your financial responsibility and even guarantee the funds in some cases.

Not every business uses third-party financing to get started. If you have savings and are bootstrapping the business, make sure that you have enough to get you through the initial months when you are not making much of a profit and are growing the business.

Your company’s location can be key to its success if you depend on foot traffic or walk-in business. Other businesses can operate successfully from home or online without a retail location. Assess your needs and choose a location that will help your business succeed.

If you will be leasing commercial property, make sure you completely understand the terms of the lease and your responsibilities. Some leases require the tenant to handle upkeep of systems, such as heating, ventilation, and air conditioning (HVAC).

You don’t need a general business license once you have filed the correct entity paperwork with the Utah Department of Commerce’s Division of Corporations and Commercial Code. However, certain businesses and professions may require specific licensing and permits to operate legally. Check with your county and municipality to learn about local requirements as well.

Businesses selling goods and taxable services will also be required to obtain a sales tax number, which is free to obtain. You’ll register on the Taxpayer Access Point (TAP) online portal to get the sales tax number and manage your account.

Insurance is something you buy to protect your business from costly claims. Slip and fall accidents or injury caused by your products or services can create expensive claims. Business liability insurance will protect your business.

Some insurance is required. For example, if you sign a lease, your landlord will likely require a general liability policy to protect the property. If you have any employees, you are required by law to obtain a workers’ compensation policy to protect them. Check with a commercial insurance agent for information about policies to protect your business from expensive losses.

Bottom Line

Getting a Utah business started is exciting, but don’t skip important steps such as registering your business or getting an EIN. These are important steps in making your business a legal entity in Utah. Follow your business plan and use it even after you start operations to make sure you stay on track with your objectives and goals.