How to Start a Business in Utah (Updated 2024)

If you want to start a business in Utah, you'll need to complete the applicable legal requirements, including registering your business, applying for permits, and signing up for taxes. In addition, you'll need to find a location for your business, get insurance, and open a bank account before you can start operations.

Learn the steps to opening your Utah business below.

1. Choose a Business Idea

To start a business, the first thing you need is an idea. Take time to explore and research potential ideas for your business. Think about the areas that you already have experience in. If you've already spent time employed cleaning homes, then you're better positioned to start a residential cleaning business. Your previous experience can help inform you about the cleaning supplies you'll need to buy, what prices you should charge, how many employees you need, and what sort of equipment to invest in.

Besides having the experience, you'll need to ask yourself other questions like:

• What would the startup costs be?
• Do I have enough capital to sustain my business until I can make it profitable?
• Is there demand in my geographic region for my proposed goods or services?
• How much competition is already out there? Is the market already saturated or would my business meet an unmet need?

After you have your business idea, write a business plan. Drafting a business plan can help you map out your business's early years. You can better estimate your startup expenses and develop a marketing strategy. You can also determine whether your business will be profitable and how long it'll take to reach a sustainable revenue.

When developing your business plan, you should be thinking about money. You should have a good idea of your potential startup costs. What's the minimum investment you need to start your business? Do you need to raise additional funds? Investors and lenders like to see a business plan. Having a plan at the start can help your chances of getting a business loan or a capital investment. (Check out our section on business financing, loans, and capital for ideas and guidance on financing your small business.)

2. Decide on a Business Legal Structure

Determine the best ownership structure for your business. You'll want to consider which business entity structure offers the type of liability protection you want and the best tax, financing, and financial benefits for you and your business.

Consider the most common legal structures for a small business:

• sole proprietorships
• partnerships
• limited liability companies (LLCs), and
• corporations.

Besides the four main business structures, Utah recognizes other types of entities. For example, in Utah, you can form a limited partnership, limited liability partnership (LLP), or limited liability limited partnership (LLLP), which are types of partnerships where some partners have limited liability.

Alternatively, if you provide a qualified professional service, you can create a professional corporation or professional LLC in Utah. In general, a "professional service" is a service that requires a professional license.

Depending on which business structure you choose, you might be able to elect to become an S corporation, a tax entity. Different types of businesses, such as LLCs and corporations, can elect to be taxed as S corporations but legally remain corporations or LLCs. You can speak with a tax attorney or tax professional to learn more about S corporations.

Utah's Division of Corporations and Commercial Code (DCCC) has an excellent webpage on business entities that offers forms, links, and guides for the different business entities.

3. Choose a Name for Your Utah Business

Next, you need a name for your business. Pick a business name that's unique and marketable. Your name should also capture the business image you hope to cultivate. Keep in mind that customers will come across your business name in advertisements, listings, in your store, and on your company website.

Utah, like other states, has laws around business names. Utah law requires that your business name be distinguishable—meaning, different enough—from any business name, fictitious name, assumed name, trademark, or service mark already on file with the DCCC. You can see which names are available for your business by doing a business name search on the DCCC website.

Entity name designators: For most business entities, Utah law requires you to include certain words that identify your business's entity structure (like including a word such as "LLC" for LLCs or "Company" for corporations). See our article on how to form a Utah LLC for more information.

Reserving your business name: You can reserve an available name for 120 days by filing an Application for Reservation of Business Name with the DCCC. You can also renew your business name reservation. As of 2024, the filing fee to reserve or renew a name is $22. You can mail or fax the application to the DCCC.

Registering a DBA: If you do business under a name other than your corporate or true name, then you're using an assumed name or DBA (also called a "trade name" or "fictitious name"). DBAs usually apply to sole proprietors or general partnerships that don't do business using their true, personal names. But it can also apply to LLCs, corporations, and other registered businesses that operate under a name other than their legal or corporate name (usually listed on their formation paperwork). If you use an assumed name (DBA), you must register it with the DCCC. You can register a DBA online or mail a DBA application to the DCCC. A DBA registration lasts three years. As of 2024, the filing fee is $22 to register a DBA. (See the DCCC's Doing Business As (DBA) webpage for more details.)

If you conduct business online, you might want to register your business name as a domain name. Moreover, to avoid trademark infringement issues, you should do a federal and state trademark search to make sure the name you want to use isn't the same as or too similar to a name already in use.

4. Register Your Business Entity With the Utah Division of Corporations and Commercial Code

You can register your business online through Utah's OneStop Business Registration System (OneStop). You can also submit the appropriate application form by paper to the DCCC. Some business types don't require you to file any paperwork.

Here's how to form each type of business:

• Sole proprietorship: You don't need to file any organizational documents with the state to start a sole proprietorship in Utah.
• General partnership: To create a general partnership in Utah, you don't need to file any organizational documents with the state. But you should draft a partnership agreement to establish the rules for how your partnership will be managed and how the assets and liabilities will be divided among the partners.
• Limited partnership: You must file a Certificate of Limited Partnership with the DCCC to create a Utah limited partnership.
• Limited liability partnership (LLP): A partnership can become an LLP in Utah by filing a Statement of Qualification (Limited Liability Partnership) with the DCCC. The partners must approve the conversion.
• Limited liability limited partnership (LLLP): To form an LLLP in Utah, file a Certificate of Limited Liability Limited Partnership with the DCCC.
• LLC: To create an LLC in Utah, you must file a Certificate of Organization with the DCCC. You should also prepare an operating agreement to establish the basic rules for your LLC's operations.
• Professional LLC: Licensed professionals of qualified services can form a professional LLC in Utah by filing a Certificate of Organization (Professional Services Limited Liability Company) with the DCCC.
• Corporation: To create a corporation in Utah, you must file Articles of Incorporation with the DCCC. You should also prepare and adopt bylaws for your corporation. Corporate bylaws, like an LLC's operating agreement, set out your corporation's internal operating rules. You don't need to file your bylaws with the state.
• Professional corporation: Licensed professionals of qualified services can form a professional corporation in Utah by filing Articles of Incorporation (Professional) with the DCCC.

To form some of these businesses, you need to appoint a registered agent in Utah for service of process. A registered agent agrees to accept legal papers on the company's behalf.

After you form your corporation or other applicable business with the SOS, you can file IRS Form 2553, Election by a Small Business Corporation, with the IRS to elect S corporation tax status.

5. Apply for Utah Licenses and Permits

Every business needs to apply for at least one business license, permit, or registration. All businesses must be licensed by the city, town, or county where they'll operate. You can find more detailed information in our article on Utah business licenses.

Tax registration. If you sell taxable goods or services in Utah, you must register with the Utah State Tax Commission (USTC) TO report and collect sales tax and obtain a sales tax number and license. If your business has or will have employees, you must register with the USTC for employer withholding taxes. You can register for both types of tax—and other business taxes—online via OneStop or Utah's Taxpayer Access Point (TAP).

Employer identification number (EIN). If your business has employees or is taxed separately from you, you must obtain an EIN from the IRS. Even if you're not required to get an EIN, there are often business reasons for doing so. For instance, banks often require an EIN to open an account in the business's name and other companies you do business with could require an EIN to process payments. You can get an EIN by completing an online application on the IRS website. There's no filing fee.

Regulatory licenses and permits. You might need to apply for permits or licenses related to health and safety, the environment, building and construction, and specific industries or services. Different departments and agencies oversee various regulatory licensing. With OneStop, you can register your business and apply for licenses and account numbers simultaneously with all of the following state agencies:

• USTC
• Utah Labor Commission
• Utah Department of Commerce
• Utah Department of Workforce Services, and
• Utah Department of Environmental Quality.

For information about local licenses and permits, check the websites for any cities or counties where you'll do business. You can apply for business licenses in many Utah cities using OneStop.

Professional and occupational licenses. Utah's Division of Professional Licensing (DOPL) is the umbrella agency for nearly all of the state's regulatory boards and commissions for licensed professions and occupations. The licenses section of the DOPL website lists the professions and occupations the DOPL handles.

6. Pick a Business Location and Check Zoning Regulations

Once you've covered the initial legal requirements for starting a business, it's time to choose a location for your business. Before signing on the dotted line, you'll need to think about the costs, location and space, and local zoning:

• Make sure you can afford your desired space. Consult your business plan to see what you can afford, especially during your company's early months. If you plan to buy, you'll likely be responsible for a mortgage, utilities, and property taxes. If you lease, you'll need to budget for rent, a security deposit, utilities, and other potential shared or individual costs. If you lease a commercial space, negotiate terms that'll work for your business in the long term.
• Think about the location and layout. When you look for a place to run your business, think about the location and the space itself. First, consider your target market and whether you need a spot that's central and walkable or accessible to cars. Or, alternatively, do you necessarily need a spot that the public can access? Second, consider the layout and square footage you need to run your daily business activities. Do you need storage space or offices? Will you need to divide the space between public-facing and employees only?
• You need a location that has the proper zoning. Confirm that your desired property is zoned for your kind of business. Sometimes commercial zoning can be split into different subcategories like retail and industrial. You can usually find zoning regulations for your town or city by reviewing your local ordinances and contacting your town's zoning or planning department.

Do you need a physical location for your business? You'll typically need a mailing or office address for your business. Oftentimes, an address is legally required. Your address can sometimes be your home address, a P.O. box, or a coworking space, among other options. See our article on whether you need a physical address for your small business to learn more.

Can you run your business out of your home? You might be able to run your business out of your home. Home-based businesses are becoming more popular, especially for online businesses. If you want to operate your business from home, check your area's zoning laws. As far as allowable business activities, residential zoning laws are often stricter than commercial zoning laws. Look over your lease (if you rent your home) and homeowners association rules (if applicable), either of which might ban some or all home businesses.

7. Register and Report Business Taxes

Utah taxes every kind of business. You can file and pay your taxes online via TAP. The USTC's current forms section has state tax forms and links to file and pay your taxes online.

Sole proprietorships. As a sole proprietor, you'll pay state taxes on business income as part of your personal state income tax returns (Form TC-40).

Partnerships. Partners pay state taxes on partnership income on personal tax returns. Unless exempt, your partnership must file Form TC-65. Partnerships are required to withhold Utah income tax on all business partners, trust or estate partners, or nonresident individual partners. Partnerships and other pass-through tax entities can elect to pay tax at the entity level on behalf of individual partners (or members or shareholders). These individual partners can then claim a tax credit on their personal return. This pass-through entity election is made by filing TC-75, State and Local Tax (SALT) Report. Registered partnerships (limited partnerships, LLPs, and LLLPs) must file an annual report/renewal and pay a renewal fee ($18 as of 2024) to the DCCC.

LLCs. By default, LLCs are considered "pass-through tax entities," meaning members pay state taxes on their share of LLC income on their personal tax returns. In addition, LLCs themselves have to file an additional state tax form—either a partnership/pass-through entity return (Form TC-65) or a corporation return. As with a Utah partnership, your LLC can pay members' individual taxes at the entity level using Form TC-75. Alternatively, a Utah LLC can elect to be taxed as a corporation by filing Form 8832, Entity Classification Election with the IRS. Utah LLCs must also file an annual report/renewal and pay a renewal fee ($18 as of 2024) to the DCCC. For more, read our article on LLC annual report and tax filing requirements in Utah.

Corporations. Shareholders must pay state taxes on their dividends from the corporation. A shareholder-employee with a salary also must pay state income tax on their personal state tax return. Utah corporations and corporations with Utah-based income must file TC-20, Utah Corporation Franchise and Income Tax Return. Utah imposes a franchise tax on corporations: Your corporation must pay a minimum tax (privilege tax) of $100 (as of 2024). Depending on your corporation's tax liability, you might be required to make quarterly estimated tax payments. Finally, corporations must file an annual report/renewal and pay a renewal fee ($10 as of 2024) to the DCCC.

If you have employees, you must also deal with state employer taxes.

And, apart from Utah taxes, there are always federal income and employer taxes. Check IRS Publications 334, Tax Guide for Small Business, and 583, Taxpayers Starting a Business.

8. Obtain Insurance for Your Utah Business

Regardless of your industry or type of business, you should look into getting insurance coverage for your business. Business insurance can protect your business and your personal assets from unexpected events, such as personal injury lawsuits and natural catastrophes.

An insurance agent can help you explore the different coverage options for your business. You should consider getting general liability insurance to protect your business against claims related to bodily injury or property damage. Your business might also benefit from cyber liability insurance to cover litigation and settlement fees following a data security breach.

For further guidance, see our article on what types of insurance your small business needs.

9. Open a Business Bank Account

No matter the type of business you form, you should consider opening a separate business account to make it easier to track your income and expenses. For some business types, including LLCs and corporations, a separate bank account is necessary to maintain your liability protection.

Additional Help With Starting Your Utah Business

As you begin the business startup process, you should check out the DCCC's How to Register a Business webpage. This webpage has information about OneStop, business entities, and DBA registration. On the same page, you can find a link to a checklist of state agencies that your business might need to register with.

In addition, Utah's state website has created a central hub for business information. The website highlights grants, business resources, and business incentives. You can find a list of business programs and services, many of which are offered through the Utah Governor's Office of Economic Opportunity on the website.

You should also check out the business section of the Utah state website. This section has comprehensive guidance on how to start, run, and close a business. You can also find links to trainings, events, business industry services, and employment.