If you own a business that was created in a state other than Utah, you will need to qualify or register that business in Utah if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Utah) limited liability company (LLC) to do business in Utah.
For Utah purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Utah. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in Rhode Island is a foreign LLC in Massachusetts.
According to Utah’s LLC Act, you are required to register your foreign company with the state of Utah if you are “doing business” or “transacting business” in Utah. (The Act uses both terms.) What does this mean? Well, like most states, Utah’s LLC Act does not specifically define either the phrase “doing business” or the phrase “transacting business” in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
Certain exceptions may apply and the rules can get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo’s articles on Internet Sales Tax: A 50-State Guide to State Laws. In addition, the Utah Division of Corporations and Commercial Code has a document that provides further guidance.
Like most states, Utah’s LLC Act specifies certain activities that do not constitute doing business in the state. The items listed include:
For the full, legal description of each of the listed items, check Section 48-3a-905 of the Utah Code. If your LLC’s only activity in Utah is one or more of the listed items, you should not need to register with the state.
To register your business in Utah, you must file a Foreign Registration Statement (Foreign Limited Liability Company) with the Utah Division of Corporations and Commercial Code (DCCC). You can download a copy of the application form from the DCC website.
To complete the form, you must provide more or less the same information that you need to create an LLC in your home state. More specifically, for a Utah application for registration, you need to provide:
The filing fee is $70.
If your LLC does business in Utah without authority, it cannot bring a lawsuit in the state. However, not being registered does not invalidate your LLC’s contracts or prevent it from defending a lawsuit in the Utah. Also, a limitation on the liability of an LLC member is not waived solely because the company does business in Utah without authority.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Utah are similar. You will, however, have to use a different application form. See the Utah Division of Corporations and Commercial Code website for forms, information, and filing instructions for registering a foreign corporation in Utah.