Utah business guide

How to start a business in Utah

Everything required to legally start a business in Utah, in order, with current costs. Written for first time owners. No fluff.

Step 1. Choose your structure

A sole proprietorship is the simplest option. There is nothing to form, and you report business income on your personal tax return. The tradeoff is that you and the business are the same legal person, so your personal assets are exposed if the business is sued or owes money.

An LLC is a separate legal entity, so business debts and claims generally stay with the business. It is cheap to form in Utah and simple to run, which is why most small Utah businesses choose an LLC. A corporation adds shares, a board, and stricter record keeping. It makes sense if you plan to raise outside investment, but it is more paperwork than most local businesses need.

Step 2. Register with the state

• Registration happens through Utah's OneStop Business Registration system, which handles the Department of Commerce filing and can set up your tax accounts in the same session.
• The LLC filing, called the Certificate of Organization, costs $59 and is filed with the Division of Corporations and Commercial Code. Online filings are usually approved fast.
• A DBA registration costs $22 if you operate under a name different from your legal entity name.
• Every LLC files an annual renewal for $18, due on the anniversary of formation.
• You need a registered agent with a Utah street address. You can be your own registered agent.

Start here: corporations.utah.gov and the OneStop Business Registration portal.

Step 3. Get your federal EIN

Your EIN is your federal tax ID. It is free, it comes directly from the IRS, and the online application takes minutes. Third party sites charge for this. You do not need them. Apply on the IRS EIN application page.

Step 4. Set up state tax accounts

• If you sell taxable goods or services, you need a Utah sales tax license. Registration is free through OneStop or the Tax Commission's TAP system.
• If you hire employees, you need a withholding account and an unemployment insurance account.

Step 5. Get your city or county business license

• Utah has no statewide general business license. Licensing happens at the city level, and at the county level for unincorporated areas.
• Fees and steps differ by city. Read the city guide for where you operate: start a business in St. George or start a business in Cedar City. More city guides are coming.

Step 6. Check professional licensing

Some trades and professions need a state license on top of your city license. That includes contractors, cosmetology, health professions, and others. Licensing runs through the Division of Occupational and Professional Licensing. Check your profession before you start taking work at dopl.utah.gov.

Step 7. Plan for year one cash flow

Most new businesses fail because cash runs out, not because the product was bad. Keep fixed costs low in year one. Invoice the day work is finished and follow up on late payments. Put idle capacity to work instead of letting open hours or unsold inventory sit. Some Utah businesses join a trade exchange to turn unsold time and inventory into purchasing power.

Common questions