A stable and successful business begins with responsibility and awareness, but most of all, a will to establish a company. It is no secret that doing business is a multi-faceted process that requires a lot of effort, knowledge, and time. In the US, regardless of the state, aspiring entrepreneurs have the opportunity to choose their company’s legal model after analyzing the advantages and disadvantages of multiple options. Today, one of the most reliable legal entities is a limited liability company (LLC).
A limited liability company is one of the organizational and legal forms for doing business. Most commonly, an LLC is created by those conducting business with partners. The participants can officially share the profits, but they are not responsible for the LLC’s debts with their personal property. If the company suffers bankruptcy, its creditors’ indebtedness is paid at the expense of its assets. The owners are not forced to pay anything from personal funds. To learn more about LLC operating agreements, read our guide.
You may be still wondering what other advantages an LLC has compared to other entities. Well, an LLC differentiates the responsibility of all business owners and shares of their initial capital. In any legal proceedings, you do not risk losing your tangible and intangible property or other assets. It is a significant positive indicator of a limited liability company. Secondly, in this version of an enterprise, there is an opportunity to expand your production by attracting new founders who may invest. Thus, an LLC is supposedly the most convenient and acceptable form of establishing a business company.
However, it is necessary to fill out the documents, particularly the operating agreement, to minimize the risks and financial losses. Now, let us take a closer look at the operating agreement. Technically, it is a legal certificate that regulates the relationship between equity owners. It establishes the rights and obligations of each member and the internal corporate culture rules. The agreement also legally protects investments and authorized capital.
In Utah, filling out this kind of covenant is not mandatory. Today, each owner independently determines the need and urgency of compiling an operating agreement. However, keep in mind that you expose your company to any form of legal action without this agreement. Besides, you will have an opportunity to receive tax benefits with a registered operating agreement.
Please read attentively the instructions below and the local laws of the state of Utah. With this knowledge, you will navigate the entire process of establishing and registering an LLC and preparing all the necessary documents as per the law.
The Utah government has passed particular local legislation regarding registering limited liability organizations. The Unified Law on LLC (section 48, Chapter 3A) is the most vital and reliable decree in this regard. We suggest familiarizing with these legal rules and regulations to compete successfully. Thus, you can minimize financial and energy costs.
Imagine that you do not have to find out the requirements and conditions for opening an LLC as everything is unified in one title document. An operating agreement is a particular document, which contains comprehensive information regarding all LLC-related legal procedures. It also includes a list of necessary terms and phrases for a better understanding of the business processes.
Please read the State Law regarding the operating agreement (Section 48-3a-112) carefully. You can also use the step-by-step guide below to fill out the operating agreement form. We strongly advise you to prescribe your understanding of running a business in the covenant as detailed as possible. Double-check the submitted information for accuracy.
Any business activity begins with familiarization with the necessary documentation. The state of Utah requires foreign and domestic LLCs to be registered with the Division of Corporations and the Commercial Code. Initially, the owners need to come up with a unique name for the company. When doing so, make sure that the brand title has no analogs amongst other existing organizations in the state. If you do not take this requirement into account, your application will most likely be rejected.
When submitting the operating agreement, specify the exact date of its completion and append signatures. All documents must contain the written consent of their owners.
Designate the Company’s Agent
In Utah, each company must have a registered agent to represent its interests in the event of legal proceedings and during the registration process. The agent can be either a qualified individual or a business entity operating within the state.
Decide on the Business Model
There are particular fees for each type of LLC. The Corporate Division and the Commercial Code prescribe such payments. For this reason, think ahead and choose an appropriate and most suitable organizational model with limited capacity.
There are two types of LLCs: domestic, operating within the state, and foreign, remaining under the jurisdiction of another state (or even country). When choosing a specific LLC model, you can refer to Utah’s general laws for legal assistance.
Fill Out the Utah Operating Agreement
The most significant issue when registering an LLC is to fill out an operating agreement. Choose the method of submitting the document according to your personal preferences. It is possible to send a request either online or by US mail. Please, specify the chosen organization type and check the information for accuracy as you fill it in.
Submitting an operating agreement includes several steps. First, you must indicate the company’s name and its primary business office’s legal address. Next up, make sure to specify the purpose, working process, terms of implementation, and membership. Information about the owners should include information about their capital shares in percentage. Also, write down the management staff and rank-and-file all the employees.
Afterward, fill in the information regarding your authorized capital, investments, and other tangible and intangible assets. Since your company officially operates in the state and carries out its commercial activities, provide information about the owners’ responsibilities and powers. Remember to give accounting and statistical reports, as well as tax returns, at the designated time.
Thus, the operating agreement is a universal helper in creating an LLC. It establishes general rules for the interaction of both the owners and the employees. Moreover, you can use it to standardize your workflow, hold formal meetings, and organize events.
Pay the Application Fee
Unfortunately, not all services are free of charge when establishing an LLC and submitting an application. Brace yourself to pay all the required registration fees set by Utah laws (currently, about $70). You can make the payment either online via a credit card or by cheque, submitting it with the application form. Please do not delay the payment until the last moment to submit your application in time.
Get an Identification Number
The final element of registering an LLC is the identification number (EIN) assignment. The organization owners must receive it after the relevant state authorities officially register their business. Nowadays, it is a requirement for all business owners since it enables the federal tax service to control financial flows and transactions. Besides, an EIN allows you to issue credit cards to your employees, pay salaries, provide vacations and sick leaves, and perform other banking procedures. To obtain an identification number, send the SS-4 form to the IRS office by mail or online, specifying all the necessary information.
Use this step-by-step plan to establish an LLC and fill out an operating agreement. You can significantly simplify your life and save your working time.