Starting a Business in Utah: A Step-by-Step Guide for Beginners
Disclaimer: This blog is for legal informational purposes only. Nothing within this blog should be considered legal advice. Engaging with this article and this website does not create an attorney-client relationship between you and Walker Law Firm of Cache Valley. We are not your attorneys. Consult with a lawyer if you are in need of legal assistance.
Starting a business can feel both exciting and overwhelming. On one hand, you may be imagining what it will be like to be your own boss, bring your ideas to life, and build something that can grow into your future. On the other hand, the process of legally starting a business comes with paperwork, rules, and choices that can feel confusing if you have never done it before.
If you are thinking about starting a business in Utah, you are not alone. Utah is one of the fastest-growing states in the country, with a reputation for being business-friendly. In fact, national rankings often put Utah near the top for entrepreneurship, thanks to low taxes, a strong economy, and a supportive environment for small businesses. Whether you want to start a small family shop, launch a tech startup, or open a service business, Utah has tools and systems in place to help you succeed.
This blog post will break down the process of starting a business in Utah in clear, simple steps, so you understand the basics. By the end, you will see how each step fits together, from choosing your business structure to registering your company, and even protecting yourself legally.
Step 1: Choose Your Business Idea and Plan
Every business starts with an idea. Maybe it’s a bakery, a landscaping service, an online clothing store, or a technology app. Whatever the idea is, the first step is to turn it into a plan.
A business plan is simply a roadmap that explains what your business will do, who your customers are, and how you’ll make money. You don’t have to make it complicated. A simple business plan might answer questions like:
- What product or service will I provide?
- Who will want to buy it?
- How much will it cost me to run the business?
- How will I let people know about my business?
Even if you don’t plan to show the plan to anyone else, writing it down helps you focus. And if you ever want to apply for a loan or bring in investors, they will likely want to see your plan.
Step 2: Pick a Business Structure
The next step is to decide how your business will be legally set up. In Utah, like everywhere in the U.S., there are a few common options.
- Sole Proprietorship – The simplest option. This means you and the business are the same legal entity. Easy to start, but you are personally responsible for any debts or lawsuits.
- Partnership – Similar to a sole proprietorship, but with two or more people. Partners share profits, but also share liability.
- Limited Liability Company (LLC) – A very popular choice for small businesses in Utah. An LLC gives you personal liability protection, meaning your personal assets (like your home or car) are usually protected if the business is sued or goes into debt. LLCs are flexible and relatively easy to run.
- Corporation – More complex, but useful if you want to raise money from investors or grow very large. Corporations are separate legal entities, which means strong liability protection, but they require more paperwork and rules.
Most small business owners in Utah choose an LLC, because it balances simplicity with legal protection. However, every situation is different. Talking to an attorney can help you choose the structure that works best for you.
Step 3: Register Your Business in Utah
Once you know your business structure, it’s time to make it official.
In Utah, you register your business through the Utah Division of Corporations and Commercial Code. This can be done online, and the process is usually quick.
Here are the basic steps:
- Pick a business name. Make sure no one else in Utah is already using it. You can search online through the Division of Corporations.
- File your paperwork. For example, if you are starting an LLC, you’ll file a “Certificate of Organization.” If you are starting a corporation, you’ll file “Articles of Incorporation.”
- Pay the filing fee. The state requires the payment of a fee to register the company.
- Get an EIN. An EIN (Employer Identification Number) is like a Social Security number for your business. You get it free from the IRS website. You’ll need it for taxes and if you want to hire employees.
Step 4: Get Business Licenses and Permits
Depending on the type of business you start, you may need licenses or permits. For example:
- A restaurant needs health permits.
- A contractor may need a contractor’s license.
- A daycare must meet state child-care rules.
Almost every business in Utah will also need a basic business license from the city or county where it operates. Each city has its own rules, so check with your local government.
Step 5: Set Up Your Finances
It’s important to keep your business money separate from your personal money. This helps with taxes, bookkeeping, and protecting yourself legally.
- Open a business bank account.
- Consider getting a business credit card.
- Keep records of income and expenses.
Many new business owners also talk to an accountant. An accountant can help you understand taxes, avoid mistakes, and even save money in the long run. Keep your business finances and your personal finances completely separate with records kept any time money enters or exits the company, otherwise you run the risk of being personally liable for any of the company’s liabilities.
Step 6: Protect Yourself with Contracts
If your business deals with customers, vendors, or partners, contracts are essential. A contract is simply a written agreement that lays out what everyone has agreed to.
For example:
- A landscaping company should have a contract with homeowners explaining the scope of work and payment.
- A business selling products online should have clear terms and conditions for buyers.
- Business partners should have a partnership agreement explaining how profits and responsibilities are shared.
Too often, new business owners skip contracts and rely on handshakes or casual emails. This can lead to serious problems down the road. A properly written contract protects you, makes expectations clear, and can save you from costly disputes.
Step 7: Understand Your Ongoing Duties
Starting your business is just the beginning. Once you’re up and running, there are ongoing responsibilities.
- File annual renewals. In Utah, businesses like LLCs and corporations must file an annual renewal with the Division of Corporations.
- Pay taxes. Depending on your structure, you may pay income tax, sales tax, or employee taxes.
- Keep records. Keep track of your finances and contracts.
Staying organized from the beginning makes running your business much easier.
Why Legal Help Matters
Starting a business may sound like something you can do all on your own, and in some ways you can. However, there are hidden pitfalls. Choosing the wrong structure, failing to get the right permits, or skipping contracts can put your personal assets and hard work at risk.
That’s where having an experienced business attorney can make a big difference. An attorney can:
- Help you choose the right business structure.
- Draft or review contracts.
- Guide you through registration and compliance.
- Protect your business from legal disputes before they happen.
Building Your Business with Walker Law Firm of Cache Valley
If you are ready to start your business in Utah, the Walker Law Firm of Cache Valley is here to help. Attorney Matthew A. Walker has years of experience helping individuals and families with business organization and governance, contracts, real estate matters, and more. We take pride in guiding new business owners through the process so they can focus on what matters most—building their dream.
Our firm provides personalized, practical advice in areas including:
- Business formation and contracts
- Estate planning to protect your business and family
- Real estate contracts and disputes
Don’t take unnecessary risks when starting your business. Let us help you lay a strong foundation so your business can grow with confidence.
Starting a business in Utah is exciting, and with the right planning and guidance, you can build something that lasts. If you’re ready to begin, reach out to the Walker Law Firm of Cache Valley today and let us help you take the first steps toward success.