It takes several steps to start a Limited Liability Company (LLC). Before you can start operating in Utah, there are other permissions you might have to obtain first, depending on the nature of your business. If you plan to sell goods or provide risky services, the first thing you will need to do is identify which of these will require a business license based on federal, state, or local laws.
A business license is essentially a permission slip from the government that allows your company to perform certain operations. If you choose to form an LLC, you will create a new entity with many of the same rights and responsibilities that a person has. That includes the duty to investigate what activities require approval, and the documentation proving you have met those standards allowing you to operate legally. A driver’s license is very similar. You, an individual, must demonstrate a level of competency and pay certain fees before the state government grants you the right to drive. Every type of business entity, whether it’s a corporation or an LLC, will have to ensure that they have all the permissions they need before they are allowed to work.
The purpose of a business license is to help protect the public from common or hazardous malpractice issues. Citizens expect a certain level of quality from stores, restaurants, or hospitals, because in these areas when negligence is obvious, people might become skeptical of the services they provide, and rightfully so. Since a lot of businesses operate behind closed doors or walls, what assurance do customers have that they are up to code? A business license helps to provide a minimum guarantee of quality control.
Requirements can change depending on your location of operations or the range of effect. If your product typically extends across state lines, it might require a federal license. Selling goods and services will require you to obtain some kind of seller’s permit, and local cities might have regulations on top of all of that. You can call your local and state government offices to discover which licenses your business may need.
A business license in Utah can be obtained either online or through mail with the appropriate regulatory agency. License requirements are based on the location and activity of the company. Contact your mayor’s office, county administrator, or Utah’s secretary of state, in order to find out the zoning requirements in your area.
You will first need to establish a business entity in Utah. Whether it’s an LLC or a corporation, this will allow you to gather information on what your company does, and where you will need permissions to operate. If you use our service to start a company , we can help you figure out what business licenses you will need.
The most efficient way to figure out required licenses is to contact local government offices. An alternative method is to check for online resources. Salt Lake City, for example, has a city business license requirement which can be obtained on their website.Investigate the countyyou intend to operate in, or contact a business lawyer who can help guide you through understanding which licenses you will need and why.
If your company offers property or services subject to sales tax, then you will need to obtain a seller’s permit, which is the common name for Utah’s sales tax registration. You can easily register for one on Utah’s One Stop Business Registration website. Once obtained, the seller’s permit does not need to be renewed. Other business licenses may need to be updated later, depending on the county laws.
Nationwide business licenses only apply to certain industries. If you’re performing within a single state, there is no catch-all seller’s permit that applies to every state. If you’re providing a service that is regulated by the federal government, then you will need to apply for the appropriate permit. These might include:
Every business structure has an assumed tax treatment automatically. LLCs generally default to pass-through taxation, meaning the responsibility to cover taxes on profits falls to the owners or members. Corporations usually have to pay taxes on earnings, which is then double-taxed as shareholders pay taxes on the dividends paid to them. Either business entity can elect to handle taxes differently by filling out a Form 8832 with the federal government.
Depending on the complexity or amount of risk involved, a business license cost can vary greatly. An average cost is somewhere between $50 and a few hundred dollars, based on processing or recurring fees. There might also be some renewal costs involved, so it’s a good idea to inquire when investigating for licenses on how much they can cost.
Contacting your local or state government will help you figure out what kind of licenses you’ll need. They come in many varieties and it will take some research to know which ones apply to your business. You might need these kinds of licenses, depending on the nature of your company:
Failing to acquire the correct licenses can impose fines on your LLC and ultimately lead to your business expiring. It’s important to set dates to ensure that required licenses are renewed when appropriate. Having a reliable registered agent can help you keep track of when to update your licenses.
The less risky your business practices are, the less likely you are to be required to have a license in order to function. It all depends on the nature of your company. What’s important to know is that an LLC and a business license are separate things, and when you form a company, you need to make sure that you have what you need to operate legally.