If you are thinking of starting a new business or moving an established one to Utah, it is important to consider what type of business structure fits your needs the best.
You must have the state's permission to create a corporation. It becomes a legal entity on its own. In order to gain the state's permission, you need to have Articles of Incorporation written. A board of directors is traditionally named to handle the affairs of the business while a corporation may also have shareholders.
Limited Liability Corporations
Owners of a limited liability corporation generally receive protection from the debts of the company. Yet, in many cases, they have more flexibility to run the business as they desire than a corporation. In order to get started, a limited liability corporation must file a Certificate of Organization. There are very specific laws that apply to recordkeeping for a limited liability corporation in Utah.
A general partnership can be created when two or more people choose to operate a business together. Each person shares a responsibility for making the business succeed. If it fails, then the debts of the business are divided evenly. Each partner must claim an equal share of the profits or losses on their personal income tax because the partnership files no income taxes on its own. At the same time, the partnership must file accounting records with state and federal authorities.
In a limited partnership, one or more people are responsible for the daily operations of the business and assumes all the risk. The limited partner gives financial help, but they are not held personally responsible for any debts assumed by the business. In order to form a limited partnership, the general partner must file paperwork in accordance with the Utah Division of Corporations and Commercial Code.
It can be very confusing to choose the type of company that is right for your situation. That is why your first step should be to consult with a knowledgeable business Utah attorneys like Spencer & Jensen. Putting their experience to work for you helps ensure that you do not run into any legal problems when you are just getting started.