Starting your own business can be a daunting process. For many entrepreneurs who have passion and expertise for what they do, navigating the legal and financial landscapes of business creation and ownership can feel rather new and unfamiliar. If you’ve spent time honing skills and now you would like to start a business around these skills, you’ll quickly realize that there may be a steep learning curve when it comes to ownership. Below we’ll describe the steps you need to take to make sure you start your business correctly in Utah.
What Type of Business Do You want to Start?
Whether you’re in Salt Lake City or a surrounding area, business creation will look the same throughout the state. You’ll want to talk to an attorney about exactly how you want to organize your business, but the most common ways include sole proprietorship, a single-member limited liability corporation (LLC), a partnership, or a traditional corporation (such as a C-corp or an S-corp). Talking with your attorney can give you the best idea of what kind of business you should start, and you can always change the structure later. The Utah Department of Commerce, Division of Corporations and Commercial Code handles all business registrations. They are located in Salt Lake City. Just understand that there are different tax implications for different business formations.
What Do You Want to Name Your Business?
To register your business, you’ll need to have a name that is unique to Utah. You can go to the Division of Corporations and Commercial Code website to check that your name is unique. Once you have settled on a name, it’s also a good idea to check to see if you can purchase a domain name that is the same or similar to your business name. Nowadays, most businesses will want to have a web presence as well as a physical location, while some businesses operate strictly online. For marketing purposes, you’ll want to make sure you can get social media addresses that also match your business name. This will help your customers find you across the web.
Registering Your Name and Obtaining Proper Licenses
Once you have a name in mind and know how you want to structure your business, you’ll want to make sure you secure all necessary licenses and permits before you register your name with the Division of Corporations and Commercial Code. Once again, discuss legalities with an attorney. You’ll need to search to see if you need any special licenses or permits to run your business in the state of Utah. Certain industries require special occupational licenses and/or permits. If you have a physical presence, you’ll need occupancy permits. You’ll need to check in your area for requirements on obtaining a business license as well, as registering your business does not license you to conduct business in your county.
If you’re selling any goods, you’ll need to obtain a sales tax license. For tax purposes, you’ll need an Employer Identification Number or EIN, which will be used in lieu of your social security number when filing business taxes. Discuss tax information with your accountant to make sure you are balancing your books and reporting income and expenses correctly. Small business accounting can get you into trouble if not done correctly.
When you have a brick-and-mortar location, small business setup may mean that you have to check that your business is zoned correctly. Depending on your location, you may or may not be able to conduct your specific business. You’ll want to check with your municipal zoning commission before proceeding with purchasing or leasing land or a business location.
Insurance and Taxes
One of the primary reasons you’ll want to form an LLC or a corporation is to limit your liability. You’ll also want to consider purchasing liability insurance. There are specialty insurances as well, such as cyber insurance, that are more and more necessary today due to the risk of data breaches. You can be liable if your customers’ have their identities stolen.
Similarly, you want to make sure that you are paying your taxes correctly. Each business is different, and the only way to know for sure that you’re filing correctly is to discuss your small business accounting with a certified accountant. Having an attorney and an accountant in Salt Lake City is essential to any business, large or small.
Small business setup takes time and expertise. It’s recommended you have a solid financial plan before pursuing a business. It’s also recommended you confer with experts before taking your first step. The more you know, the better off you will fare on your new adventure.