Primary Practice Contact: Steven W. Beckstrom
Utah business formation lawyer – Get your company off to the right start!
We help new business owners choose the legal entity form that best meets their needs
Common forms of business entities include corporations (C corporations and S corporations), limited liability companies, general partnerships, limited partnerships, limited liability partnerships, and sole proprietorships.
The form a business takes is one of the more important decisions faced by a business owner or founder. It affects many options and decisions going forward.
The ability to sell ownership interest in a business, the ability to raise capital, the relationship between co-owners, and liability for tax or legal problems all depend upon the choice of entity.
As a business formation law firm, we help clients form legal entities for a wide range of businesses, including retail, software, professional services, real estate, and many other matters. We provide counsel to business owners about the various Utah entity choices that are available, and what needs to be undertaken for formation.
We additionally assist business owners with matters after the initial formation, including issuing shares or subscriptions for entity interests, drafting bylaws and operating agreements, transferring assets to the new entity, and other registration matters.
Common Legal Form Considerations
There are advantages and disadvantages to each form. In advising our clients on the choice of entity, we help clients carefully consider many factors, including:
- Tax and tort liability issues;
- Cost of maintenance of the entity;
- Protection of intellectual property (often overlooked);
- Size and complexity of the entity; and
- Regulatory requirements placed on the proposed business activity by local, state or federal government.
Utah Corporation Formation Lawyers – How Are New Corporations Formed?
In Utah, corporations are formed by filing articles of incorporation with the Utah Division of Corporations. Once these articles are approved, the corporation is legally established.
What Information Must be Included in the Articles of Incorporation for a Utah Corporation?
In Utah, the articles of incorporation must include:
The corporate name (must contain the word or abbreviation of the word “Corporation,” “Company,” or “Incorporated”).
The purpose or purposes for which the corporation is formed.
The number of shares the corporation is authorized to issue. If more than one class of shares is authorized, each class must be designated along with a description of the preferences, limitations, and relative rights of each class.
The name and address of each of the incorporators (one or more persons may act as incorporators).
The Utah street address of the corporation’s initial registered office and the name of its initial registered agent at such address.
The signature of each of the incorporators.
The Articles of Incorporation may also include additional information relating to the rights of shareholders, so long as such rights do not otherwise violate Utah law.
Utah Limited Liability Company Lawyers for LLC Formation
In addition to forming corporations, we also assist business owners in forming Utah limited liability companies. In Utah, LLCs are formed through preparing and filing a Certificate of Organization with the Utah Division of Corporations. Like Articles of Incorporation, the Certificate of Organization must contain certain information, such as the name of the company, the principal address of the company, the name of the organizer, and information about the company’s statutory agent.
Should I Form a Corporation or LLC?
A frequent question asked by new business owners is whether they should form a corporation (such as a subchapter S corporation) or a limited liability company. In choosing between a subchapter S corporation or a limited liability company, there will be ownership, tax, business, asset, and other considerations that will need to be taken into account. We work with business owners in reviewing these considerations as well as the advantages and disadvantages of each business structure so they can choose the best business form for their company.
What is a Subchapter S Corporation?
A subchapter S corporation is the same as a “regular” corporation (often referred to as a “c” corporation) except for tax purposes. Regular (or non-subchapter S) corporations are taxed at the corporate level, and shareholders are then taxed on dividends paid to them.
Conversely, subchapter S corporations are not taxed at the corporate level. Instead, the shareholders are taxed on the company’s profits based upon their percentage ownership of the company. Subchapter S corporations are often referred to as “pass-through” entities because the tax liability for the profits of the company is “passed through” to the shareholders.
Subchapter S corporations have certain requirements that must be met in order to get the subchapter S taxation benefits. We work with clients to determine whether a subchapter S corporation may be advantageous; and if it is, we help them make the appropriate election and file the required documentation.
Can an LLC be Taxed as a Subchapter S Corporation?
Yes. LLC’s also have the option to be taxed as a subchapter S corporation, so long as the ownership and other tax requirements are met.
Let us help you get your business off to the right start
Our business formation attorneys are ready to help. For more information please contact Steven W. Beckstrom or another member of our team.
