If you’ve thought about starting a business, there are a handful of things that probably come to mind:
- What is the product / service you plan to offer?
- How do you plan to offer that product or service?
- Who is your ideal customer?
- Have you established your business correctly?
Above all of these considerations, by far the most important is setting up a business in the correct manner with regard to state and city requirements. Setting up a new business requires filing documents with your local government (i.e., the State of Utah’s Dept of Commerce), establishing the right kind of business (its legal entity) and obtaining a license.
Although these items are well known to entrepreneurs and those who have built businesses throughout their careers, they are lesser-known to those who are just starting out.
File Paperwork with Your County & State
Filing the proper documents ensures your business is above board and in good legal standing. This can save you a lot of headaches down the road if there are any questions about the legality of your business or if you run into any issues with government agencies.
Decide On the Right Entity
As part of filing establishment docs with the state, you’ll need to determine what type of business entity you are (e.g., LLC, sole proprietorship, corporation, etc.), which can be done by visiting the Utah Division of Corporations & Commercial Code.
- An LLC is the most common business entity in the U.S., as it offers limited personal liability protection and is easy to establish.
- A sole proprietorship is the simplest business entity and can be a good option if you’re a one-person operation.
- A corporation is a more complex business entity that may offer greater tax benefits, but also comes with more paperwork and compliance requirements.
Think about your business and its immediate future to choose the right entity. For example, if you plan to grow your business and hire employees right away, you might be better off as a corporation. It’s best to sit down with a Salt Lake City or Denver business attorney if you have any questions about this step.
Establish Your Business Structure
The next step is to establish your business structure, meaning how your business will be organized and operated. This includes everything from deciding on a name for your business to creating marketing materials.
You’ll want to make sure that your business name is available and not already being used by another company. You can do a quick search on the USPTO website to check for availability. Once you’ve chosen a name, you’ll need to register it with the state in which you’re doing business.
In Utah, you can register your business name through the state’s Division of Corporations & Commercial Code. You may register a legal business name and a doing business as (DBA) name.
Obtain the Proper License
Depending on the type of business you’re starting, you may need to obtain a license from the state or local government. This is usually required for businesses that offer certain types of products or services, such as food service, cosmetology, or financial services.
You can check with your local Chamber of Commerce or Small Business Development Center to see if your business requires a license.
The Bottom Line
Starting a new business can be a daunting task, but it doesn’t have to be. By taking care of the essentials – filing paperwork, establishing a business structure and obtaining any necessary licenses – you’ll be on your way to success. Be sure to visit the official website of the Utah Division of Corporations if you have any questions: https://corporations.utah.gov/.