How to Move an LLC to Utah

An out-of-state LLC can change its state of organization to Utah through statutory domestication. Utah domestication is a legal transaction that changes an LLC’s state of organization, the state whose law primarily governs the company. An out-of-state LLC, also called a foreign LLC, that domesticates to Utah becomes a Utah LLC governed by the Utah Revised Uniform Limited Liability Company Act (Utah Code §§ 48-3a-101 through 48-3a-1405).

The LLC is otherwise the same business entity before and after the domestication process. Whether the domestication can proceed also depends on the laws of the state the LLC is leaving. To find out whether your LLC qualifies and what the process involves, request a free analysis of your LLC move.

Some states use the name conversion for the legal procedure that changes an LLC’s state of organization, also called its domicile. In many of those states, a business can complete a conversion to change its domicile or to change its entity type. The same statutory process can accomplish either goal. Utah has two distinct procedures for LLCs.

A Utah domestication changes a company’s domicile only. A conversion changes a business from one entity form to another. For example, a Utah LLC can convert into a corporation, or a limited partnership can convert into a Utah LLC. This article deals with domestications that change an out-of-state LLC into a Utah LLC.

Why Business Owners Move LLCs to Utah

A Utah LLC domestication may make sense if a business owner moves to Utah or if the owners prefer to have Utah law govern the company. An owner might transfer an LLC to Utah for any of the following reasons:

• Lower taxes. Utah’s simple, flat-rate tax system and low rates typically earn the state a position in the top ten most business-friendly states for taxes. A Utah LLC domestication may therefore result in significant tax savings, especially for businesses moving from high-tax states like California. The LLC will avoid income taxes in the original state if the transfer to Utah severs the connection, or taxable nexus, between the company and the original state.
• Legal benefits. A domestication to Utah may be a good business decision if Utah’s business laws mesh well with the owners’ business goals. For example, an LLC may benefit from a Utah domestication if Utah law better matches how the owners want to define member relationships or if the company wants to take advantage of Utah’s series LLC laws.
• Owner convenience. Utah has one of the highest rates of population growth in the nation. A business owner who is one of Utah’s many new residents may want Utah law to govern the business. Having a business domiciled where the owner lives can simplify legal compliance and make communicating with state agencies more convenient.
• Decreased reporting requirements. A business that is domiciled in one state but has its principal office in another often must file annual reports in both states. A company that is headquartered in Utah but domiciled in another state may reduce its reporting burden by domesticating to Utah. The annual report fee in Utah is only $23.00, so focusing on Utah may also allow the business to save on reporting fees.
• Easier professional hiring. Business professionals like accountants and attorneys who live in Utah are more likely to specialize in Utah law. Domestication of an out-of-state LLC to Utah may therefore make it easier for a Utah-based business owner to hire qualified professionals. Working with professionals from the same community can also enable long-term professional relationships and furnish more opportunities for networking.

Utah LLC Domestication Requirements

Utah LLC domestication under Utah Code § 48-3a-1051(2) is not available for every out-of-state LLC. An LLC domesticating to Utah must comply with both Utah law and the current state’s law. Utah law controls the process and documents filed in Utah and determines the domestication’s legal effects.

The current state’s law governs whether the LLC can domesticate to Utah (the state must authorize domestication), the content of the written plan of domestication if required, the standard under which the LLC’s members or managers must approve the plan of domestication, and the effective date for the domestication.

Eligibility for Utah LLC Domestication

An LLC considering domestication to Utah must confirm that it is eligible for the process. The principal requirement is that the current state must authorize LLC domestications. Not all states do. The current state may call the process domestication, conversion, or another name. The important part is that the state must have a statutory procedure that lets an LLC organized in that state change its domicile to a new state.

Business owners must also review the LLC’s articles of organization and operating agreement to ensure there are no provisions that prevent domestication to a new state. If any restrictions are present, the LLC may need to formally amend the documents to allow the procedure.

An out-of-state LLC must also confirm that Utah lets LLCs engage in the company’s field of business. Utah allows LLCs to have any lawful purpose. However, certain types of companies are subject to extra requirements. For example, a low-profit LLC (known as an L3C in other states) must have “L3C” in its name and must have a purpose that is charitable or educational, and not profit-oriented, political, or legislative.

Professional services companies, also called professional limited liability companies (or PLLCs) in other states, also have additional requirements. A professional services company is an LLC that offers to the public certain professional services that require a license, such as public accounting, architecture, law, dentistry, and professional engineering.

A domesticating LLC that will be a Utah professional services company must have the required licenses and must meet the following requirements: the company’s certificate of organization must describe the professional services it offers; the company must provide only one professional service and ancillary services; and the company must provide professional services only through licensed professionals.

Required Documents for Utah LLC Domestication

The Utah LLC domestication process involves preparing and adopting several domestication documents that must satisfy both states’ requirements. The domestication documents memorialize the terms of the domestication and control the company when the domestication takes effect.

• Plan of Domestication. A Plan of Domestication designed to comply with the requirements of both Utah law and the law of the state that the LLC is moving from.
• Statement of Domestication. The Utah Statement of Domestication for filing with the Division of Corporations of the Utah Department of Commerce. Under Utah Code § 48-3a-1055(2), the statement must contain information required by the statute.
• Certificate of Organization. The Utah Certificate of Organization, filed with the Statement of Domestication. Per Utah Code § 48-3a-102(1), the Certificate of Organization establishes the LLC as a Utah domestic entity and must be signed by an authorized person.
• Domestication Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, statement of conversion, or a similar term.
• Utah Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as a Utah LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Domestication. A resolution approving the transaction and adopting the Utah organizational documents as the LLC’s governing documents.

The Statement of Domestication and Certificate of Organization accept electronic signatures under Utah law. Filing through the Utah Department of Commerce allows e-filing for electronically signed documents.

The LLC also completes several administrative tasks to implement the domestication.

• conducting a preliminary name search with the Division of Corporations to determine whether the LLC’s name is available in Utah (if the name is unavailable
• a slight name change may be required); obtaining signatures on the Statement of Domestication and Certificate of Organization; filing both documents with the Utah Department of Commerce;
• filing domestication documents with the Secretary of State or equivalent agency for the state that the LLC is moving from

Cost of Moving an LLC to Utah

The cost of moving an LLC to Utah depends on the scope of work described above. The documents and filings require professional preparation to comply with both states’ requirements, and coordinating submissions with two separate state agencies adds further complexity. Professional service costs and state agency coordination are the primary cost drivers. To find out what your specific move will cost, request a free analysis of your LLC move.

In addition to professional service costs, the Utah Department of Commerce charges a $17.00 filing fee for the Statement of Domestication. There is ordinarily a $54.00 filing fee when submitting an LLC’s Certificate of Organization, but the Department of Commerce waives the fee when the Certificate of Organization is submitted as an attachment to the Statement of Domestication.

The LLC’s current state will also charge a filing fee for the state’s equivalent of the Statement of Domestication. The fee amount depends on the state where the LLC is currently organized.

An out-of-state LLC that domesticates to Utah will also incur labor costs and, if applicable, registered agent fees. Labor costs are the amounts charged by the service provider the LLC retains to manage the Utah domestication.

Service providers may charge a flat fee or charge by the hour, with fee amounts varying by provider. Work that goes into a domestication includes obtaining and organizing information, drafting the domestication documents, communicating with the business owners and state agencies (the Department of Commerce in Utah), and filing domestication documents with state agencies.

Every Utah LLC must designate a registered agent with authority to accept service of legal documents and other important communications for the LLC. A member or manager of the company can serve as registered agent. However, Utah LLCs often choose to hire commercial registered agents. A commercial registered agent is an individual or entity that serves as one or more businesses’ registered agent in return for an annual fee.

Commercial registered agents must list with the Division of Corporations their contact information and status as commercial agents. Hiring a commercial registered agent can be a worthwhile expense for an LLC. They help to keep important communications organized and also allow the LLC to avoid publishing a member’s, manager’s, or officer’s name and address.

Processing Time for Utah LLC Domestication Filings

A Utah LLC domestication proceeds in several steps. The length of the process depends on how long each step takes.

Each step depends on the responsible person’s turnaround time: the business owners’ time to organize the necessary information, the service provider’s time to review the information and prepare the domestication documents, the owners’ time to approve and sign the draft documents (or request revisions), the service provider’s time to file the final domestication documents with state agencies, and the state agencies’ time to accept and process the filed documents.

The Utah domestication process usually takes less time to complete than other methods of officially moving a business. The domestication becomes effective on the date and at the time the Statement of Domestication is filed by the Utah Department of Commerce, unless the statement specifies a later effective date.

The Utah Division of Corporations offers expedited processing (within two business days) for an additional fee of $75.00. For a detailed breakdown of each phase in the domestication timeline, see our guide to how to move an LLC through the domestication process.

Legal Effect and Benefits of Utah LLC Domestication

Utah LLC domestication moves an out-of-state LLC to Utah. The company otherwise continues its existence as the same entity with the same date of formation. The company expends substantially less time and money on administrative matters compared to other methods for changing a business’s state of domicile. Domestication is designed to let an out-of-state LLC move to Utah with no disruption to its day-to-day operations. Utah law declares that the legal effects of a domestication to Utah are as follows:

• Company identity remains the same. The LLC remains the same company throughout the domestication, and there is no pause or interruption in its existence. An out-of-state LLC that domesticates to Utah is still the same entity, just governed by Utah law. It can continue using the same Employer Identification Number (EIN) and is still the same taxpayer with the same filing history. The consistent identity helps to avoid administrative mistakes and extra legwork for the company.
• Governing law. After domestication, the LLC is a Utah LLC and is primarily governed by the Utah Revised Uniform Limited Liability Company Act. If the out-of-state LLC before domestication had authority to do business in Utah as a foreign LLC, the authority to do business as a foreign LLC becomes moot and is automatically revoked when the company becomes a Utah LLC. The company’s new Utah certificate of organization and operating agreement take effect and control the company’s internal affairs.
• Day-to-day operations continue as normal. An LLC does not have to stop doing business during the domestication process. Domestication occurs behind the scenes and need not affect the public-facing part of the business.
• Same bank accounts and financial relationships. An out-of-state LLC that domesticates to Utah owns all the same assets, including financial accounts. The company can continue using the same bank accounts and maintain its existing relationships with lenders. There is no need to close bank accounts and open new ones.
• Contracts and employment remain effective. The domestication process has no effect on the LLC’s business agreements. Contractual relationships stay in place, and the Utah LLC has all the same contractual rights and duties, with no need to sign new agreements. Employment relationships are also unaffected, so the company’s employees are still employed by the same employer, and there is no break in the relationship.
• Company property remains unchanged. The Utah LLC still owns all the same property that the out-of-state LLC owned before domestication. There is no need to sign deeds or transfer assets, and the domestication in no way limits or restricts the LLC’s property rights. All the out-of-state LLC’s debts, obligations, or other liabilities from before domestication are owed by the Utah LLC after domestication. Domestication does not change any liability that a member or manager has (or does not have) for the LLC’s obligations.
• Legal cases continue uninterrupted. Legal actions and administrative proceedings pending prior to domestication move forward as planned and are not affected by the domestication. If the domestication results in a name change, the Utah LLC’s new name is substituted for the out-of-state LLC’s name.
• Ownership interests are converted. Members’ interests in the out-of-state LLC are converted under the terms agreed in the plan of domestication. That typically means that interests in the out-of-state LLC become interests in the Utah LLC, but the members can also agree to convert interests into money, property, debt, securities, or a right to acquire interests later.
• No dissolution is required. Domestication is not considered a dissolution of the LLC, and there is no need for the company to wind up its affairs. The completed domestication does not trigger any rights that kick in if the company dissolves, liquidates, or winds up affairs, unless the LLC’s operating agreement or the current state’s law expressly says otherwise. Registration as a foreign LLC in the business’s original state is not an essential part of the domestication process. The company can register as a foreign LLC if it will continue doing business in the original state, but it is not required.

Moving an LLC Out of Utah

Utah permits outbound LLC domestication under Utah Code § 48-3a-1051(1). A Utah LLC can domesticate to another state’s jurisdiction, provided that the destination state also authorizes the procedure.

Utah Outbound Domestication Requirements

A Utah LLC that domesticates to another state must file a Statement of Domestication with the Utah Department of Commerce. The outbound filing must include a plan of domestication approved by the LLC’s members or managers in accordance with Utah Code § 48-3a-1052(1). Utah does not require a separate certificate of surrender. The Statement of Domestication completes the Utah side of the transaction. The destination state will require its own formation and domestication (or conversion) documents.

Filing Fees for Moving an LLC from Utah

The Utah Department of Commerce charges a filing fee of $17.00 for an outbound Statement of Domestication. The destination state will charge separate filing fees for its formation and domestication documents.

Utah LLC Laws That Apply After the Move

The Utah Revised Uniform Limited Liability Company Act (Utah Code §§ 48-3a-101 through 48-3a-1405) imposes ongoing requirements on all domestic LLCs, including those formed through domestication from another state. An LLC that domesticates to Utah becomes subject to these obligations immediately upon effectiveness of the domestication.

Utah Annual Report and Compliance Requirements

Utah requires domestic LLCs to file an Annual Report with the Utah Department of Commerce. The filing must be completed by the LLC’s anniversary date. The filing fee is $23.00 per year. This reporting requirement applies to all Utah LLCs, including those formed through domestication from another state. An LLC that domesticates to Utah and no longer has to file in the original state will avoid the time and expense of annual filings in multiple jurisdictions.

Utah LLC Operating Agreement Requirements

Utah refers to an LLC’s internal governance document as an “Operating Agreement” under Utah Code § 48-3a-102(1)(16). The Operating Agreement governs the LLC’s internal affairs, including the rights and obligations of members and managers, profit distributions, and management structure. The Operating Agreement is not filed with the state; it is maintained by the LLC as a private document.

Utah LLC Member and Manager Protections

Utah law provides important protections for LLC members and managers. These protections are codified in the Utah Revised Uniform Limited Liability Company Act. Utah law recognizes charging orders as a remedy for judgment creditors seeking to collect judgments against members. Fiduciary duties are imposed on members and managers under Utah Code §§ 48-3a-409(2) and 48-3a-409(3). These duties can be modified or eliminated (within limits) through the LLC’s operating agreement.

Alternatives to Utah LLC Domestication

When domestication is not available because the other state’s law does not authorize it, a merger-based reorganization achieves the same result. The reorganization involves forming a new Utah LLC and merging the out-of-state LLC into it, with the Utah LLC as the surviving entity.

The surviving LLC succeeds to all property, contracts, and obligations of the original LLC by operation of law. Understanding the full domestication process, including document preparation and coordination between both states, is covered in detail in our guide to LLC domestication. For a state-by-state comparison of LLC domestication and conversion laws across all states, see our guide to LLC domestication by state.