Effective as of March 23, 2009, the Utah Low Profit Limited Liability Companies Act authorizes the formation of L3Cs. Here is an outline of the steps you need to follow in order to form an L3C in Utah. The process is very similar to the one for forming an LLC. You should also read the general section on forming an L3C for information that is applicable in any state.
1. Choose a business name for the L3C and check for availability.
- Please see our section on choosing and checking the availability of a name for your small business, as well as our section on the trademark law aspects of choosing a name.
- Utah requires an L3C name to contain the abbreviation "L3C." Additionally, your business name may not be the same as, or deceptively similar to, that of any other Utah business entity or any foreign business entity registered in the state.
- You may want to reserve a name to protect it for 120 days prior to the organization of the company for a fee of $20.
- Although you are not required to do so, consider registering your business name as a federal and/or state trademark.
2. Prepare and file articles of organization with the Utah Department of Commerce, Division of Corporations and Commercial Code.
- The filing fee is $70. The Division of Corporations and Commercial Code's website has a simple, fill-in-the-blank form for drafting your articles of organization along with a set of general guidelines. You only need to put the actual business purpose of your L3C in Article 2 of the form without explicitly tracking the provisions of Regs. Sec. 53.4944-3(a). For general information on articles of organization, see the section on forming an L3C and the Articles of Organization section of this Guide.
- If you are converting an existing LLC to an L3C, you must file a simple, fill-in-the-blank form for drafting your articles of amendment to the original articles of organization. Be sure to include "L3C" in the new entity's name and specify that the new entity is a Low-Profit Limited Liability Company in the section "The articles of organization are amended as follows." You only need to put the actual business purpose of your L3C in the section "The articles of organization are amended as follows," without explicitly tracking the provisions of Regs. Sec. 53.4944-3(a). The articles of amendment filing fee is $37.
3. Negotiate and execute an operating agreement.
- Utah does not require an operating agreement in order to form an L3C, but executing one is highly advisable. Please see the section on forming an L3C in this Guide for details. The operating agreement does not need to be filed with the state.
4. File an annual report with the Division of Corporations and Commercial Code.
- An L3C needs to file an annual report during the month when it was formed or authorized to do business in Utah. The Division of Corporations and Commercial Code website has a simple, fill-in-the-blank form for drafting your annual report. The filing fee is $10.
5. Obtain any required local licenses.
- See the general section on forming a LLC for details.
6. Determine what tax and other regulatory obligations the L3C has, and take care of any necessary registrations.
- Consult with an attorney to ensure that the L3C is fulfilling its tax obligations and the necessary tax and registration paperwork is properly filed. For general information on the tax treatment of L3Cs, see the L3C section of this guide.
7. Open a bank account for your business.
- It is a good idea to keep your business's finances separate from your personal accounts. You may want to do this early on by opening a bank account for your business.