What to Consider Before Halting Your Utah LLC

Business operations can be put on hold for a number of reasons: family emergency, economic health, personal reasons… a global pandemic. But if you’re certain you’ll be coming back to your Utah LLC after a period of inactivity, there are some important points to consider so you can avoid steep fees and/or roadblocks later on.

How do I put my Utah LLC on pause?

If you plan to step away from your business for a short time, you might actually want to keep it active (or “in good standing”) with the state. This will require paying annual taxes and fees, including Utah’s Annual Renewal, which involves filing a document and paying $20.

Can I just… do nothing?

No! Well, you can, but it might not be very beneficial in the long run. If your business is registered with the state, you’ll be expected to pay associated annual taxes and fees—even if your LLC is completely inoperable. If you can’t foresee starting-up any time in the near future, or if you just don’t want to keep paying annual fees for a dormant business, you might want to consider Dissolving your Utah LLC. (But don’t jump to dissolution before weighing your options!)

Why not just dissolve my UT LLC and start over later?

This is a possibility, and may be a good option if you expect to take an extended break before getting back to business, or if you plan to change your business at all. BUT, if you’re just taking a short break from your LLC, dissolution may be more trouble than it’s worth:

• You may lose your business accounts with suppliers or distributors, which can affect your business relationships later on.
• Your business name will go back on the open market 120 days after dissolution and you might not be able to use it again.
• If you form a new LLC, you’d have to pay start-up costs all over again. (The Utah Certificate of Organization costs $70 to file with the state.)

Will I still have to pay for a Utah business license?

Many companies that “do business” (i.e. sell goods or services) in Utah are required to obtain a Business License from their local municipality (see Utah’s Local Municipality Contact Information page). Fees and requirements vary according to municipality, so it’s best to check in with your local office to see what might be expected of you if you stop doing business for a period of time. (Note that any change to your business—whether a new address, owner, or name—will need to be updated with your local office, as well.)