How to set up an LLC for your rental property in Utah

If you’re a landlord or real estate investor in Utah, you might be wondering if setting up an LLC for your rental property is the right move. Many Utah property owners use LLCs to separate their personal assets from their rental business, potentially reducing risk and simplifying management. In this guide, we’ll walk you through how to set up an LLC for a rental property in Utah, covering everything from costs and paperwork to ongoing compliance and insurance options.

What is an LLC and what does it protect you from as a landlord?

An LLC, or limited liability company, is a business structure that blends the flexibility of a partnership with the liability protection of a corporation. For landlords, this structure may help shield your personal assets—like your home or savings—if your rental property faces lawsuits or debts.

However, keep in mind an LLC doesn’t offer complete protection. For example, it won’t shield you from liabilities resulting from your own negligence or illegal acts. It also doesn’t replace the need for proper insurance coverage. If you want a deeper dive into what an LLC can do for landlords, check out our comprehensive article on LLCs for rental properties and landlords.

Step-by-step: how to set up an LLC for a rental property in Utah

You may want to consider the following steps when setting up an LLC in Utah. It’s always a good idea to consult a qualified attorney or professional for personalized advice.

1. Choose a name for your LLC

Utah requires your LLC’s name to be unique and include “Limited Liability Company” or an abbreviation like “LLC” or “L.L.C.” You can check name availability on the Utah Secretary of State’s business search page.

2. Appoint a registered agent

Utah mandates that your LLC has a registered agent with a physical address in Utah who can receive official documents on behalf of the LLC.

3. Prepare and file articles of organization

The articles of organization formally create your LLC. In Utah, you can file these online through the Utah OneStop Business Registration portal. We’ll explain more about articles of organization below.

4. Create an operating agreement

While Utah does not require an operating agreement, it’s highly recommended to outline ownership percentages, management duties, and other rules. This is especially important if you have partners.

5. Get an EIN from the IRS

Many LLCs require an Employer Identification Number (EIN) for opening bank accounts and filing taxes. We’ll cover how to get an EIN later on.

6. Register for state taxes if needed

If your LLC will have employees or sell goods, you may need to register for state tax permits.

How much does it cost to set up an LLC in Utah?

One of the first questions landlords ask is, “how much does it cost to set up an LLC?” In Utah, the key fees include:

• LLC filing fee: $59 (this is the fee to file your articles of organization)
• Annual renewal fee: $18 (Utah requires LLCs to file an annual report and pay this fee)
• Registered agent fees: If you use a professional registered agent service, expect $100-$300/year, though you can act as your own agent if you have a Utah address.
• Miscellaneous costs: Operating agreement templates, EIN application (free if you apply directly with the IRS), and possibly business licenses.

Compared to other states, Utah’s fees are fairly reasonable. For the most current fees, always check the Utah Secretary of State's fee schedule.

How long does it take to set up an LLC in Utah?

Processing times are generally 1-3 business days if you file online with Utah’s Secretary of State. Paper filings may take longer, around 5-7 business days. Once approved, you’ll receive your official LLC certificate.

Planning ahead is smart, especially if you’re buying a property under the LLC’s name and want everything lined up before closing.

What are articles of organization and how to file them in Utah?

The articles of organization are the foundational document that officially registers your LLC with Utah’s state government. They include basic information like:

• LLC name
• Registered agent name and address
• Principal office address
• Duration (usually perpetual)
• Organizer’s name and signature

Filing is done online at the Utah OneStop Business Registration. The process is user-friendly, and you’ll pay the $70 filing fee at submission. Generally, once the articles are approved, your LLC legally exists. It’s a good idea to confirm this with a legal professional.

Do I need a lawyer to start an LLC, or can I do it myself?

Many landlords wonder, “do I need a lawyer to start an LLC?” You may not need to hire a lawyer to form an LLC in Utah, as the state’s online system makes it easy to file your own articles of organization.

However, if your rental business has multiple owners, complex arrangements, or you want tailored operating agreements, consulting a lawyer can be very helpful. A professional can also help you navigate tax implications and asset protection strategies.

If you’re comfortable with a DIY approach, just be sure to carefully follow Utah’s LLC requirements and keep thorough records.

How to get an EIN for an LLC that owns rental property

Once your LLC is formed, you’ll likely need an Employer Identification Number (EIN) from the IRS. This is basically a Social Security number for your business and is often required to open bank accounts, hire employees, and file taxes.

Generally, obtaining an EIN is free and can be done online through the IRS website at irs.gov. You’ll need your LLC’s formation details handy during the application.

Note: Even if your LLC has no employees, having an EIN is often recommended to keep your personal and business finances separate. Consider consulting a tax professional if you have questions.

Do LLCs need annual reports and other ongoing compliance in Utah?

Yes, Utah requires LLCs to file an annual report each year. The annual report keeps your LLC in good standing and costs $20 to file. You can submit it online via the Utah OneStop portal.

Missing this filing or payment may result in administrative dissolution, potentially affecting liability protections until you reinstate it. It’s advisable to consult official sources or legal counsel for guidance.

Additionally, make sure to keep up with any local business licenses or permits required for managing rental properties in your city or county.

S corp vs LLC for landlords: a quick overview

Some landlords hear about S corporations and wonder how they compare to LLCs. Here’s a high-level look. Please note these are general observations and not tax advice:

• LLC: Offers flexible management, simple formation, and liability protection. By default, treated as a pass-through entity for taxes.
• S corp: A tax election that LLCs or corporations can make that may potentially reduce self-employment taxes. Comes with stricter rules on ownership and management.

Choosing between an S corp and LLC depends on your specific financial situation and goals. Remember, this is not tax advice — always consult a tax professional before making decisions.

LLC vs umbrella insurance for rental property risk management

While an LLC provides legal protection by separating your personal assets from your rental business, it doesn’t replace insurance. Many landlords pair their LLC with landlord insurance and sometimes umbrella insurance for extra coverage.

Umbrella insurance can cover liabilities that exceed your landlord insurance or LLC protections. For a detailed look at this, check out our article on LLC vs umbrella insurance.

Also, be sure to review your options for landlord insurance in Utah to ensure your property and business are well protected.

When does it make sense for Utah landlords to use an LLC?

Some landlords find an LLC useful if:

• You want to limit personal liability from tenant lawsuits or property-related claims.
• You own multiple properties and want to separate each asset legally.
• You plan to bring in partners or investors.
• You prefer the business structure and flexibility LLCs offer.

On the other hand, if you own a single property and prefer simplicity, the cost and paperwork of an LLC might outweigh the benefits. Also, remember that LLCs don’t protect you from everything, so combining an LLC with good insurance is key.

Final thoughts

Many consider setting up an LLC a useful step toward protecting your personal assets and managing your investment more professionally. The process is affordable and relatively quick if you follow Utah’s requirements and use the state’s online resources.

Taking these steps may help you grow your Utah rental business with confidence and peace of mind.