Under Utah law, a business may incorporate. If it chooses to do so, it is thereafter identified as its own legal entity. An incorporated business acts in its own name, whether buying and selling property, agreeing to contracts or exercising legal rights. The Utah Secretary of State receives and processes applications for incorporation, which must be submitted in compliance with local guidelines.
Benefits of Incorporation in Utah
There are distinct advantages to incorporating a business. Most importantly, liabilities the business accrues may be satisfied only by assets that the owners have specifically invested in it. Had the business instead remained a collection of the owners' personal assets, the personal property of the stakeholders could be liquidated to pay the liabilities of the business, if it runs into financial issues. Also, creditors in the Lehi area typically prefer to deal with corporations, since a loan is an investment more easily evaluated when the credit-worthiness of various owners is not an issue. Lastly, ownership of a corporation is divided into equal portions or "shares" of stock, which may be bought and sold much more easily than the ownership of an unincorporated business.
Costs of Incorporation
Incorporation comes at a price. First, Utah might charge a filing fee to process applications for incorporation. Also, the corporation will pay taxes as its own entity. The incomes of owners as individuals are also taxed of course, meaning that income to the corporation might be subject to double taxation. However, this disadvantage can be avoided with proper planning and help from a local Lehi lawyer.