If you own a business in Utah—whether it’s an LLC you set up in Salt Lake City or a sole proprietorship out in Logan—there may come a time when you need to shut things down officially. This guide answers the ten most common questions Utahns have about dissolving LLCs or closing sole proprietorships under current Utah law.
Yes. Under Utah Code § 48-3a-702, Utah LLCs must file Articles of Dissolution with the Division of Corporations. Simply stopping business or not renewing the registration doesn’t formally close the company. Failing to dissolve properly can lead to annual fees, penalties, and even lawsuits if debts or obligations remain unresolved.
What’s the process to dissolve an LLC in Utah?
- Hold a meeting (if you have multiple members) to approve dissolving the LLC as outlined in your operating agreement.
- File the Articles of Dissolution with the Utah Division of Corporations. You can do this online or by mail.
- Notify the IRS and Utah State Tax Commission that your business is closing. File final tax returns and cancel your EIN/tax accounts.
- Settle all debts and distribute any remaining assets among the members.
- Cancel business licenses and permits in your city (like Salt Lake, Ogden, Provo, or St. George).
The full requirements are in Utah Code § 48-3a-703.
How do I close a Utah sole proprietorship?
Unlike LLCs, sole proprietorships in Utah have no formal legal status with the state. Generally, you just stop doing business, notify your local city or county, and file your final taxes. If you have a DBA (doing business as) registered with the state, you should file a Cancellation of DBA/Assumed Name to officially remove your public record. Be sure to cancel any business licenses and sales tax accounts as well.
Are there forms or fees to dissolve my Utah LLC?
Yes—there’s a small filing fee (currently $20) for the Articles of Dissolution. You’ll find forms and instructions at the Utah Division of Corporations. If you’re unsure how to complete the paperwork, the state provides sample forms and helpful FAQs.
What happens to assets and debts when dissolving an LLC?
All outstanding debts must be paid first. Any assets left after settling debts are split among LLC members based on their contributions or as stated in the operating agreement. If assets aren’t handled correctly, members may remain personally responsible for remaining liabilities under Utah Code § 48-3a-708.
Do I need to notify clients, vendors, or the IRS?
- Let clients know your business is closing and settle all contracts or obligations.
- Inform vendors and suppliers so you aren’t billed after closing.
- Tell the IRS and Utah State Tax Commission—file final returns and cancel your EIN/tax accounts.
This prevents future confusion and helps wrap up any loose ends cleanly.
What are common mistakes Utahns make when closing businesses?
- Not filing Articles of Dissolution with the state (staying liable for yearly fees).
- Ignoring tax obligations—especially sales tax or employer payroll tax accounts.
- Not canceling city or county licenses/permits, resulting in local fines.
- Failing to document final decisions among LLC members if there are disagreements.
Following Utah-specific steps carefully will protect you legally and financially.
Are there waiting periods or extra steps in Utah?
Utah doesn’t require a formal waiting period after filing Articles of Dissolution, but you must settle debts and distribute assets before you’re officially done. If your business is under audit or has unpaid taxes, expect delays from the Utah State Tax Commission.
Related Video: How to Dissolve a Utah LLC
Unsure how the paperwork really looks? Watch this Utah-specific explainer to see the entire process of dissolving an LLC step-by-step.
What paperwork do I need for taxes and licenses?
File your final state and federal tax returns, check the “final return” box, and close out any state sales tax accounts. In Salt Lake City and other Utah towns, you must separately cancel your local business license. Don’t forget to keep all paperwork for at least four years in case of audit (see Utah Code § 59-1-1404).
Can the state automatically dissolve my LLC if I do nothing?
If you fail to file annual renewals, Utah’s Division of Corporations may “administratively dissolve” your LLC. However, you’ll still be responsible for old debts, contracts, and tax obligations unless you properly finish the process. Voluntary dissolution is almost always better for Utah business owners.
What’s different about closing a sole proprietorship in Utah?
For sole props in Utah, the main steps are informal: just stop operating, pay all bills, tell your local city or county, and file final taxes. Be sure to formally cancel any Assumed Name (DBA) if registered. Unlike with LLCs, there is no state filing required—but local city licensing, tax formalities, and banking steps still apply.
Final Word
Understanding Utah’s dissolution process protects your finances and your future. Whether you’re in Provo, Ogden, or rural Utah, taking the right steps—as outlined in current Utah Code—can reduce headaches, stop surprise fines, and help you move on quicker. Use this guide to close the loop on business responsibilities and stay in good standing.
Utah law can seem complex, but with reliable legal information you can make the right calls. This article isn’t legal advice, but a practical starting point. If you need personalized help, reach out to a Utah attorney. For more clear guides, visit Utah Law Explained or see our About Us page.