Set Up a Contracting Business in Utah
If you're ready to take your contracting career to the next level, setting up a legal business is the first step to establishing credibility, protecting yourself, and growing your opportunities. Here’s a practical guide to help you navigate the process in Utah.
1. Set Up a Business Entity
LLC (Limited Liability Company)
Benefits: Protects your personal assets by limiting liability to the business itself.
Cost: $59 to register, $18 per year to renew.
How to Register: Use the Utah Online Business Registration Portal.
2. Apply for an EIN (Employer Identification Number)
Purpose: An EIN is required to open a business bank account and for tax purposes if you establish an LLC.
Cost: Free.
How to Apply: Visit the IRS EIN Application Portal.
3. Open a Business Bank Account
What You’ll Need:
Personal ID.
EIN confirmation document.
LLC registration paperwork.
A business bank account will allow you to deposit checks in your company name and help you keep your finances organized and professional. Quickbooks is a great tool for accounting or hire a bookkeeper.
4. Obtain Liability Insurance
Minimum Coverage Requirements:
$100,000 per incident.
$300,000 aggregate minimum coverage.
Recommended Insurance Providers:
Van (Agent): 435-990-1021.
Purpose: Liability insurance is essential for obtaining a contractor’s license and protecting yourself from lawsuits related to your work. Consult an insurance professional about what this covers and what other coverage you may need.
5. Obtain a Worker’s Compensation Waiver
Purpose: If you don’t have employees, you can apply for a waiver to avoid paying worker’s compensation. If you want coverage for yourself or have employees ask your insurance agent about workers comp coverage.
Cost: $50.
How to Apply: Use the Utah Worker’s Compensation Coverage Waiver.
6. Apply for a Contractor’s License
Temporary Option: Handyman Contractor’s License
Details: Allows small-scale work with a $3,000 legal limit per job.
Cost: $35.
How to Apply: Utah Handyman License Application.
Permanent Option: Specialized or General Contractor’s License
Details:
Specialized Contractor: No test or continuing education required.
General Contractor: Requires passing an exam and ongoing education.
Costs:
$350 for the pre-licensing course.
$225 for the primary classification application.
$175 each for up to 2 additional classifications (3 total).
How to Start: Enroll in the Utah Home Builders Association Course.
Final Tips for Success
Ask Questions: Contact the Utah Home Builders Association or the Department of Occupational and Professional Licensing (DOPL) for guidance. Both organizations are knowledgeable and helpful.
Invest in Professional Help: This guide provides advice on how to set up a business, but if you want professional assistance, consider hiring a business consultant or attorney.
Disclaimer: This information is offered as free advice based on best practices and personal experience. Your results will depend on your actions, and you are responsible for following all applicable regulations.
Best of luck!
P.S. If there's anything I missed please lmk. Simple things as this can get very complicated. Each of the 6 tasks can me more thoroughly explained and researched. I.E. You can use other business structures.
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