This article provides three key state business startup requirements for self-employed sole proprietors and general partners who run residential house cleaning businesses. Information from the Secretary of State, the Utah State Tax Commission and selected city and county government sources were used to research this article.
Be aware that sole proprietor and general partner startup requirements in this state are always changing. Some requirements even vary from county to county. It is important that you call or visit your local county or city government to find out local requirements for residential house cleaning businesses and home-based businesses. This article is not intended to be exhaustive or a substitute for qualified legal or tax advice.
Business Name Registration
Sole proprietors and general partners who want a business name that does not include the owner(s) full names (for example, Janice Smith’s Cleaning Service or Martha Harris’ and Tom Graham’s Maid Service) need to find out whether the name they want to use is available in the state. Start with a statewide corporate business name search to avoid legal problems and customer confusion.
Then do an online search for names similar to the one you plan to use. For example, if you want to use the name, Crystal Clean Maid Service, do simple Google searches for “Crystal Clean Maid Service+Utah” plus Crystal Clean Maid Service+your county” and “Crystal Clean Maid Service+your town or city”. Search beyond the first page of results. Go at least five pages deep into the search results to see if the name you want or similar names are being used in your state, county or city.
Sole proprietors and general partners must register for a DBA (“doing business as” name) for their business with the state of Utah. Utah provides a secure online portal for business name registration, the One Stop Business Registration System. Through Utah’s One Stop Business Registration System, new businesses can register for a DBA, state and local business licenses, the state Tax Commission plus other state agencies.
In the state of Utah, registering a DBA does not guarantee a business sole rights to the use of that name. Other businesses in the state may also register a similar DBA. Registered businesses are expected to legally defend their DBA names.
Business License Registration
All businesses in Utah must be licensed by the state. Register online through Utah’s business license and tax registration portal, the OneStop Business Registration System.
In Utah, a general partnership is created when two or more owners form an oral or written agreement to start a business together. General partners are not required to file any documents with the Secretary of State. A written partnership agreement drawn up by a lawyer is important for both or all partners. Partnership agreements do not have to be filed with the state.
Other Utah Partnership laws:
• A partnership is not an employer of the partners, as a result, a partner who leaves a partnership is not entitled to unemployment benefits.
• The profits or losses of the business are shared by the partners, who report their shares of the profits or losses on their individual income tax returns, because the partnership does not pay income taxes.
• A partnership may own property in its own name.
• A partnership usually may not sue or be sued in its own name. The individual partners must sue or be sued.
• A partner may not sue his or her partners. Their sole remedy is to seek an accounting between the partners.
Sole proprietors and general partners may apply for an Employer Identification Number (EIN) from the IRS even if they do not plan to hire employees. Getting an EIN may make it easier to open a bank account and reduce your risk of identity theft. You can apply for an EIN online. In addition, some business registration forms will require a NAICS business classification number for the house cleaning industry.
Business Tax Registration
Residential house cleaning services are not taxable in Utah. Cleaning businesses do not have to collect and send sales taxes to the Utah State Tax Commission.
Sole proprietors and general partners must pay taxes on the business income they earn through individual state income tax returns. However, Utah does not require quarterly estimated tax payments on state tax form TC-40, unlike how self employment taxes are paid to the federal government. Get more information about state income tax requirements by calling the Utah State Tax Commission at (801) 297-2200 or (800) 662-4335 (outside of the Salt Lake City area).
Utah general partnerships that file a Federal partnership information Form 1065, may need to file state income tax Form TC-65. Get more information from a CPA or qualified tax preparer to find out if your partnership must file those returns.
Selected Utah City Licenses
Ogden Business License: https://www.ogdencity.com/195/Business-Licensing
Orem Business License: https://orem.org/businesslicensing/
Provo Business License: https://www.provo.org/provo311/licensing/business-licensing
St. George Business License: https://www.sgcity.org/administration/formsandapplications/businesslicensing
Salt Lake City Business License: https://www.slc.gov/Finance/business-licensing/
Sandy Business License: https://sandy.utah.gov/business/business-licensing
West Jordan Business License: https://www.westjordan.utah.gov/business-licensing
West Valley City Business License: https://www.wvc-ut.gov/84/Business-Licensing-Steps