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Yes: 140 • No: 1
UtahS.B. 402026 General SessionSenateWALLET
Business Entity Amendments
Sponsored By: Evan J. Vickers (Republican)
Signed by Governor
RecodificationBusinessCorporations
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Bill Overview
Analyzed Economic Effects
74 provisions identified: 8 benefits, 5 costs, 61 mixed.
Creditor claims on LLC interests
A judgment creditor can get a charging order on a member’s interest so distributions go to pay the debt. A court may appoint a receiver and, if payments will not cover the judgment, can order foreclosure. If the debtor is the sole member, the buyer at foreclosure becomes the member and the debtor is out. The debtor, the LLC, or other members can satisfy the judgment to stop foreclosure.
LLC dissolution: claims and payout order
Beginning October 1, 2026, an LLC dissolves when events in its filings or agreement happen, or all members consent. A dissolved LLC may publish a notice; after publication, people must sue within three years or claims can be barred. A court can set money or other security for contingent or unknown claims; if provided, future enforcement against paid‑out members is limited. In winding up, the LLC pays creditors first, then returns unreturned contributions to owners of transferable interests, then shares any remaining cash equally among members and dissociated members.
Limited partners: protections and rights
Limited partners are not personally liable for partnership debts just for being or acting as limited partners, even if they help manage. Being a limited partner alone does not make you an agent of the partnership. Limited partners can inspect required records with a 10‑day demand and must get material information before votes. Good‑faith mistaken investors can fix records or file a negation to avoid ongoing personal risk; third‑party reliance before correction still applies. Partners must act in good faith under the partnership agreement.
Buyout after a partner dies or is disqualified
If a partner in a professional services partnership dies, is incapacitated, or is disqualified and there is no contract, the partnership must buy the interest within 90 days. The price is the reasonable fair market value on the event date. If the partnership does not buy, the estate or person can sue for that value or ask the court to liquidate, and can recover reasonable attorney fees and costs.
Creditor claims on partnership interests
A judgment creditor can get a charging order against a partner’s transferable interest. The lien diverts distributions to the creditor, and a court may appoint a receiver. If payments will not satisfy the judgment in a reasonable time, the court can foreclose and order a sale of the transferable interest. The buyer gets only the transferable interest, not management rights. A charging order is the exclusive remedy against the interest.
Creditor rights to partner distributions
A court can issue a charging order that diverts a partner’s distributions to a judgment creditor. If those distributions will not satisfy the judgment in a reasonable time, the court may foreclose the lien and sell the transferable interest. The buyer gets only the economic rights, not management rights.
General partner powers, duties, and risks
Each general partner can bind the limited partnership in the ordinary course unless the other side knew the partner lacked authority. General partners are jointly and severally liable for the partnership’s debts, but not for debts incurred before they became a general partner; debts of an LLLP stay with the LLLP. A judgment against the partnership is not automatically a judgment against a general partner, and creditors can reach a general partner’s assets only in set cases. General partners share management; big moves need unanimous partner consent. The partnership must repay advances by a general partner as interest‑bearing loans, and must indemnify general partners except for certain breaches; it may advance expenses and buy insurance.
Guardrails for partnerships and professionals
A partnership agreement controls how partners relate, but it cannot remove core protections like duties of loyalty, care, and good faith except as the law allows. Courts can strike terms that are unconscionable or against public policy. A professional‑services partnership may provide services in Utah only through people licensed or otherwise allowed here, with limited exceptions for work that needs no license or where a board allows an out‑of‑state licensee.
How partnerships gain and keep LLP status
A partnership can become an LLP by getting the vote needed to amend its agreement and filing a statement of qualification. The filing must list the LLP name, street address, and other required information. LLP status stays in effect until canceled or revoked. The Division can start revocation if fees, taxes, or penalties are unpaid for 60 days, an annual report is 60 days late, or there is no registered agent for 60 days. After notice, the LLP has 60 days to fix the problem or lose LLP status.
Lawsuits and 'holding out' as partner
A judgment against the partnership alone is not a judgment against an individual partner. A partner must be named and judged separately before their personal assets can be taken. If you are held out as a partner, you can be liable like a partner or jointly with those who consented to the claim.
Leaving a partnership: buyouts and liability
When you dissociate as a partner, you lose management rights and future duties, but you still owe for debts from before you left. The partnership must buy your interest at the higher of liquidation value or going‑concern value without you, with interest; it must pay or tender an estimate within 120 days after demand, and a court can set the price and terms if you disagree. For two years after you leave, your acts can still bind the partnership, and you can be liable on new deals, if the other party did not know you left and reasonably thought you were still a partner; creditors can also release you or a release can occur if payment terms change materially without your consent. You may transfer an interest, but that alone does not make the transferee a partner or give management rights; the partnership need not honor a transfer until it has notice.
Liability after a partner leaves
If your leaving as a general partner causes the partnership to dissolve, you are liable like a general partner for obligations during winding up. If you left a general partner role and the partnership makes a deal later, you are liable only for up to two years if a general partner would be liable, the other party did not know you left, and they reasonably thought you were still a general partner.
Limited liability partnership status and protections
All partners must agree to amend or cancel an LLP’s qualification filing. Administrative revocation removes only LLP status; it does not dissolve the partnership or end the registered agent’s authority. Canceling or revoking LLP status does not undo partners’ past liability protections. If a claim against a dissolved LLP is barred, matching claims against partners are also barred.
Limited partnership lawsuits and recoveries
Partners can sue directly for personal harms that are not just partnership harms. To sue for the partnership, a partner must first demand action from the general partners or show demand would be futile, and must meet strict pleading rules. Courts may pause discovery while an independent special committee reviews a case. Money won in a derivative suit belongs to the partnership; courts may award the plaintiff reasonable fees from the recovery, and any dismissal or settlement needs court approval. The chapter’s coverage of limited partnerships follows past transition rules for partnerships formed before 2014.
Limited partnerships: duties and payouts
General partners owe duties of loyalty and care, with options to authorize or ratify acts after full disclosure. Partners can contribute property, services, or promises, and obligations to contribute generally survive death or disability; if a non‑money contribution is not delivered, the partner can be required to pay its stated value. Before winding up, distributions are shared equally among partners and recent ex‑partners, usually in money, and recipients have creditor‑like rights subject to offsets. A limited partnership cannot make distributions if it would be insolvent or its assets would be below liabilities plus preferred amounts, and general partners who approve unlawful payouts—and recipients who knew—are personally liable for the excess, with a two‑year limit to sue.
LLC member rights and duties
Beginning October 1, 2026, an LLC is bound by its operating agreement, and new members are treated as agreeing to it. By default, members manage the company; ordinary matters take a majority and big acts need all members to agree. Members and managers owe duties of loyalty, care, and good faith. Members can sue on the LLC’s behalf after making a demand; any recovery goes to the LLC and courts can award the filer’s reasonable fees.
LLC operating and payout rules
The operating agreement controls LLC relations but cannot remove core legal protections and duties except as the law allows. The LLC cannot make a distribution if it would be unable to pay its debts or if assets would drop below liabilities plus required preferences, unless the agreement permits otherwise. Members or managers who approve unlawful payouts, and people who knowingly receive them, are personally liable for the excess. The LLC must reimburse and indemnify members or managers who follow their duties, may advance expenses, and may buy insurance.
LLC owner rights and transfers
Members can inspect and copy key LLC records with reasonable notice. The LLC must share important information and respond to certain written demands, often within 10 days. A transferable interest is personal property, and it can be sold without ending membership, but buyers usually get distributions only—not management rights—unless they become members. The LLC can enforce written transfer limits, require notice of transfers, and charge reasonable copy costs. If a member dies, the estate representative may exercise transferee rights. Members may sue directly for personal harms that are not just company harms.
LLP shield and payout liability
When a partnership is an LLP, its debts are the LLP’s, and partners are not personally liable just for being partners. But partners who approve prohibited distributions, and recipients who knew about them, can be personally liable for the excess. Claims must be filed within two years.
Partner duties, protections, and risks
Beginning October 1, 2026, partners share equal management; a majority decides ordinary matters, and big actions need all partners’ consent. Partners owe duties of loyalty and care and must act in good faith; they can inspect records, and former partners can get prior-period information on a 10‑day written demand. Partnerships must reimburse and often indemnify partners for proper acts and may advance expenses with a promise to repay if not entitled. All partners are jointly and severally liable for partnership debts, and holding someone out as a partner can bind consenting partners. Promised contributions still apply after death or incapacity, and a failed non‑cash promise turns into a cash obligation; partners and partnerships can sue to enforce rights.
Partnership dissolution and winding up rules
A partnership dissolves on events like a partner’s withdrawal, the term ending, a court order, or having fewer than two partners for 90 days. After dissolution, the partnership must wind up: pay debts, close operations, handle lawsuits, and distribute assets. If no partner can act, a representative or transferee majority may wind up, and a court can supervise. Partners can unanimously rescind dissolution with proper filings. Debts are paid first; if obligations predate LLP status and assets are short, partners from that time must contribute, and distributions are paid in money.
Partnership power and liability rules
Beginning October 1, 2026, a partnership can file a public statement naming who can bind it; it ends five years after its effective date unless renewed. The partnership is liable for a partner’s wrongful acts done in the ordinary course or with authority. New partners are not personally liable for old debts. Keeping a former partner’s name in the firm name does not by itself make that person liable. Creditors generally cannot seize a partner’s personal assets for a partnership claim unless listed conditions are met, such as an unsatisfied judgment against the partnership.
Partnership status and property rules
Sharing business profits now creates a presumption you are partners, with listed exceptions like rent, loan interest, or contractor pay. Each partner can bind the partnership on ordinary business deals unless the other side knew the partner lacked authority. Property bought or titled for the partnership is partnership property; using partnership funds creates a presumption. A partner can transfer titled partnership property in the partnership’s name. The partnership can claw back a transfer only if the deal didn’t bind the partnership and the buyer had notice or lacked good faith.
Partnership wind-up and creditor claim rules
When a partnership winds up, it must pay creditors first. Leftover money goes first to unreturned contributions, then to partners, and payouts must be in cash. A dissolved LLP can bar known claims if it gives written notice with at least 120 days to respond; if it rejects a claim, the claimant has 90 days to sue. It can also publish a notice that creates a three‑year bar for other claims. Claims that are not barred can be paid from any undistributed assets; partners or transferees are only on the hook up to what they received after dissolution. Courts can set security for contingent claims after a published notice. If the partnership properly cancels its dissolution, business resumes as if it never dissolved, but people who relied on the dissolution are protected. Partners must chip in for debts made before LLP status if assets are short, based on their past distribution rights; a partner who pays extra can recover from those who did not pay.
Rights for buyers of partnership interests
If you buy a transferable interest, you get the distributions the seller would have received under the transfer terms. In dissolution, a transferee can demand an accounting only from the date of dissolution. If you later become a partner with that interest, you are responsible for the seller’s obligations you knew about when you became a partner.
Rules for closing a limited partnership
A limited partnership dissolves by agreement, by vote, after certain partner departures, after 90 days with no limited partner, after 90 days with only one partner, by court order, or by administrative action. After dissolution, it must wind up: pay debts, settle affairs, and distribute assets; limited partners may appoint a wind‑up manager if there is no general partner. Partners can rescind dissolution only if everyone agrees and no termination, court order, or administrative dissolution has taken effect. A dissolved partnership can publish a notice that bars lawsuits filed more than three years after publication; if it was not an LLLP throughout, that bar also covers claims against general partners. Creditors may collect from undistributed assets and, if assets were paid out, from partners or transferees only up to what they received; general partners may have to contribute cash if assets are short for debts incurred when the firm was not an LLLP.
Three-year DBA renewals and loss if late
A DBA registration lasts three years. You can renew starting 60 days before it expires. If you do not renew, the Division sends a notice; if you still do not renew within 30 days after that notice, the registration permanently expires and someone else may claim the name. To cancel, file a signed letter with the name, the effective date, and a mailing address for service. This takes effect October 1, 2026.
When LLC members leave or are removed
Beginning October 1, 2026, a person may leave LLC membership at any time. Leaving is wrongful if it breaks the operating agreement or happens at the wrong time, and the leaver owes damages. The law lists many events that end membership, like expulsion, death, bankruptcy, some corporate transactions, and foreclosure transfers. After dissociation, the person loses management rights, duties end for future matters, and past liabilities remain; any interest kept is held only as a transferee.
Winding up a dissolved limited partnership
Beginning October 1, 2026, a court can supervise winding up and appoint someone to do it if needed. Acts for winding up can still bind the partnership if the other party did not know of the dissolution, and a former general partner can bind it for up to two years in similar cases. Partners who knowingly incur non‑winding obligations after dissolution are personally liable for damages. A dissolved partnership can bar known claims by written notice with at least 120 days to submit a claim; rejected claims must be sued on within 90 days. After publication, the court may set security for expected claims; providing that security protects partners and transferees. When a claim is barred, related claims against general partners and former partners are also barred.
Business names, reports, and agents
Beginning October 1, 2026, entities must file an annual report by the last day of their anniversary month and keep a Utah registered agent and Utah street address on required records. Your legal name must be clearly different from names on file, match your entity type, not imply a state agency, and some words need consent; names formed or changed on or after May 4, 2022 cannot use “911.” You can reserve a name for 120 days, and out‑of‑state entities can register a Utah name for one year and renew yearly. The Division may deliver official records to your registered agent, principal office, or another address you provide. Registered foreign entities must file updates when their name, formation state, required address, or listed information changes, and include a recent certificate for a name or jurisdiction change.
Clearer rules for business filings
Beginning October 1, 2026, filings must meet content and signature rules and include payment of required fees and taxes. You can set a delayed effective date up to 90 days, withdraw a filing before it takes effect, and fix errors with a correction that usually relates back. The Division must promptly file compliant records and explain refusals within 15 business days; certified copies from the Division prove what is on file. If someone will not sign or deliver a record, a court can order it filed and it is effective; people who relied on a knowingly false filing can sue the signer. Signers attest under penalty of perjury, and agents or legal representatives may sign if authorized.
General partners: duties and access
A person can become a general partner under the agreement, by unanimous consent, by certain transactions, or after the last general partner leaves. General partners can inspect required information during business hours and get other material records on reasonable notice. The partnership is liable for loss or injury caused by a general partner acting in the ordinary course or with actual or apparent authority, and for a general partner’s misuse of nonpartner money or property.
New state office for business filings
Beginning October 1, 2026, a new Division of Corporations and Commercial Code handles business and UCC filings. The Division may keep records electronically and sell or license copies and data in bulk or by subscription, with fees set under state fee rules. It can seek civil penalties up to $100 per day if you ignore its orders after notice. The Division also receives filing fees for certain entities like insurance and water‑related corporations.
Old business code sections repealed
The law repeals many older business‑entity rules and replaces them with a unified code. Businesses must follow the new chapters and procedures starting October 1, 2026. This changes how filings, mergers, conversions, dissolutions, and other processes work.
Stronger enforcement by Corporations Division
The Director can adopt rules, investigate complaints, hold hearings, issue subpoenas, and bring civil or administrative actions. The Director can issue cease‑and‑desist orders and administer oaths. The Director may designate people to carry out these duties. These tools expand oversight of business filings and conduct under these laws.
Broader merger options for businesses
Domestic entities can merge with domestic or foreign entities, and foreign entities can merge into a domestic one. A foreign party can join only if its home law allows it. All mergers must follow the plan, approval, filing, and effectiveness rules in the law.
Creditor rules for partnership interests
A judgment creditor must use a charging order to reach an owner’s transferable interest. Before foreclosure, the debtor or other partners can pay the judgment to clear or take over the charging order. A buyer at foreclosure gets only the transferable interest, not partner status. Exemption laws that protect certain property still apply to transferable interests.
Extra liability protections for partners
Missing LLP formalities alone does not make partners personally liable. Being named in a partnership authority statement does not, by itself, make you a partner. If you leave a partnership, failing to file dissociation paperwork does not keep you liable just for that reason.
Forming and governing a limited partnership
A limited partnership is its own entity, can have any lawful purpose, and has perpetual duration. It can sue and be sued in its own name. Utah law governs internal affairs and partner liability. People can make a preformation agreement that becomes the partnership agreement at formation. To form, file a certificate naming the general partners and principal office, and state if it is a limited liability limited partnership. A person can be both a general and a limited partner, with duties tied to the role they are acting in.
No license fee at certain filings
Beginning October 1, 2026, the Division does not charge a license fee at the time of certain filings by insurance corporations, canal or irrigation corporations, and listed water users’ associations. This applies to articles of incorporation, certain amendments that raise authorized shares, and mergers or consolidations.
Simpler business type conversions
The law lets a Utah entity change its type or move across borders if the other state’s law allows it. A written conversion plan is required. It must list both entities, their jurisdictions and types, how interests convert, and any public or private rule changes. Merger protections in contracts also apply to conversions through May 7, 2026.
Trade name (DBA) terms and rules
Beginning October 1, 2026, the law defines key DBA terms, like DBA name, DBA certificate, true name, Director, and Division. It also says a DBA follows the new DBA chapter. When that chapter is silent, Title 16, Chapter 1a applies.
Foreign businesses must register in Utah
A foreign business that must file in Utah cannot do business here until it registers with the Division. It also cannot keep or start a lawsuit in Utah courts unless it is registered.
Limits on leaving as limited partner
A limited partner generally cannot exit before winding up is complete. The law lists events that cause dissociation, such as withdrawal with notice, expulsion, death, or certain transfers. After dissociation, you lose limited‑partner rights, and any interest you held is owned only as a transferee. You remain liable for debts from when you were a limited partner.
New rules and fees for DBAs
Beginning October 1, 2026, anyone using an assumed name (DBA) must file a certificate within 30 days, list each owner and a Utah registered agent, and sign it. Your DBA name must fit your purpose, cannot use “LLC” or similar, and certain financial words need approval; names changed or approved on or after May 4, 2022 cannot include “911.” You may amend or transfer an active DBA by filing the proper signed paperwork. If you do not comply, you cannot sue in Utah courts under that DBA until you fix it, and you may owe a late fee up to three times the filing fee. The Division keeps a record of DBAs and charges filing fees.
Rules for professional partnerships
Beginning October 1, 2026, a professional partnership may offer only one licensed service and related work. It can own needed property and invest as the law allows. It cannot do anything an individual licensee is banned from doing. Only licensed persons or the partnership may buy a partner’s interest; estates may hold an interest for a time but cannot make service decisions. A professional remains personally liable for their own malpractice.
After you leave a limited partnership
Beginning October 1, 2026, if you leave as a general partner, you still owe for debts made before you left. You are generally not liable for obligations taken on after you left. You can be released from a debt if you, the creditor, and the partnership all agree. You are also released if a creditor who knew you left later makes a material payment change without your consent.
Agent compliance, names, and public listings
The Division posts a daily list of filings that name registered agents, kept for at least 14 days. A commercial agent’s listing can state it accepts service in ways other than a written record, and if its name is not distinguishable from another, it must use a different fictitious name. Noncommercial agents must file and promptly notify each entity if they change their name or address. Commercial agents must file and notify if they change their name, address, entity type, or jurisdiction. If a commercial agent changes address without filing, the Division may cancel the listing and must notify the agent and all represented entities.
Converting or moving a business entity
Conversions and domestications require a written plan and approval under the entity’s rules; owners who will have post‑transaction liability must approve in writing. You must file a statement; you may set the effective time up to 90 days after filing. When a conversion takes effect, the entity stays the same legal body; all property and debts continue with it. A foreign conversion is effective on the later of the foreign law’s date and the statement’s effective time. Until May 7, 2026, merger‑style protected‑agreement terms also apply to domestications.
Core partnership rights, roles, and transfers
A partnership can sue and be sued in its own name. After formation, someone becomes a partner by the agreement, by certain entity transactions, or with all partners’ consent, and a person may become a partner without a capital contribution. If someone is wrongly listed as authorized, they can file a denial. A transferee has the right to receive distributions and can ask a court to order winding up, but the partnership does not have to honor a transfer until it has notice, and transfers that break agreement limits are ineffective for those who knew of the limit. If you hold yourself out as a partner and someone reasonably relies and enters a deal, you can be liable.
Duties when interests change hands
If a partner transfers an interest, the transferor keeps all other partner rights and duties. A transferee who becomes a partner is liable for known contribution or improper distribution obligations. A deceased partner’s legal representative can receive distributions and access needed records to settle the estate.
Foreign businesses: Utah registration and exit rules
The law lists activities that do not count as “doing business” in Utah, like defending lawsuits, keeping bank accounts, or selling through independent contractors. A foreign business with a non‑compliant name must register under an alternate compliant name. You can withdraw your registration by filing a statement with a service address; for corporations and nonprofits, the Division asks the State Tax Commission to confirm taxes, fees, and penalties are paid. Claims that arose while you were registered can still be served after withdrawal. After mergers or conversions, the survivor must file a transfer of registration, and the Division can terminate a registration for unpaid fees/taxes, late reports, or agent failures, with a 60‑day cure window after notice.
How creditors collect from partnership interests
Beginning October 1, 2026, a creditor with a judgment uses a charging order to reach a partner’s distributions. Courts can appoint a receiver and issue orders to enforce it. The debtor can end the charging order by paying the judgment before foreclosure. The partnership or other partners can also pay and take over the creditor’s rights.
How to set, change, or end registered agents
When you name a registered agent, your filing affirms the agent agrees to serve. To become a commercial registered agent, file a listing; once accepted, the Division updates each entity you represent. A commercial agent can end its listing by filing a termination; it takes effect at 12:01 a.m. on the 31st day after filing, and people may still serve the old agent until a new one is named. A registered agent may resign by filing; resignation is effective on the earlier of 31 days after filing or when the entity names a new agent. An entity may change its agent by filing a statement that the new agent consents, and owners or governors do not need to approve the change.
Leaving a partnership: rules and notice
The law lists what events end someone’s role as a partner, like withdrawal, expulsion, death, or bankruptcy. Leaving can be wrongful if it breaks the agreement or ends a fixed‑term partnership too early, and damages can apply. For up to two years, a dissociated person’s acts may bind the partnership if the other party reasonably thinks they are still a partner. Filing a statement of dissociation gives public notice and limits the person’s apparent authority.
Limited partnership records and filings
A limited partnership must keep key records at its main office, including partner lists, the last three years of tax returns and financial statements, and recent annual reports. A filed certificate tells others it is a limited partnership and who the general partners are, and certain filings give notice after 90 days. Amendments need required approvals, and filed records can protect third parties who reasonably rely on them even if the agreement says otherwise.
LP general partners: leaving and liability
The law lists events that dissociate a general partner, like withdrawal with notice, expulsion, death or incapacity, bankruptcy, or certain transactions. You can withdraw at any time, but a wrongful withdrawal creates damages. After dissociation, you lose management rights and future duties, may need to file a dissociation statement and sign amendments, and you still owe for earlier debts. For two years, your acts can bind the limited partnership, and you can face damages to the partnership and other general partners, if a third party reasonably thinks you are still a general partner and lacks notice.
New rules for interest exchanges
Utah sets clear steps for interest exchanges between entities. The acquired entity must approve the plan under its own rules; the acquiring entity’s owners usually do not vote. Big plan changes need another vote, and a filed deal can be abandoned with a notice. The acquired entity files a signed statement with the Division and can pick a delayed date up to 90 days. When it takes effect, interests convert as the plan says, the acquirer holds the interests, and prior debts stay with the acquirer.
Partnership contributions, payouts, and property
The law explains what counts as a contribution. It can be property, services, other benefits, or a promise to provide them. Before winding up, interim payouts must be shared equally and non‑cash payouts are limited to fungible assets. It sets when distributions and related debt are measured. Partnership property is not a partner’s personal property, and a transferable interest is personal property.
Transferring a limited partnership interest
Beginning October 1, 2026, you may transfer all or part of your economic interest in a limited partnership. The transfer alone does not remove you as a partner or give the buyer management rights. A partnership may issue a certificate showing the interest; transferring the certificate can transfer the interest. The partnership does not have to honor the buyer’s rights until it knows of the transfer, and transfers that break known agreement limits are ineffective against those who knew. After a transfer, the seller keeps partner duties and obligations. If a partner dies, the estate’s representative can use transferee and limited‑partner rights to settle the estate.
Updated partnership definitions and rules
Utah updates many partnership terms like “distribution,” “partnership,” and “transferable interest.” A partnership is a legal entity separate from its partners. If a filed record conflicts with the partnership agreement, the agreement controls inside the partnership, but outsiders can rely on the public filing. The Legislature may amend these partnership rules at any time.
Utah businesses: dissolution and reinstatement steps
The Division can start administrative dissolution if you go six months without paying required fees or taxes, file an annual report more than 60 days late, or have no registered agent for 60 days. The Division must send notice, and you have 60 days to fix the problems. You can apply to reinstate at any time if your name is available, fees and penalties to the Division are paid, and the State Tax Commission certifies taxes are paid or on a plan. If approved, dissolution is canceled and your status relates back. If denied, you can ask a court to review within 30 days.
Who can join professional partnerships
A professional services partnership can include partners or employees licensed in another state. It may also include some partners not licensed in this state if licensing laws allow. Work done in this state must be performed by a professional licensed or registered here.
Winding up a partnership after dissolution
After dissolution, acts that help wind up can bind the partnership. If no partner remains, the last partner’s representative may wind up, or transferees with a majority of distribution rights can appoint someone. Required winding‑up payouts must be paid in cash.
Which partnership rules apply and when
These rules cover partnerships formed on or after January 1, 2014. Older partnerships could opt in before January 1, 2016; on January 1, 2016, the chapter began to govern all partnerships. Before 2016, some partner‑liability rules applied to third parties only if they had not done business with the firm before or knew of the election. Existing lawsuits and rights that started before this chapter took effect are not changed. General business‑entity rules in Chapter 1a also apply to limited partnerships, and the Legislature can change these laws at any time.
When these business rules start
The law takes effect on October 1, 2026. From that date, businesses must follow the new rules.
Appraisal rights and charity safeguards
Owners keep appraisal rights in mergers, conversions, and domestications when the new entity’s law gives those rights, unless valid rules limit them. If an agency’s OK or notice is needed for a merger, the same applies to interest exchanges, conversions, and domestications. Charitable gifts and trust duties move to the acquiring entity, which must honor them.
Domestication steps and legal effects
A business changing its home jurisdiction must file a statement of domestication. It can set a delayed effective date up to 90 days and may amend or abandon the plan before it takes effect. When effective, the same legal entity continues under the new law, and all property and debts carry over. Owners remain responsible for liabilities from before domestication as the law provides.
Interest exchange deals now allowed
A company can acquire classes of another company’s interests in exchange for cash, securities, debt, or other property. The law requires a written plan that names both entities and explains how interests convert and what records change. Foreign entities may join only if their home law allows it. Nonprofits under Utah’s nonprofit law are not covered by this part.
New Division and unified entity rules
Beginning October 1, 2026, the Division of Corporations and Commercial Code runs Utah’s business filings. The Director is appointed with the governor’s approval and can be removed by the governor. The Division can hold administrative hearings, issue subpoenas, and enforce orders. It sets forms and filing rules. The law also applies the new general business‑entity rules to Chapters 21 and 22.
New rules for business mergers
The law sets what a merger plan must say and how owners’ interests convert. Each company must approve the plan under its rules. A signed merger filing is required and can take effect up to 90 days after filing. When the merger takes effect, the survivor owns all property and takes on all debts of the merged companies.
Registered agent and service rules
You can serve a company by serving its registered agent. If the agent cannot be served, you may use certified mail to the principal office; service counts on the receipt date or five days after mailing with the correct address and postage. If that fails, you can serve the person in charge at a regular business location. Agents must forward legal papers to the company and can resign with notice. Nonregistered or nonfiling entities may designate a Utah agent for five years; this does not register them to do business or create Utah jurisdiction.
Rules for foreign business registration
A foreign company’s internal affairs and owner or manager liability follow the law where it was formed. Not registering in Utah does not void its contracts and does not stop it from defending a case. To register, a foreign company must file a signed statement with its name, type, formation jurisdiction, principal office addresses, and a certificate of existence dated within 90 days.
Uniform rules for Utah business entities
Utah applies common rules for many types of business entities to improve consistency. Courts are directed to read the law in line with the national model act. The chapter adjusts how federal e‑signature law applies and does not allow e‑delivery for certain ESIGN notices. Professional licensing boards keep full authority to license and regulate professionals.
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Sponsors & Cosponsors
Sponsor
Evan J. Vickers
Republican • Senate
Cosponsors
David Shallenberger
Republican • House
Roll Call Votes
Senate vote • 2/18/2026
Senate/ circled
Yes: 0 • No: 0
Senate vote • 2/18/2026
Senate/ concurs with House amendment
Yes: 25 • No: 0
Senate vote • 2/18/2026
Senate/ uncircled
Yes: 0 • No: 0
House vote • 2/12/2026
House/ passed 3rd reading
Yes: 67 • No: 1
House vote • 2/12/2026
House/ uncircled
Yes: 0 • No: 0
House vote • 2/11/2026
House/ circled
Yes: 0 • No: 0
House vote • 2/4/2026
House Comm - Substitute Recommendation
Yes: 11 • No: 0
House vote • 2/4/2026
House Comm - Favorable Recommendation
Yes: 11 • No: 0
Senate vote • 1/20/2026
Senate/ circled
Yes: 0 • No: 0
Senate vote • 1/20/2026
Senate/ uncircled
Yes: 0 • No: 0
Senate vote • 1/20/2026
Senate/ passed 2nd & 3rd readings/ suspension
Yes: 26 • No: 0
Senate vote • 1/20/2026
Senate/ substituted
Yes: 0 • No: 0
Actions Timeline
Governor Signed
3/17/2026Senate/ to Governor
3/3/2026SenateSenate/ received enrolled bill from Printing
3/3/2026SenateSenate/ enrolled bill to Printing
3/2/2026SenateEnrolled Bill Returned to House or Senate
3/2/2026Draft of Enrolled Bill Prepared
2/20/2026Bill Received from Senate for Enrolling
2/20/2026Senate/ signed by President/ sent for enrolling
2/19/2026SenateSenate/ received from House
2/19/2026SenateHouse/ to Senate
2/18/2026HouseHouse/ signed by Speaker/ returned to Senate
2/18/2026HouseHouse/ received from Senate
2/18/2026HouseSenate/ to House
2/18/2026SenateSenate/ concurs with House amendment
2/18/2026SenateSenate/ uncircled
2/18/2026SenateSenate/ circled
2/18/2026SenateSenate/ placed on Concurrence Calendar
2/17/2026SenateSenate/ received from House
2/17/2026SenateHouse/ to Senate
2/12/2026HouseHouse/ passed 3rd reading
2/12/2026HouseHouse/ uncircled
2/12/2026HouseHouse/ circled
2/11/2026HouseHouse/ 3rd reading
2/11/2026HouseHouse/ 2nd reading
2/5/2026HouseHouse/ comm rpt/ substituted
2/5/2026House
Bill Text
Enrolled
3/2/2026
Substitute #3
1/21/2026
Substitute #1
1/20/2026
Substitute #2
1/20/2026
Introduced
12/22/2025
Related Bills
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