All Roll Calls
Yes: 139 • No: 1
UtahS.B. 412026 General SessionSenateWALLET
Business Entity Technical Amendments
Sponsored By: Evan J. Vickers (Republican)
Signed by Governor
RecodificationBusinessCorporations
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Bill Overview
Analyzed Economic Effects
38 provisions identified: 9 benefits, 7 costs, 22 mixed.
Disaster relief rules for out‑of‑state crews
During a declared disaster, an out‑of‑state business that comes to Utah for disaster work is not treated as having a Utah presence that triggers state licensing or business registration, if it largely follows its home‑state rules. Workers from out of state doing disaster work get the same treatment. Property brought in temporarily for the disaster is not subject to state or local ad valorem taxes. The business must confirm its home‑state compliance if asked by regulators.
Do more Utah services online
State agencies let people do many official tasks online. This includes business registration, name filings, professional license applications and renewals, some tax returns, court filings, UCC filings, driver’s license renewal, and vehicle registration renewals. Agencies that help businesses must also join and keep the Business.utah.gov portal updated as a one‑stop shop.
Stricter rules for payday lenders
It is illegal to cash checks or make payday loans in Utah without registering and keeping that registration valid. You cannot use a mobile facility. Registrations expire each December 31; you must renew, file required forms, and show you are authorized to do business. Payday lenders must show nationwide database registration and file a yearly operations statement with detailed loan stats; the department keeps it confidential and deletes it within two years. If you fail to register within 30 days after notice, you can be fined $500, or $500 per Utah office. You must disclose certain fraud or dishonesty convictions, run Utah BCI or acceptable background checks on listed people, and keep records as required.
Insurers need a Utah home office
A Utah‑domiciled insurance company must keep its principal office and main place of business in Utah. The insurance commissioner can grant an exemption by order. If exempted, the company must follow the requirements in Section 31A‑14‑204.
Stricter setup rules for captive insurers
A captive insurer may form as a corporation, LLC, or nonprofit. At least one establisher must live in Utah, and the governing body must have at least three people, including one Utah resident. Establishers must get a certificate of public good before filing governing documents. The commissioner reviews character, reputation, finances, and insurance experience.
More entities count as corporations for tax
Starting October 1, 2026, Utah’s corporate tax definition includes domestic corporations under Title 16‑6a, foreign corporations doing business in Utah, certain project entities, and public agencies that own interests in facilities providing additional project capacity. This can change who must file and pay Utah corporate franchise and income tax.
New rules to merge HOAs
Two or more homeowner associations can merge only if each association’s owners approve it by the highest vote needed to amend their rules. The declaration must be signed and certified by each president, state how voting and interest shares are set, and be recorded in each county. Unless the document says otherwise, the new association takes on all powers, assets, and debts. These rules apply to both condo unit-owner associations and lot-owner associations beginning October 1, 2026.
Tighter rules for mortgage and real estate
Beginning October 1, 2026, you must be licensed to transact residential mortgage business in Utah. Both the individual who does the work and the company must be licensed. If you use an assumed name, you must register it and show proof; the division may charge a fee. The law lists conduct that can lead to discipline, like major misrepresentation, commingling client funds, false ads, certain crimes, and failing to answer an investigation within 10 business days. Licensed appraisers may operate as a professional corporation or an LLC.
Corporate moves, records, and dissent rights
A corporation can undo a dissolution within 120 days by filing articles of revocation, and it relates back as if no dissolution happened. A Utah corporation can move its legal home to another state if that state allows it and shareholders approve; debts and taxes from before the move still apply. Corporations must keep permanent minutes, accounting records, a current shareholder list, and key documents at the main office. In major deals, shareholders can dissent and get fair value; for listed firms or those with over 2,000 record holders, this is limited unless the deal’s consideration goes beyond surviving or listed shares or cash in lieu of fractions. After taking payment, a shareholder can only challenge fraud or illegality.
DAO forks, upgrades, and failures
After a blockchain hard fork, a DAO’s legal presence and off‑chain assets stay with the majority chain by default. A DAO can publicly pick a minority chain or split into separate entities, but it must clearly divide off‑chain assets. If code changes move the DAO to a new address, the DAO keeps its legal status only if new code still meets formation rules and it gives a public signal. If a failure or exploit breaks the DAO, members keep entity protections; deployers or upgraders can be liable only for bad faith or gross negligence.
Forming a Utah DAO and liability
Utah now recognizes DAOs as legal entities with limited liability once they file a certificate and required proof. Members are usually only liable up to what they put on‑chain and for their own wrongful acts. If the DAO refuses a court order, members who voted against compliance can be made to pay their share. To form, at least one organizer must be an individual, the filing must list an organizer and legal representative, and the DAO must keep a Utah registered agent. The organizer can ask the state to hide the individual organizer’s name and address from public view.
New rules for Utah PLLCs
Utah sets clear rules for professional limited liability companies (PLLCs). A PLLC may offer services in Utah only through people licensed in Utah and may practice one profession only. PLLCs cannot use a series structure. Filings must show “professional limited liability company” or “PLLC,” and the certificate must list the profession and each member’s or manager’s name and street address. Only licensed people (or the company) may own interests; estates can hold them briefly but cannot decide professional matters. If a member dies, is incapacitated, or is disqualified, the company must buy the interest within 90 days at fair market value unless an agreement says otherwise. A PLLC can convert to or from a regular LLC when licensure or votes change, and boards keep full licensing authority over individuals. The law lists covered professions like doctors, lawyers, accountants, engineers, and more.
Security firms must carry insurance
Beginning October 1, 2026, contract security companies may serve clients only if they meet set financial‑responsibility rules. They must have a written client agreement, general liability insurance of at least $1,000,000 per occurrence and $2,000,000 aggregate with specified riders, and workers’ compensation of at least $1,000,000 per occurrence for each officer. They must also keep a federal employer ID and an unemployment insurance account. These rules increase protection for clients and raise operating costs for firms.
Series LLCs: separate assets and rules
Utah lets LLCs create series that separate assets and debts when records, assets, and a liability notice in the certificate are kept as required. For filings on or after May 12, 2015, the series‑liability notice must appear right after the company name. A series can act like its own entity, and members or managers may choose to personally guarantee a series’ debts. Default rules cover management, voting, and distributions; improper distributions can create personal liability, and claims to recover them must be brought within two years. A series can dissolve without ending the whole LLC. Foreign LLCs with series must disclose their series status and liability limits when registering in Utah.
How Utah taxes DAOs
If a DAO elects corporate tax status for federal taxes, Utah taxes it under the corporate franchise and income tax. If it does not make that election, Utah treats it as a partnership under the pass‑through rules. Income, losses, deductions, and credits are allocated to members in proportion to their membership interests.
Banks may convert to LLCs with guardrails
Covered banks and holding companies may organize or convert to an LLC under Utah law. They must file for commissioner approval at least 30 days before converting; approval is deemed if not disapproved within 30 days. For insured institutions, the law requires safe and sound operation, an independent board, no owner liability beyond investment, transferable interests and access to new funding, and full regulatory compliance. These characteristics must be maintained as an LLC. The LLC Act governs, and a transferred membership interest carries all economic and voting rights like a corporate share.
More builder license courses statewide
Approved providers must offer the 25‑hour prelicensure course at least six times each year in counties outside Salt Lake, Utah, Davis, and Weber. Only certain named trade groups qualify as approved providers and must meet commission rules. This makes it easier to take the course outside the Wasatch Front.
Alarm firms not treated as contractors
Starting October 1, 2026, alarm companies and material suppliers who advise on installing their products are excluded from the "contractor" definition. This can ease contractor licensing burdens for those businesses.
DAO bylaws and member rights
A Utah DAO must write bylaws in plain terms and may redact sensitive member details. A DAO does not need an administrator unless its bylaws require one; otherwise, members share those powers. Each DAO must name a legal representative for off‑chain tasks and post cryptographic proof of that authority; the representative is not personally liable for authorized acts. Developers and members are not fiduciaries unless they say so or the bylaws say so. If governance tokens give voting power, you become a member when your address shows ownership or you first act on‑chain, and members may use proxies to vote.
DAOs can file and sign electronically
Utah allows DAO filings and signatures by electronic means. The division sets rules, and electronic signatures must follow the Uniform Electronic Transactions Act. This makes DAO filings faster and easier.
Film distributors may change registered agents
Beginning October 1, 2026, a film distributor qualified in Utah may change its registered office or agent under state rules. Legal papers may be served on the distributor’s registered agent.
Business court definitions add blockchain
Starting October 1, 2026, business‑court terms are updated, including definitions for blockchain and business organizations. This helps courts handle modern business and technology disputes more clearly.
Lower compliance risk for benefit companies
People cannot sue a benefit company, or its members or managers, for not creating a public benefit except in a benefit enforcement case. The company is not liable for money damages under that chapter for those failures. The annual benefit report’s performance assessment does not need a third‑party audit or certification.
Annual benefit report and sharing
Each benefit company must prepare a yearly benefit report. The report explains how it pursued general and any specific public benefits, its third‑party standard, performance against that standard, and any ties to the standard’s organization. The company must send the report to members within 120 days after the fiscal year ends (or with other annual reports), post it online within five days, and file a copy with the state. Public copies may omit financial or proprietary information, and the state may charge a filing fee.
New small portal and payment fees
Renewals may include a single sign‑on fee up to $5 to fund the state’s business portal. The Department of Commerce may also charge an electronic payment fee to each applicant or renewer, even if they do not pay electronically. Fee revenue goes into state accounts, including a Commerce Service Account that cannot hold more than $1,000,000 in undesignated funds at year‑end; any extra moves to the General Fund. The department needs legislative approval to spend from the restricted account.
Tighter filing rules for foreign co-ops
A foreign cooperative must file a detailed application, name a Utah agent, list directors and officers, and include a certificate of existence. If its name does not meet Utah rules, it must adopt and use a compliant alternative name. If it cancels or operates without authority, it cannot bring a lawsuit in Utah, and the division becomes its agent for service of process. Contracts remain valid, and members are not personally liable just for lacking a certificate.
Limits on trustee liability in partnerships
Beginning October 1, 2026, a trustee who holds a general partner interest is not personally liable on later partnership contracts if the trustee role was disclosed. The trustee is also not personally liable for partnership torts unless personally at fault. These limits do not apply if the interest is held in a non‑trust capacity or by certain family members. If the trustee of a revocable trust holds the interest, the settlor is personally liable like a general partner.
Benefit duties and who can sue
A benefit company must have a purpose to create a general public benefit. Members and managers must consider effects on members, employees, customers, communities, the environment, and short‑ and long‑term interests; officers consider these only when they have discretion and the matter could materially affect benefits. Only certain people may bring a benefit enforcement suit: the company; a member with at least 2% ownership at the time; a manager of a manager‑managed company; a person or group with at least 5% ownership of a parent association; or anyone named in the company’s governing documents.
Changing benefit company status
An LLC can become a benefit company by amending its certificate and getting at least the minimum status vote. A non‑benefit entity must also get that vote to merge into a benefit company. A benefit company can exit benefit status only if it amends its certificate and that vote passes. Members must also approve, by the minimum status vote, sales of all or substantially all assets outside the ordinary course. Companies can add, change, or remove listed specific public benefits with the required vote.
Co‑op membership and leaving rules
You can become a member of a limited cooperative association under its rules, through a merger or conversion, or if all current members agree. A member can leave at any time by clear notice. Leaving is wrongful only if it breaks the co‑op’s written rules or happens when the rules forbid it; wrongful leaving can create liability for damages. The law lists events that cause you to stop being a member, such as expulsion, death, or certain mergers.
Electronic and uniform rules for LLCs
This chapter changes how the federal ESIGN law applies here. It allows electronic signatures but does not change ESIGN section 101(c) and does not allow e‑delivery of the notices in ESIGN section 103(b). Courts and practitioners should favor uniform rules that match the model act in other states. Beginning January 1, 2016, this chapter governs all Utah LLCs unless the law says otherwise.
Leaving a co-op: rights and debts
When you leave a cooperative, you lose member rights except as a special rule allows. Your financial interest becomes your property as a transferee. Debts or duties you took on while a member still apply to you.
Legal contacts and service of papers
Suppliers doing business in Utah can file a Utah agent to receive legal papers. If no agent is listed or cannot be served, the plaintiff must also send the papers by registered or certified mail and file an affidavit on time, or service is not effective. Registered agents can resign by filing notice; the appointment ends 30 days after filing. A corporation sole that changed its articles on or after May 3, 2004 must keep an official representative on file or use its registered agent as that representative.
Low‑profit L3C rules and options
L3C rules control if an LLC is organized as a low‑profit company. An L3C must include “L3C” in its name, state that status in its certificate, and primarily further charitable or educational purposes under IRC 170(c)(2)(B). It cannot have a significant profit purpose or do barred political or legislative activity. If an L3C stops meeting a requirement, it loses L3C status that day and must change its name and amend its certificate. L3Cs can merge, convert, exchange interests, or domesticate like other LLCs.
Non‑veterinarians can own vet practices
A veterinary corporation can sell or transfer stock to a person who is not a licensed veterinarian. An unlicensed person cannot be an officer or director, but can serve as secretary or treasurer. Veterinary LLCs and partnerships may include unlicensed people. These rules start October 1, 2026.
Faster trust lands deals in cases
The Trust Lands Administration can treat proposals as protected during review and return ones it will not pursue. With written findings and at least five board members approving, it can use faster rulemaking. The board may hold closed strategy meetings, by a two‑thirds vote, when open discussion would hurt appraisals or deals, following open‑meetings procedures.
Device filter definitions for obscene content
Starting October 1, 2026, the law defines who is a device maker or retailer and what a “device” and “filter” mean. A “device” is a tablet or smartphone made on or after January 1, 2025. A “filter” is software that blocks obscene material in the maker’s browser or search engine, on mobile data, wired, and wireless networks. These terms set who must follow any filtering rules.
New court and service rules for nonresidents
Beginning October 1, 2026, you can go to court to cancel a Utah‑registered trademark; the division is usually not a party but may join. If an out‑of‑state business has no Utah registered agent, you can serve legal papers on an employee or agent. The law lists acts that submit nonresidents to Utah courts, like doing business, contracts to supply goods or services, causing injury, owning Utah property, insuring Utah risks, residency during marriage for family cases, committing the act in Utah, and intercourse in Utah leading to parentage.
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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/ uncircled
Yes: 0 • No: 0
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
House vote • 2/12/2026
House/ uncircled
Yes: 0 • No: 0
House vote • 2/12/2026
House/ passed 3rd reading
Yes: 66 • No: 1
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/ passed 2nd & 3rd readings/ suspension
Yes: 26 • No: 0
Senate vote • 1/20/2026
Senate/ uncircled
Yes: 0 • No: 0
Senate vote • 1/20/2026
Senate/ substituted
Yes: 0 • No: 0
Senate vote • 1/20/2026
Senate/ circled
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
2/23/2026SenateEnrolled Bill Returned to House or Senate
2/23/2026Draft 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
2/23/2026
Substitute #2
1/21/2026
Substitute #1
1/20/2026
Introduced
12/22/2025
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