All Roll Calls
Yes: 140 • No: 1
UtahS.B. 402026 General SessionSenate
Business Entity Amendments
Sponsored By: Evan J. Vickers (Republican)
Signed by Governor
RecodificationBusinessCorporations
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Bill Overview
Analyzed Economic Effects
49 provisions identified: 11 benefits, 8 costs, 30 mixed.
Partnership owners gain personal debt protections
Limited partners are not personally liable for partnership debts solely because of their role, management participation, or missed formal steps. General partners receive role-based protection for debts incurred while the business is a limited liability limited partnership. New general partners are also protected from personal liability for debts incurred before joining. Investors who honestly mistake their status for limited-partner status can gain protection by filing a correction or statement denying partner status. They remain liable to third parties who dealt in good faith before filing, believing they were general partners; general business-entity rules also apply to limited partnerships.
Businesses face shutdown for missed requirements
Utah can dissolve a domestic filing entity when required fees, taxes, interest, or penalties remain unpaid for six months. Other grounds include an annual report 60 days late or no Utah registered agent for 60 consecutive calendar days. After notice, the entity has up to 60 days to fix the problems or show they do not exist. Once dissolved, it can only close its affairs, liquidate, or seek reinstatement.
Partners must cover unpaid business debts
When partnership assets fall short, responsible partners must contribute toward debts incurred while the business was not a limited liability partnership. Those partners must have held that role when the debt arose and not have been released. General partners face a similar rule for debts incurred without limited liability limited partnership status. Shares follow distribution rights when the debt arose; remaining contributors cover unpaid shares proportionally and can seek repayment. For limited partnerships, recovery cannot exceed the extra contribution, and the defaulting person’s liability cannot exceed the unpaid contribution.
Creditors can claim company ownership payouts
An LLC’s transferable interest includes any fraction of that interest, whoever owns it. A judgment creditor can obtain a court lien that redirects the debtor’s LLC distributions after the company receives the order. Foreclosure requires proof that distributions are unlikely to pay the judgment within a reasonable time. A foreclosure buyer generally gets the financial interest but does not become a company member.
Dissolved businesses can return after compliance
Administratively dissolved businesses can apply for reinstatement after fixing the grounds for dissolution and completing required filings. They must pay required fees and penalties and obtain Tax Commission certification of good standing, including through a current payment plan. Eligible businesses dissolved from May 1, 2019, through April 30, 2024, can also apply. Reinstatement reaches back to the dissolution date and restores operating authority, without harming third-party rights gained in reliance on dissolution. A dissolved entity keeps its name and doing-business-as name for five years; reinstatement also requires name availability.
Leaving businesses brings protections and liabilities
Former partners generally are not liable for partnership debts incurred after they leave, except for specified later transactions. Leaving does not erase liability for earlier debts. Partners who wrongfully leave owe damages to the partnership and other partners for losses caused by their departure. LLC members who wrongfully leave owe damages to the company and, when the direct-action rule allows, other members. These damages are added to other debts and liabilities.
Business filers gain review and remedies
The division must accept compliant filings, record their date and time, and provide an acknowledged copy. It must explain a refusal within 15 business days after delivery; filers get a division-set amendment period of no more than 30 days after notice. Filers can appeal a final refusal after reexamination; acceptance does not prove legal validity or accuracy, and copy certification only confirms the filed record. Someone harmed by a missing signature or delivery can ask a court to require it or order effective filing without a signature. A petitioner other than the person the record concerns must make that person a party to the case.
Business name filings drop indexing fees
Utah's amended assumed-business-name certificate fee rule no longer includes an indexing fee. Other required certificate filing fees still apply. The law does not state the amount saved.
Businesses can reserve names before registering
Applicants can reserve an available business name for exclusive use for 120 calendar days. The application must identify the applicant, address, and requested name. A signed notice naming the new holder and address can transfer the reservation. An out-of-state entity not registered in Utah can reserve an available name, or a compliant alternate name, for one year. It can renew for successive years by applying no earlier than three months before expiration.
Limited liability companies gain lifecycle options
A planned first member can agree to operating terms before a limited liability company forms. Those terms become its operating agreement at formation. For a dissolved company with no members, transferees holding most distribution rights can appoint someone to close its remaining affairs. This applies when the last member’s legal representative declines or fails to do that work. The appointee has a sole manager’s powers and must promptly file a certificate amendment identifying the company, appointee, and appointment.
Partnership investors can appoint closing managers
Distribution-right holders can appoint someone to close a dissolved partnership when it has no partner or other authorized participant. This option applies when the last partner’s representative does not handle the closing. Holders of a majority of distribution rights must agree. The appointee has a partner’s closing powers and does not become liable for partnership debts solely from the appointment or work.
Charitable property and gifts survive transactions
An entity holding property for a charitable purpose must keep possession during a covered transaction, as far as law permits. After a merger, gifts and promises to the acquired entity remain payable to the acquiring entity when they take effect. This includes gifts through wills and other donation or transfer documents. The acquired entity’s trust duties also transfer to the acquiring entity.
Claimants gain backup business service methods
Legal papers can be served on an entity’s registered agent. With no agent or unsuccessful reasonable efforts, service can use registered or certified mail or similar delivery to the principal office. If those methods are impossible, papers can go to a nonparty person in charge of a regular business location. Mail or delivery takes effect at receipt, the signed receipt date, or five days after correctly addressed and fully paid dispatch, whichever comes first. Service generally must be written, but commercial agents can accept another form under their requirements.
Businesses gain ownership exchange options
Domestic entities can make specified ownership exchanges for interests, securities, debt obligations, money, property, or rights to acquire interests or securities. Foreign entities can participate only when their home jurisdiction’s law authorizes the exchange. Protected agreements addressing mergers also cover an exchange that acquires a domestic entity when the agreement omits exchanges, until amended. This authorization does not cover transactions under Utah’s nonprofit corporation law.
Out-of-state businesses keep key legal protections
An out-of-state entity’s home law governs internal affairs and liability for owners, governors, and unincorporated-entity series, whether registered or not. Failure to register does not invalidate contracts or acts, or prevent the entity from defending a Utah case. It also preserves specified liability limits for series, owners, governors, and partners in out-of-state limited liability partnerships. Utah’s shared business rules also apply to Chapters 16-21 and 16-22. The law’s main effective date is October 1, 2026; some provisions have separate dates.
Selected corporations avoid filing license fees
Utah cannot charge specified insurance corporations and qualifying water entities a license fee for listed corporate filings. Covered filings include incorporation, amendments increasing authorized shares, and mergers or consolidations. Canal or irrigation corporations must supply water to lands owned exclusively by members. Covered water users’ associations must be organized under the federal Reclamation Act of June 17, 1902, and supply only stockholders. The division sets other authorized filing fees under the state fee law; no fee amounts are stated here.
Business agents must update and forward
Commercial registered agents must file their identity, Utah service status, and physical business address, using a distinct fictitious name when needed. Their listing designates them for represented entities and removes former commercial-agent entries. Noncommercial agents must report name or address changes for each represented entity; commercial agents must report name, address, entity-type, or formation-jurisdiction changes. Agents must promptly notify represented entities, keep records current, and forward legal papers and required notices to the entity’s latest provided address. The division may cancel a commercial listing for an unreported address change, with notice to the agent and represented entities.
Business names face limits and liability
Business and trade names generally must differ from names on file; punctuation, spacing, capitalization, common words, and entity labels do not count. Conflicting names need required consent or a certified final court judgment. Corporations need corporate labels; nonprofits may use them, but cannot use barred limited-entity terms, and neither can claim unauthorized purposes. False government names are barred; specified Olympic and financial terms need consent, and “911” restrictions cover entities formed or renamed on or after May 4, 2022. Registered trusts must end names with “business trust”; anyone participating in, or knowingly allowing, commercial omission is liable for resulting debts or losses.
Business trade names require timely registration
Businesses using a name different from their legal name must follow Utah’s doing-business-as, or DBA, rules. They must file within 30 days after starting, listing the name, business address, owners’ names and street addresses, and Utah agent. Each owner or authorized representative must sign, and the filing must include the required notice about name rights. Each partner in an unregistered general partnership must register a DBA; general business rules cover gaps in DBA rules. The director may charge a late fee capped at three times the referenced filing fee; no base amount is stated.
Business violations face enforcement and penalties
Utah’s business filing division can bring administrative or civil actions concerning laws and matters it administers. Its director can hold hearings, take administrative action, and use subpoenas and other compulsory process within that authority. A court can impose up to $100 for each day a person violates a covered administrative order or injunction. The penalty applies only after the person receives notice of the order.
Businesses must follow entity naming rules
The law applies common business rules across the covered Utah business types. Business names must include words or abbreviations that match their legal type, such as corporation or limited liability company. Names cannot use terms reserved for another business type. Professional corporations also cannot use names suggesting work they are not authorized to do.
Businesses must keep annual filings current
Utah domestic filing entities and registered out-of-state entities must file annual reports with current information, including their address. Reports must include the business name, formation jurisdiction, principal office, and each director’s and principal officer’s name and address. Unless the division sets another period, reports are due on the last day of the anniversary month and can be submitted 60 days early. Evidence of submission satisfies the submission requirement. When the general business chapter requires an address, filings need a Utah street address and any different Utah mailing address, except agent-designation records under Section 16-1a-410.
False business filings bring legal consequences
People signing business filings affirm under penalty of perjury that all important facts are true. Agents can sign for individuals; legal representatives can sign when the required signer is deceased or incompetent. Both must affirm their authority to sign. A person who loses money by relying on inaccurate filed information can recover damages from the signer or person arranging the signing. Recovery requires that person to have known the information was inaccurate when signed.
Business agents can leave with notice
A registered agent can resign by filing a signed statement and promptly notifying the business of the filing date. Resignation takes effect at 12:01 a.m. on day 31 after filing, or when a replacement is named, whichever comes first. An agent can resign even when the business is not current with the division. A commercial agent can end its entire listing at 12:01 a.m., 31 days after filing a signed termination statement. It must promptly notify represented businesses and may still receive legal papers until a business names a new agent.
Business conversions preserve assets and obligations
A converted entity continues without interruption, keeping its property and liabilities; its rights and powers continue subject to law or the plan. Holders retain only plan or legal rights, including applicable appraisal rights; conversion alone creates no dissolution rights or winding up. Earlier owner liability remains, but the former governing law does not impose liability for later debts; existing outside-entity Utah registration ends. Utah entities follow their plan's amendment process, or its approval process if none exists; eligible holders retain votes on payment changes, specified governing-document changes, and materially harmful changes. An approved plan can be abandoned before it takes effect, subject to its terms; an already-submitted conversion requires an abandonment filing. A conversion into an outside entity cannot take effect before its new governing law permits.
Business mergers preserve debts and limit rights
Utah entities can merge with Utah or outside entities; two or more outside entities can also merge into a Utah entity. Outside entities can participate or survive only when their home law authorizes the merger. A merger alone creates no dissolution, liquidation, or winding-up rights unless the entity's governing law or rules provide otherwise. Earlier owner liability remains; newly liable owners answer only for later obligations under the surviving entity's law, not earlier debts. The former Utah entity's law does not impose liability for later debts, and nonsurviving outside entities lose their Utah registrations.
Business ownership exchanges require approval safeguards
An acquired entity must approve an ownership exchange under its governing law and rules or the statutory fallback process. Owners facing personal liability for later obligations must approve in a record, except when qualifying governing rules provide otherwise. Outside acquired entities follow home law; the buyer's owners need not approve unless its law or rules require it. Plan amendments require every party's consent unless the plan sets another process. Eligible holders retain votes on changes to what they receive, specified governing documents, or other materially harmful terms.
Business trade names face compliance limits
Doing-business-as names need Department of Financial Institutions consent for words covered by the financial-name law. LLC or incorporated wording is allowed only when the owner is the matching entity type registered in Utah. Only active registrations can be amended or transferred; expired or canceled certificates cannot be amended. Amendments need identification, requested changes, and an authorized signature; transfers need owner names and addresses, the business address, and both owners’ signatures unless law provides otherwise. Businesses that fail to comply cannot sue in Utah courts under that trade name until they comply.
Business trade names need three-year renewals
A Utah doing-business-as, or DBA, registration lasts three years. Businesses can renew starting 60 days before expiration through a statement signed by an authorized representative. They can also update registration information during renewal. If renewal is missed, the division must send notice to the registered agent. After 30 days from that notice without renewal, registration permanently expires and anyone can immediately claim the name.
Businesses gain conversion options with safeguards
Utah entities can change to another legal type in Utah or another jurisdiction; outside entities can change into a Utah type. Cross-jurisdiction conversions require authorization under the outside jurisdiction's law. Entities already needing Utah agency notice or approval for mergers also need it for ownership exchanges, conversions, and jurisdiction changes. Protected agreement terms covering mergers also cover conversions and jurisdiction changes when those terms do not mention them. This agreement protection lasts until the relevant term is amended after May 7, 2026.
Businesses need agents but gain flexibility
Utah domestic filing entities, registered out-of-state entities, and trade-name registrations must keep a Utah registered agent who agrees to serve. Businesses can update agent information through a change statement or amendment; domestic entities need no owner or governing-body approval. Unregistered out-of-state entities and nonfiling Utah entities can voluntarily designate an agent through an authorized signer who confirms the agent’s consent. That designation lasts five years unless canceled earlier, ends when an out-of-state entity registers, and does not itself register that entity. An agent designation alone does not establish Utah courts’ personal jurisdiction, and the agent’s address does not decide case location.
Company agreements and information face limits
For LLCs with appointed officers, the chief executive counts as a governing person regardless of title. Courts review challenged operating-agreement terms using facts from when the term became part of the agreement. They can reject a term only when its purpose or method is clearly deeply unfair or against public policy, considering the company’s business. LLCs can impose reasonable confidentiality and safeguarding conditions on information they must provide, in their ordinary business operations. The company must prove those conditions are reasonable if challenged.
Creditors can collect debt from partnership payments
A judgment creditor can obtain a charging order placing a lien on a debtor's transferable partnership interest. Once the partnership receives the order, it must send the debtor's distributions to the creditor. A court can foreclose if distributions will not pay the judgment within a reasonable time. The buyer gets only the financial interest and does not become a partner.
Departing partners get buyout court review
A departing partner can ask a court to review the buyout price, offsets, or purchase terms. The case must start within 120 days after payment or an offer to pay. If neither is tendered, the deadline is one year after a written payment demand. The court sets the amount and any deferred-payment security and terms. It can charge reasonable fees and expert expenses to a party acting arbitrarily, abusively, or in bad faith.
Limited partners gain collection rights, offsets
Partners and transferees entitled to a limited partnership distribution gain creditor status and creditor collection remedies for that payment. The partnership can subtract amounts the partner owes it. It can also subtract debts owed by a former partner when the payment is made on that former partner’s account.
Out-of-state businesses can withdraw with obligations
A registered out-of-state entity can withdraw through a signed statement saying it no longer does business in Utah. It must identify itself and provide an address for legal papers. Foreign corporations and nonprofits must provide their federal employer identification number; tax good standing requires paying all taxes, fees, and penalties owed to the Tax Commission. Legal papers can still be served for claims arising while the entity was registered. Registration must transfer through a signed application after a merger with an unregistered foreign entity or conversion to a foreign entity required to register.
Out-of-state businesses face filings and exceptions
Out-of-state entities required to register in Utah must submit a signed statement with required identity, formation, and address information. They must include an existence certificate dated within 90 days before filing. Registered entities must amend changed information; name or formation-jurisdiction changes require another certificate dated within 90 days before filing. Listed activities, including bank accounts, independent-contractor sales, property ownership, and interstate commerce, do not count as doing business for registration. Owning an interest or serving as a governor alone also does not count; these exceptions do not control taxes, legal service, or other regulation.
Out-of-state businesses get termination cure periods
Utah can end an out-of-state entity’s registration for fees, taxes, interest, or penalties unpaid 60 days after they are due. A report missing 60 days after it is required, or failure to keep an agent, also permits termination. An agent-name or address change must be reported within 30 days. The division’s notice must state the grounds and allow at least 60 days after delivery before termination takes effect. The entity avoids termination by fixing every listed problem before that effective date.
Outside businesses face Utah registration rules
Businesses formed outside Utah that must register cannot do business or maintain a Utah court case until they register. Differences between their home laws and Utah law alone do not block registration. Registration does not allow activities barred for the same type of Utah business. A business with a noncompliant name must adopt a compliant alternate name; that registration is exempt from assumed-name requirements. After registration, allowed names include that alternate name, its entity name with its formation jurisdiction, or an authorized assumed name.
Ownership exchanges preserve debts and cancellation options
A Utah acquired entity can abandon an approved ownership exchange before it takes effect, unless the plan forbids abandonment. It must use the approval process and submit an abandonment statement if the exchange statement was already sent for filing. When the exchange takes effect, ownership interests and governing records change as the plan specifies, and the buyer receives the specified interests. Holders keep plan and legal rights, including applicable appraisal rights, but the exchange alone creates no dissolution or liquidation rights. Earlier personal liability remains, but the acquired entity's governing law does not impose holder liability for its later obligations.
Partners gain flexibility with duty limits
Limited partnership agreements can change or remove some duties, subject to protected aspects of loyalty and care. Changes cannot be unconscionable or against public policy, authorize intentional misconduct or knowing lawbreaking, or excuse bad faith, willful misconduct, or recklessness. Courts decide legal challenges to specified partnership terms involving good faith, fair dealing, and fiduciary duties. One person can be both a general and limited partner, with each role's rights and obligations applying when acting in that role.
Partners gain records access with privacy limits
Limited partners can inspect required information without stating a purpose if the partnership receives a recorded demand at least 10 days beforehand. Other information requires a purpose reasonably related to the partner's interest and a direct connection to that purpose. General and former general partners can use agents; people under legal disability can use legal representatives, subject to applicable restrictions. Limited partnerships can impose reasonable confidentiality and safeguarding conditions in their ordinary business operations. If challenged, the partnership must prove those conditions are reasonable.
Partners leaving wrongfully face delayed buyouts
A partner who wrongfully leaves before a fixed term or project ends must wait for the buyout payment. A court can allow earlier payment if it will not cause undue hardship to the partnership's business. Deferred payments must be adequately secured and earn interest.
Partners need unanimous consent to reduce contributions
All limited partnership partners must affirmatively agree before a promised contribution can be reduced or otherwise settled. A creditor can still enforce the original promise if it relied on that promise without notice of the settlement.
Owner lawsuits face committee court review
In lawsuits brought for an LLC or limited partnership, a special litigation committee can request a pause in evidence gathering. Courts must grant the reasonably needed investigation time unless good cause supports denial. Courts review committee members’ independence and lack of personal stake, plus the committee’s good faith, independence, and reasonable care. If the standards are met, courts enforce the committee’s decision. Otherwise, courts end the pause and let the plaintiff control the case.
Business mergers carry debts and safeguards
Merger plans require approval under each entity’s governing law and rules, with statutory fallback procedures when needed. Business and nonprofit corporation owners who become personally liable after a merger must approve; foreign entities follow their home jurisdiction’s law. The surviving entity takes on property, debts, and rights, while ownership interests change as the plan provides. Owners retain only rights under the plan, governing law, and applicable appraisal rights; entity rules can limit appraisal rights where law allows, and contracts can provide them. Claimants can serve a foreign surviving entity to pursue a Utah merging entity’s debts, subject to applicable law.
Business records available with possible fees
The division must offer filed records to the public on a nonexclusive basis, in bulk or by subscription, in available formats. It may charge for bulk data and subscriptions; no fee amounts are stated here. On request, it must issue existence certificates for domestic filing entities and registration certificates for registered out-of-state entities. Requesters can rely on the certificates’ facts as conclusive evidence, subject to any limits stated in them.
Businesses can change form or jurisdiction
Domestic businesses must approve conversion plans under their governing rules or statutory fallback procedures. Owners facing personal liability for later debts must approve in a record, unless the conversion’s stated consent-or-later-joining exception applies. Entities can also move their legal home to or from Utah without changing entity type when the applicable jurisdictions authorize it. That move requires an approved plan, approval in a record from owners facing later personal liability, and a Utah filing. Its stated start time cannot exceed 90 days after filing; the entity keeps its property, debts, and continuity without winding up.
Limited partnerships get payout rules
Limited partnership recipients cannot demand a payout in property instead of money. Partnerships can distribute interchangeable property shares matching each recipient’s payout share, subject to the statutory winding-up exception. Debt payable only when a lawful distribution is possible does not count as a liability in the distribution test. If that debt was issued as a distribution, each principal or interest payment is tested as a distribution when paid.
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/ substituted
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/ uncircled
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
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