Utah enacted its first LLC statute in 1991. After several revisions the initial statute was replaced in 2001 with the Utah Revised Limited Liability Company Act (RLLC Act). The RLLC Act is found at Utah Statutes Title 48, Chapter 2C.
Effective January 1, 2014, Utah adopted a new limited liability company act, the Utah Revised Uniform Limited Liability Company Act (RULLC Act) Utah Statutes Title 48, Chapter 3A which applies to all new Utah LLCs formed after January 1, 2014. The New RULLC Act will eventually replace the previous limited liability company act, or Utah Revised Limited Liability Company Act.
For a two year period, between January 1, 2014 and January 1, 2016, companies formed prior to January 1, 2014 may opt in to governance under the new RULLC Act but they are not required to do so. Effective January 1, 2016, all Utah LLCs will be governed by the new RULLC Act.
To state the obvious, the general provisions that apply to Utah LLCs are in flux. The approach to record keeping by the two Acts is very different.
The record keeping requirements of the earlier RLLC Act, found at 48-2C-113, specifically lists various documents which must be kept. It also requires that all documents be kept that deal with certain identified subject matters.
The record keeping requirements of the new RULLC Act, found at 48-3A-410 are much broader and generalized. The new Act entitles the member to "any record maintained by the limited liability company regarding the limited liability company's activities, affairs, financial condition, and other circumstances, to the extent the information is material to the member's rights and duties under the operating agreement or this chapter" 48-3A-410 (1). For a manager-managed LLC the standard is even broader "a member may inspect and copy full information regarding the activities, affairs, financial condition, and other circumstances of the limited liability company as is just and reasonable. . ." 48-3A-410 (2).
While the new Act on its face does not require that any particular documents be kept, to supply the information required to be furnished, at a minimum the documents which were earlier identified should be kept because they contain the type of information likely to be requested. Additionally any document containing information that the LLC perceives to be relevant to a reasonable inquiry of a member should be kept.
Best Practices for Record Keeping for a Utah LLC
The following records should be kept by any Utah LLC.
Formation and Organization Documents
1. A copy of the Articles of Organization (RLLC Act) and all amendments to it, or the Certificate of Organization (RULLC Act) and all amendments to it; (RLLC Act 48-2C-113 (2)(b) "a copy of the stamped articles of organization and all certificates of amendment thereto, together with a copy of all signed powers of attorney pursuant to which the articles of organization or any amendment has been signed;")
2. A copy of all written Operating Agreements ever used. (RLLC Act 48-2C-113 (2) (f) "a copy of the company's operating agreement, if any, and all amendments thereto ;")
Correspondence with the State
1. Any document filed with the State concerning the LLC;
2. Any document received from the State concerning the LLC.
1. A copy of all federal, state, and local income tax returns for each year; (RLLC Act 48-2C-113 (2) (d) requires three years)
2. A copy of any financial statements from at least the last three years. (RLLC Act 48-2C-113 (2) (e))
Documents Related to the Internal Operation of the LLC
1. A copy of the minutes, if any, of each meeting of members and of any written consents obtained from members;
2. Any document which discusses the amount of capital contributions of each member in terms of cash or agreed value of other property or services contributed; (RLLC Act 48-2C-113 (2) (h) (i))
3. Any document which discusses the details of events, times, or other agreements made for further contributions to be made from members, if any; (RLLC Act 48-2C-113 (2) (h) (ii))
4. Any document which discusses the share of profits and losses due each member;
5. Any document which discusses any right of a member to receive distributions of funds;
6. Any document which discusses any right of a manager to make distributions of funds to a member;
7. Any document which discusses each member's respective voting rights;
8. Any document which discusses the details of events that would cause the LLC to be dissolved and its affairs wound up, if any. (RLLC Act 48-2C-113 (2) (h) (v))
Records of Members and Managers
1. A current list of the full names and last known address of all past and present members.
2. A current list of the full names and last known addresses of all past and present managers.
Other LLC Business-Related Information
Under the new RULLC Act, the LLC should maintain any record which contains information about LLC business "activities, affairs, financial condition, and other circumstances" material to a member's rights and duties.
Location of Records
The above documents and records should be available at the principal business office maintained by the LLC within the State.
Form of Records
The documents and records may be maintained either in hard copy or electronically, as long as the electronic version can be printed within a reasonable period of time.
The above records are just the documents and records that are required to be kept as to the form of business. Many other records, for example records required to prepare tax returns, records required to be kept on employees, etc., are also required to be kept by an LLC, just as they are required for businesses operating in other forms.
The After Incorporation Tools
After Incorporation's tools are specifically designed to aid companies to comply with these requirements. Using our tools, your records are not only organized properly, but they can easily be made available to your Members and others required to be given access under these laws. You will also find the forms and templates you need to create the documentation to meet these requirements.