How to Start a Collection Agency in Utah: What Ended With Registration and What Still Applies

Searches for a Utah collection agency license still turn up guides describing a state registration and surety bond. Those requirements no longer apply. House Bill 20 (2023) took effect May 3, 2023, and the Division of Corporations and Commercial Code says it no longer requires collection agencies to apply for the registration or submit the bond. What remains is ordinary business formation, a city or county business license, a fee rule in Utah Code 12-1-11, and federal debt collection law. This guide walks through that sequence in order.

This article is informational content, not legal or tax advice. Collection law carries real penalties for mistakes, so have a Utah attorney review your letters, call scripts, and fee practices, and have a CPA review your tax setup before you open.

What Changed and What Did Not

House Bill 20 repealed Utah Code 12-1-1 through 12-1-10, the sections that required collection agencies to register with the state and post a bond. Do not pay anyone for a state collection agency registration, and do not post a bond with the state. If a website, vendor, or older form tells you to, it is describing the law as it stood before May 3, 2023.

Four things still apply:

• You register your business entity or business name with the Division of Corporations and Commercial Code.
• Your city or county business license, which Utah requires separately from any state filing.
• Utah Code 12-1-11, which limits the collection fees and convenience fees that creditors and third-party collectors may charge.
• Federal law for third-party collectors, including the Fair Debt Collection Practices Act and CFPB Regulation F.

Materials You Need Before You Start

• A business name you can use in every letter, call, and court filing, that is distinguishable on Utah's records
• A decision on entity type: limited liability company, corporation, or sole proprietorship
• A registered agent with a Utah street address
• A UtahID login for the Utah Business Registration System
• A federal Employer Identification Number from the IRS
• A business bank account separate from your personal accounts
• A written fee schedule you can check line by line against Utah Code 12-1-11
• Collection letters and call scripts reviewed against federal rules

Step 1: Confirm the Requirements That Have Ended

Check the Division's current guidance at commerce.utah.gov/corporations before you spend money. Confirm that no state collection agency registration or bond is requested. If a form or vendor asks for one, stop and verify with the Division before paying. Save a printout or screenshot of the page with its date, so your records show what you relied on.

Step 2: Choose Your Entity and File the Formation Document

A limited liability company is a common choice for a small agency because it generally separates business debts from your personal assets. An LLC files a Certificate of Organization for $59. A corporation files Articles of Incorporation for $59. A sole proprietorship has no entity filing with the Division, though a trade name needs a DBA registration (see Step 6). Settle the structure with your attorney and CPA, because the choice affects both liability and taxes.

Filing	Cost	Renewal or notes
LLC Certificate of Organization	$59	$18 annual renewal
Corporation Articles of Incorporation	$59	$18 annual report
Assumed name (DBA) registration	$22 to register	a renewal fee (check the Division's DBA page for the current fee and term)
Name reservation	$22	Holds the name for 120 days
Expedited processing	$75 per filing	Optional, for a faster turnaround
Commercial registered agent	$52	Registration cost

Online filings are usually approved right away. Filings that need manual review take 2 to 4 business days, and the Division has posted 7 to 10 business days during backlogs. Confirm the current processing times on the Division's site before you plan a launch date.

Step 3: Pick a Name the Division Will Accept

An LLC name must contain “limited liability company,” “limited company,” “LLC,” “L.L.C.,” “L.C.,” or “LC.” You may abbreviate “Limited” as “Ltd.” and “Company” as “Co.” The name must be distinguishable from existing entity, reserved, registered, and assumed names on the Division's records, and it may not suggest that your company is a state agency or political subdivision. Federal law also requires a collector to use its true business name, so choose a name you can use in every collection communication. If you need time to finish paperwork, a $22 name reservation holds the name for 120 days.

Step 4: Appoint a Registered Agent

Every registered entity must name a registered agent for service of process, and a Utah street address is required. A PO box may be listed only in addition to a street address. The agent can be an individual, a business in good standing with the Division, or a commercial registered agent, which costs $52 to register. Appointing an agent is your affirmation that the agent has agreed to serve. Choose someone who can accept legal papers during business hours, because a missed lawsuit notice is one of the most expensive mistakes a collector can make.

Step 5: File Online With the Division

Log in to the Utah Business Registration System at businessregistration.utah.gov with your UtahID. Enter the entity details, the registered agent, and the name. Most online filings are processed and approved instantly. Print the approved Certificate of Organization or Articles of Incorporation and keep it with your formation records. The renewal obligation that follows is covered in Step 11.

Step 6: Register a DBA With the State, Not the County

If you collect under a name other than the legal name on your entity filing, you need an assumed name (DBA) registration. The Division of Corporations and Commercial Code handles assumed names statewide. Do not file one with a county, because that is the wrong office. A DBA costs $22 to register, with a renewal fee (check the Division's DBA page for the current fee and term).

Step 7: Get Your Local Business License

Utah issues no statewide general business license. A city or town license applies inside its limits, and a county license applies outside them. Apply where your business is located or operating. A city license does not transfer to another city, so if you move your office across a city line, you need a new license there. Confirm the fee and any zoning or home-office rules on the local agency's page, because this guide does not state them. Also check with the Division of Professional Licensing (DOPL) on whether any occupational license applies to your work or staff. Do not assume the answer either way.

Step 8: Set Up Your Tax Registrations

An LLC is taxed by default as a partnership or sole proprietorship. Income passes through to the members and is taxed at Utah's flat individual income tax rate (4.45 percent for tax years beginning on or after January 1, 2026). An LLC that elects corporate treatment pays the 4.45 percent corporate franchise and income tax, with a $100 minimum tax. A corporation files form TC-20 and pays the same 4.45 percent rate with the $100 minimum. For an LLC, the only recurring state filing cost is the $18 annual renewal.

A Utah Sales Tax License from the State Tax Commission is required for any seller with an established presence in Utah. Most collection services do not sell taxable goods, but confirm that with the Tax Commission at tax.utah.gov before you assume you are exempt. If you do need a sales tax account, you register through the Tax Commission's TAP system.

Step 9: Build Your Fee Rules Around Utah Code 12-1-11

Utah Code 12-1-11 limits the collection fees and convenience fees that creditors and third-party collectors may charge. It is the main Utah collection rule that remains after HB 20, so it deserves a line-by-line review. List every charge your business adds to a balance, including payment processing or convenience charges, and have counsel map each one to the statute's current text. This guide does not state a specific dollar or percentage limit. Read the current statute and confirm the limit with your attorney rather than copying a figure from a blog.

Step 10: Apply the Federal Rules

Third-party collectors are subject to the Fair Debt Collection Practices Act and CFPB Regulation F. These rules govern what you may say, when and how you may contact people, which disclosures you must give, and how you handle disputes and records. Creditors collecting their own accounts are generally outside the federal definition of a debt collector, but Utah's fee rule in Step 9 still applies to them. Write your procedures before your first letter goes out, and include at least these:

• A validation notice template that you can send within the timeframe the rules require
• A statement that you are a debt collector attempting to collect a debt
• A dispute and cease-communication procedure with a named owner
• A call log and a record retention policy

Step 11: Calendar Your Annual Renewals

An LLC or corporation files an annual renewal at $18 each year, due one year from its registration date and every year after. The renewal window opens 60 days before the anniversary date, and a late renewal fee of $10 applies. An assumed name renews at $18 per year. Put each date on your calendar the day you receive your filing, because a missed renewal costs more than the late fee once it affects your banking and contracts.

Common Mistakes to Avoid

• Paying for a state collection agency registration or posting a bond. Neither is required.
• Filing an assumed name with a county instead of the Division.
• Assuming a city license covers a new office in another city.
• Assuming Utah has a statewide general business license.
• Adding convenience fees without checking them against Utah Code 12-1-11.
• Choosing a name that suggests a government agency.
• Naming a registered agent without a Utah street address.
• Missing the annual renewal window.

Tips for a Cleaner Start

• File online whenever you can. Approval is usually immediate, while manual reviews take 2 to 4 business days.
• Before you finalize your structure, ask for a free counseling session through the Utah Small Business Development Center or review the Utah resources on the SBA Utah district page.
• Keep a dated copy of every fee schedule and collection template, so you can show what you were doing if a question comes up later.

Expected Results

Once your entity filing is approved and your local license is in hand, you should be able to begin operating within the Division's processing window. That window is usually immediate for online filings and may run longer if a manual review or backlog applies. Your recurring state costs appear to be modest: the $18 LLC renewal, the $18 DBA renewal if you use one, and whatever city or county license and tax costs you confirm locally. Collection outcomes are less predictable. Careful compliance with the federal rules and Utah Code 12-1-11 may reduce the risk of complaints and disputes, but no filing guarantees that result, and your attorney should set expectations for your specific portfolio.

Next Steps

Confirm that no state registration or bond applies, file your entity and any DBA with the Division, secure your city or county license, and write your fee and collection procedures before your first account. Use the Division's page and the Tax Commission to verify current figures. For anything involving collection letters, fee charges, or litigation, ask a Utah attorney who practices debt collection law, and have a CPA review your entity choice and tax registrations.