Are you ready to start a new business in Connecticut? Before opening up to the public, you’ll need to satisfy a few legal requirements. One way to protect yourself from liability and add legitimacy to your business is to form a limited liability company (LLC). Luckily, forming an LLC in Connecticut isn’t too tricky.
Here, we’ll guide you through the LLC formation process in Connecticut and show you what you need to do to get your business off the ground. Let’s get started.
The 5 steps to form an LLC in Connecticut:
To start an LLC in Arkansas, you’ll need to work with the Business and Commercial Services division of the Arkansas Secretary of State’s office. The first step is to secure a name for your LLC, followed by appointing a registered agent and filing your Articles of Organization. We’ll also go over the importance of having an Operating Agreement and how to apply for an EIN from the Internal Revenue Service (IRS).
To start an LLC in Connecticut, you must file a Certificate of Organization with the Connecticut Secretary of State.
To make the process of forming an LLC in the state of Connecticut simple, we’ve put together a step-by-step guide that details each step of the process and answers any questions.
Step 1: Name Your Connecticut LLC
Your first consideration when choosing a company name for your LLC is that it should be unique in the state of Connecticut. You can quickly and easily do a business name check on the Connecticut Business Registry Search page. There, you can verify if the business name that you want is available.
If you want to reserve a business name before forming your LLC, you may file an Application for Reservation of Name with a $60 name reservation fee. You can submit this form by mail only to the Connecticut Secretary of State’s office. Once you submit your name reservation, the government will hold the name for 120 days.
Your LLC name must end with the words “Limited Liability Company” or the abbreviations “LLC” or “L.L.C.” to comply with Connecticut law; additionally, “Limited” may be abbreviated as “Ltd.,” and “company” may be abbreviated as “Co.” According to Connecticut law, nothing in the LLC’s name can state or imply that the business’s purpose is different from the stated purpose in the LLC’s Certificate of Organization.
You may also want to check to see if your desired domain name is available. While many top-level domains exist — “.co,” “.net,” etc. — there’s nothing like getting “.com” to give some legitimacy to your business.
Finally, you should check to see whether the state and/or federal trademark is available. While you don’t need a trademark to start doing business, registering your business’s trade name and logo can help prevent other people from copying you in the future.
Plus, you don’t want to go through all of the trouble of forming your business just to learn that some company outside Connecticut already has a trademark for a name similar to your business’s — this could mean you need to rename your LLC. First, you’ll want to check if the trademark is available in Connecticut. If you plan to do business outside of the state, you should also visit the USPTO’s trademark search database to see whether anyone has already registered a trademark for your desired business name.
Note, you should also do this if you are interested in using a DBA or “Doing Business As.” A DBA is another name to use for your business, often used when a company wants to rebrand for a new product line or store. This will also need to be registered with the town clerk in the town where the business is transacted.
Step 2: Appoint a Registered Agent in Connecticut
Connecticut requires every LLC to have a registered agent for service of process. Registered agents physically accept correspondence from the Connecticut Secretary of State and any court papers on the company’s behalf. Your registered agent is an individual resident of the state of Connecticut or a business entity authorized to do business in Connecticut as long as the agent has a physical street address within the state.
Many new LLC owners think they should be their company’s registered agent and use their business’s primary location as the registered office address. However, this approach may have unintended consequences.
Some benefits of hiring an outside registered agent service include:
- Privacy: A service of process, for example, won’t be delivered to you in front of customers if you have an outside registered agent.
- Flexibility with your office: With an appointed registered agent, you can work from home and not worry about your personal address becoming public record. A registered office is also helpful if you choose to operate as a foreign LLC in other states.
- Reduced stress: With someone else handling legal documents, you don’t have to worry about missing important deadlines to remain in good standing.
Step 3: File Connecticut Articles of Organization
While known as Articles of Organization in many other states, a Certificate of Organization is a document that proves your company is a legal business entity in that state.
To create your LLC in the state of Connecticut, you’ll need to file a Certificate of Organization with the Connecticut Secretary of State and pay a filing fee of $120. You can submit the paperwork by mail or online. To complete the documents, you’ll need to know the following information:
- The name and address of your LLC and the LLC’s organizer
- The name and address of the company’s registered agent. If filing online you will also need an email address for the registered agent. Connecticut requires that the person/entity being appointed consents to being the registered agent.
- The name and address of at least one manager or member
- The LLC’s email address, if available
For those who choose to mail their Certificate of Organization, send it to:
Business Service Division, Connecticut Secretary of the State
P.O. Box 150470
Hartford, CT 06115
Step 4: Create an Operating Agreement
Much like the bylaws required by corporations, Operating Agreements outline the rules and procedures for the management of the LLC. However, unlike corporations, LLCs can customize their internal practices to fit the needs of the business. If you don’t draft an LLC Operating Agreement, background Connecticut state law applies to your company. Typical concepts in an Operating Agreement include:
- Procedures for admitting or removing LLC members
- Allocation of profits, losses, and ownership
- Management structure and voting requirements
- Dissolution and winding up of the LLC
Step 5: Apply for an EIN
Your LLC needs an Internal Revenue Service (IRS) Employer Identification Number (EIN) unless your business is a single-member LLC with no employees (and sometimes even then). Plus, you’ll typically need an EIN if you want to open a business bank account or apply for a company credit card. You can obtain an EIN by completing the application on the IRS website. If you apply online, you’ll usually get your EIN within the same day.
If your company has employees or collects sales tax, you may need to register your LLC with the Connecticut Department of Revenue Services. To see a full list of reasons you may need to register, visit the Department of Revenue Services Registration page. The registration fee depends on which type of business you operate.
Each Connecticut LLC must file an annual report with the Connecticut Secretary of State. Your annual report comes with an $80 filing fee and must be filed online.
You must file the annual report by the end of the month in which the LLC was formed. For example, if you formed your LLC on May 8, your annual report is due on May 31 of each subsequent year. If you don’t file your annual report in a timely manner, the Connecticut Secretary of State may dissolve your LLC.
How much does it cost to start an LLC in Connecticut?
The state filing fee for your Certificate of Organization is $120, and the optional name reservation fee is $60. Each year, you’ll also be required to pay $80 with your LLC annual report. Your business may need to pay additional fees for industry-specific permits and licenses.
What are the benefits of an LLC in Connecticut?
The benefits of forming a Connecticut LLC include:
- Separating your personal liabilities and personal assets from your business debts and obligations.
- Quick and simple filing, management, compliance, and administration of your Connecticut LLC.
- Easy tax filing and potential tax advantages.
How is an LLC taxed in Connecticut?
There are several business and state taxes that your Connecticut LLC will need to pay. These include taxes payable to the Connecticut government, like Connecticut sales tax and income tax.
Connecticut LLC FAQs
- What is the processing time to form my Connecticut LLC?
If you file a paper application, processing usually takes seven to 10 business days. However, if the Secretary of State is busy, it could take up to several weeks. If you file online, you’ll typically have your Certificate of Organization processed in two to three days. You can also expedite your order for an additional fee.
- Do I need to file my Operating Agreement with the state of Connecticut?
You don’t need to file your Operating Agreement, but you should keep it on file for future reference. Connecticut doesn’t require LLCs to draft or adopt an Operating Agreement. However, some states do legally require LLCs to have an Operating Agreement.
- What tax structure should I choose for my Connecticut LLC?
When you get an EIN, you’ll be informed of the available tax classification options. Most LLCs elect pass-through taxation, where the LLC’s members are only taxed once on their earnings.
- Does Connecticut allow a Series LLC?
A Series LLC has multiple series of members, managers, or LLC interests, each having separate rights, powers, or duties from members in other series of the same LLC. Each series may also have a distinct business purpose and segregate its liability from the other series in the LLC. However, Connecticut doesn’t currently permit Series LLCs.
- Which licenses and insurance are required for an LLC in Connecticut?
Your Connecticut LLC might be subject to a variety of federal, local, and statewide regulations. To see whether you need to apply for industry-specific business licenses or permits, visit AdvanceCT’s license search.rnrnTo ensure you have what you need, though, look to someone like ZenBusiness, who can provide you with a complete package of all the licenses, insurance, and permits your business requires.