How to Start an LLC in Connecticut: Cost and Registration Steps

Though Connecticut is not among the top ten states to initiate a business, it has greatly changed over the last few years and experienced a boost in small business engagement and maintenance. Being smaller in size than other more advanced US states, Connecticut boasts a diversified market and ensures a stable business climate and favorable economic regulations. To achieve success, you just need to pick the right activity and create a detailed development plan.

The state government in its turn provides active support to varying business initiatives and all types of industries to help enterprises make the right start, gain their foot, and thrive. On the state website, you can learn everything about state-maintained business programs, industry-specific resources, appropriate financial assistance, and valid tax incentives.

In the meantime, your best business opportunities in Connecticut today fall within the following areas:

• Tourism and related services;
• Advertising, billboard business, and digital marketing;
• Farming;
• Processed food production;
• Teaching and educational initiatives;
• Brewing;
• Private security services;
• Car maintenance and repairs.

Most likely than not, a limited liability company will be the best legal framework to maintain your Connecticut venture. Wonder how to get an LLC in Connecticut? We’ve already done the preparation legwork for you and created a comprehensive filer’s guide. Below, you’ll find a detailed description of the Connecticut LLC registration process and discover the next steps to take once you open an LLC in Connecticut. Or you can go the easier way and choose best rated online LLC formation service from our TOP and delegate all the process to professionals.

What Is an LLC in Connecticut?

A limited liability company is a relatively new business form as compared to other legal structures. However, it has quickly become popular and keeps gaining pace thanks to its hybrid nature that hits the best of corporations and disregarded entities.

In Connecticut as well as in other states, LLCs make a great starting point for smaller private entities and serve as a solid base for bigger companies seeking to further expand their footprint. The best thing about an LLC structure is that it’s capable of maintaining growing business potential while offering smaller projects the perks of a big business.

With an LLC, you won’t be directly associated with your enterprise at a legal level. Your entity will exist independently as a legal person and has its own rights and commitments. Meanwhile, you won’t be personally responsible for the business liabilities, and your funds and property won’t be used for settling financial and other business problems.

Something else you can’t but like about your Connecticut LLC is the tax flexibility it brings. LLCs are taxed as pass-through entities by default and are free from paying corporate income taxes. At the same time, though, you have an opportunity to select a corporate tax status for your business to reduce the tax burden on an increasing income.

No matter how you slice it, an LLC structure is an optimal choice for many business initiatives and projects. Though this entity requires state registration, it’s much easier to file than a corporation. And our step-by-step guide will take you through Connecticut LLC registration to make this process a doddle for you.

In-Depth Instructions on How to Start an LLC in Connecticut

Formally, creating an LLC in Connecticut is as simple as getting your organizational documents approved by the state. The whole process is pretty standard across the US. At the same time, in practice, it’s much more than that since there are certain preparation steps that precede filings and make it possible as well as there are certain post-formation moves you should take into account.

Besides, LLC laws are state-specific and each state might have minor regulatory nuances that turn out to be meaningful and important in the end. Our instructions give consideration to all those aspects and put them in due order.

1. Pick a Name for Your Connecticut LLC

Strange though it might seem, an LLC starts with a name. Unless your name will be acceptable and compliant with the state naming rules, your filing application won’t be accepted and reviewed by the Connecticut state regulator. Actually, an inappropriate business name is one of the most often reasons for LLC application rejection.

Your Connecticut LLC name could be anything you want to the extent it complies with the naming requirements set forth by the state. Those rules are not too strict or limiting without a cause, yet, there are peculiarities to match to make your business name acceptable and eligible.

Guidelines to Observe When Naming Your Connecticut LLC

There are a few rules you need to keep in mind when inventing a name for your future LLC. In Connecticut, LLC naming rules are stipulated in Chapter 613a of the Uniform Limited Liability Company Act. In brief, they come down to the following main points:

• Mind using a business entity designator, i.e. the words “Limited Liability Company”, “Limited”, or “Limited Liability Co.” or abbreviated forms such as “LLC”, “Ltd.”, “Co.”;
• Avoid any confusion with other entity types such as corporate and government entities. With that, the words “Incorporated”, “Inc.”, “department”, “agency”, “bureau”, etc;
• References to educational and financial institutions are also not allowed unless you have specific permission for that from the appropriate governmental authorities; 
• The use of certain words in business names is strictly banned. These are rude, abusive, humiliating, insulting, and politically incorrect words. Any words and phrases implying racism, intolerance, or aggression as well as foul language are also prohibited;
• Steer away from mentioning professions in your LLC moniker (engineer, architect, doctor, constructor, pharmacist, etc.) unless you have a professional license or any other document entitling you to use professional designators;
• Create a distinguishable name that will be like no other already registered company moniker. Note, though, that by simply changing word forms, introducing plurals, articles, conjunctions, punctuation marks, or abbreviating existing names, you won’t make them unique. They’ll still be treated as similar by the state. Hence, refrain from trying to modify popular company or brand names. 

Doing a Business Name Search in Connecticut

How do you know that an invented LLC moniker is good for filing in Connecticut? Even if you’ve observed all the above-mentioned rules, there is no guarantee the desired version will be accepted by the state office.

Hence, before you make the name a part of your LLC statute, you need to check its availability in the state of Connecticut. This process will take mere minutes and save you the risks of the trial and error method.

To make sure the name option you have in mind is available, you can use a free Business Entity Records search on the official website of the Connecticut Secretary of State. What’s more, you can search through not only the business database but also the trademark database and even monitor an appropriate domain name availability.

Should a name you want appear available, you have a chance to put it on hold until you are ready to file. You can reserve a moniker online or via mail for a period of 120 days by paying a fixed fee of $60.

How to Come up With an Original and Unique Name for Your LLC

Your future LLC name is much more than just a formality. It’s a tool that will help you create your business identity, introduce your entity to the market, and make it stand out among your rivals. Hence, it’s advisable that you do your best to pull off a name that will work for you afterward.

We have a few simple yet handy tips that will help you come up with a distinguishable and memorable business name that will comply with the current state naming rules:

• Seek to replace common and widespread words with synonyms that circulate less often;
• Feel free to add foreign words that will bring a kind of zest to your name and make it different;
• Literature, geographical, artistic, and scientific terms also add some special flair and help to make the name unique;
• Go for acronyms and extraordinary word combos or abbreviations that will let your company name sound like no other.

All in all, you can unleash your imagination and go creative when mixing a company name, yet, don’t go overboard and avoid using too intricate, complicated, and elaborate words that will sound weird and might be hard to understand. Instead, try to refer to your company values or somehow align the name with your future activities.

When it comes to your personal name or location, you are not restricted in building it into the company moniker. It’s by far the easiest way to make your LLC name unique. That said, it might limit your LLC's potential for expansion, should you decide to invite new partners or extend your activity to other localities. So, be careful with that.

Operating Under a Fictitious Name in Connecticut

One more option you have for a company name at a legal level is a DBA. Connecticut state law allows LLCs to operate under different names on the market. You can use a so-called fictitious, assumed, trade, or DBA (doing business as) name instead of a registered LLC name.

With a DBA, you are not required to use an LLC identifier that makes a name more harmonious and apt for a brand name. Besides, you can have more than one DBA that gives you an opportunity to launch several product or service lines and run different types of activities under the legal shelter of the same LLC. Finally, DBAs will let you expand your business without going into multiple entities.

DBAs are filed locally. You should submit an application to your CT town clerk and pay a filing fee of $10 per single DBA. Note, that each fictitious name you are going to use for your LLC should be registered separately.

2. Find a Registered Agent for Your Connecticut LLC

Appointing a registered agent is the next step on your way to forming an LLC in Connecticut. It’s a law requirement you can’t skip and should observe not only to register an entity but also to keep it afloat and compliant. Here is why.

Technically, the agent’s function is to simply receive your legal mail or service of process and hand it to you. As such, it maintains consistent and stable communications between your LLC and state or public authorities. Yet, the main agent’s role is bigger than that.

The service of process is the business and legal correspondence that covers tax notes, filing requests, court summons, lawsuits, and any other notifications and letters from governmental, financial, and public entities that might require some actions or immediate response from your side.

Should you fail to receive or respond to some of those letters, you might lose a lawsuit or put your good standing status at stake. Hence, an agent rep stands on guard of your business compliance by making sure you get your vital mail in time.

Representative Agent Alternatives in Connecticut

First and foremost, there are certain agent requirements to be observed, though they are quite liberal. You can appoint any adult person or legal entity with a registered address in Connecticut. The biggest rule is that an agent should be present under the specified registered address during business hours, i.e. from 9 a.m. to 5 a.m., on weekdays to obtain regular or express correspondence in person.

With that, you are free to delegate this task to a family member, friend, neighbor, or colleague. More than that, you can even be your own registered agent and handle this function by yourself, the law doesn’t restrict you in that.

Many businessmen-to-be choose to make their attorneys, lawyers, accountants, or tax advisors their agents or hire a professional registered agent service to tackle that job.

Whatever your choice, your chosen person or entity should give you consent to serve as your rep and sign the Application of Consent to be attached to your formation documents. Otherwise, the filing won’t be accepted.

Being Your Own Agent vs Hiring a Third Party

First-timers and startuppers often hesitate between hiring an agent and performing this function on their own. Being your own agent seems a straightforward and no-frills choice, which is really so. You don’t have to agree on anything with anybody. You are the one responsible for your mail and can rest assured your sensitive letters are protected and kept confidential. And, what’s most important, you don’t have to pay anyone for the service, which is the prime reason for beginner entrepreneurs.

In the long run, though, it’s not the best option, and engaging a third party for the agent’s job is a more reasonable decision that will justify all possible inconveniences and added costs over time. The benefits it offers are hard to argue:

• You’ll keep your personal data away from the public since its’ your agent’s data that will appear on public records;
• You’ll get complete flexibility in planning your time and business or leisure schedules since you won’t be bound to your office most of the time;
• You won't’ have to handle and regularly sort out piles of junk mail to pick crucial letters among advertisement leaflets, promotional brochures, and other scams;
• There will be a lower risk of missed or lost mail since it will be the agent’s obligation to keep an eye on that;
• To avoid disclosing your home or office address, you can use your agent’s address for LLC registration. 

When selecting an independent candidate for your LLC agent, give preference to a dedicated agent service. At a reasonable price ($50-$150 a year), you’ll get complete peace of mind and rest assured that your crucial correspondence is handled by professionals. One more plus about this option is that special agent services usually have nationwide networks and will cover your needs anywhere in the US.

3. File Your LLC Statute in Connecticut

Once you’ve checked your future LLC name and have a Name Reservation Form at hand (if applicable) along with a signed agent’s Application of Consent, you are ready to file your Connecticut LLC and can proceed to state registration.

LLC filing per se is about submitting the Articles of Organization or Certificate of Organization with the Secretary of State. This rather simple basic document is what legally brings your entity to life and enforces the legal benefits it offers.

Quite a formality at a glance, an LLC statute is your business passport and the only official document that makes your company legally existent. So, take it seriously and stick to the state-specific laws when compiling your Certificate of Organization in Connecticut.

What to Include in Your Connecticut LLC Statute

An LLC statute is more or less a standard document across the states that enlists basic company info to be further entered into the state registries and official business databases. At the same time, though, it might slightly vary from state to state. In Connecticut it calls for the following data:

• Your future LLC name in full;
• Your LLC principal office address. It should be a registered address in Connecticut, another state or even country, your home or office address, virtual office or mailbox rental address, or your agent’s address. No P.O. boxes are allowed;
• Your company mailing address that could be different from or the same as the above principal office address;
• Your representative agent’s data including name and address. Note that a rule of thumb for an agent is a physical registered address in Connecticut. No other address options are acceptable;
• Your LLC member and manager names and addresses. Here, it’s enough to mention at least one principal’s data, preferably those of a business owner;
• Brief description of your future LLC’s activity mentioning that it won’t breach any valid laws;
• A statement that your LLC is a member-managed or manager-managed entity.

How to Register Your LLC Statute in Connecticut

Connecticut used to have three filing methods including online, mail, and in-person document submission. Currently, due to pandemic limitations, walk-in document submission is not available. So, there will be two filing options in front of you.

To file online and complete a digital application form, first, you’ll have to sign up on the Connecticut Secretary of State’s website and log into your personal online account. Note that as soon as you submit an online form, your registered agent will get a link via email or SMS they need to click to confirm their acceptance within 72 hours. Should your rep fail to do so, your application form won’t be approved.

If you prefer tried-and-tested mail, you should download the statute form, fill it out, print it, and thoroughly check for any mistakes. Make sure you attach the signed Application of Content from your agent and a Name Reservation form if you’ve your business name version on hold. Send a whole document pack to the following address:

Business Service Division, Connecticut Secretary of the State

P.O. Box 150470

Hartford, CT 06115

Normally, it takes the regulator up to 3 days to consider online applications and up to 10 days to review and approve mailed papers. Expedited filing is also available at an added cost.

Approved online forms are sent back to your email while the mailed papers are mailed back accordingly.

4. Compile an Operating Agreement for Your Connecticut LLC

Technically, your Connecticut LLC registration process is over as soon as you get your state-approved LLC statute. Yet, you shouldn’t disregard the company bylaws that function as a key internal regulation tool. 

An Operating Agreement is an LLC bylaw that is not a legal requirement in most states including Connecticut. In other words, it’s optional and you don’t have to file it with the state. However, if you seek efficient ongoing LLC operation and want to have full control of your business which is run under your own rules, it’s advisable that you draft and sign an Operating Agreement at the filing stage.

Bylaw Benefits

This document outlines the internal agreements and covenants of the LLC owners. As such, it should be executed and signed by all company members to be enforced, with no state registration required.

The benefits an Operating Agreement provides for the LLC operation and management are hard to argue and fully justify the effort it will take you to write down the instrument:

• By stipulating and describing the LLC manager and member powers, duties, and right in detail, an Agreement will ensure a smooth and problem-free decision-making process and prevent any unwanted internal disputes and misunderstandings that might adversely impact some vital internal procedures and actions;
• An Agreement is prioritized over default laws that will not only give you some kind of advantage in court but also enable you to govern your enterprise your way instead of sticking to generic rules that might be not good for your business situation;
• This document will further enhance your business reliability and solid reputation in the eyes of investors, creditors, vendors, suppliers, and customers since it maintains the corporate veil protections and shows that you treat efficient business management seriously.

Bylaw Provisions

When it comes to the Operating Agreement content, it’s up to you and your business partners to decide what points it should cover for your Connecticut LLC. However, there are certain common provisions that are vital for any LLC:

• Your LLC’s ownership and management structures and making changes in them. i.e. introducing new members or managers and resigning or expelling the existing ones;
• The rights, authorities, commitments, and responsibilities of the company managers and members in relation to routine business operations and crucial decisions;
• Voting issues and voting rights;
• Internal operational procedures and regularities;
• Profit distribution principles;
• The algorithm and instructions for LLC dissolution;
• Operating Agreement amendment rules. 

5. Obtain a Federal Tax ID for Your Connecticut LLC

To pay taxes and identify themselves as taxpayers, individuals receive Social Security Numbers. LLCs are required to pay taxes as legal persons and should identify themselves as taxpayers as well. This is why an LLC needs a federal tax ID or an Employer Identification Number (EIN).

Single-member LLCs can rely on the Social Security Number of their owners while multi-member LLCs are obliged to get an EIN. However, there is more than one practical reason for any type of LLC to obtain an EIN right after formation.

You won’t be able to open a business bank account, hire employees, pay some types of taxes, or apply for an S-Corp tax status without an EIN. Most likely than not, you will need this tax code when applying for business credit or loan to raise funds and maintain your entity's growth.

Acquiring an EIN in Connecticut is a breeze. It’s issued by the Internal Revenue Service free of charge. You just need to complete an online form and wait for about five minutes to get your number back. So, don’t put this task on the back burner.

Connecticut LLC Cost: How Much Is an LLC in CT?

A standard LLC filing fee in Connecticut is $120. It’s the cost of regular filing that will be processed within 3 to 10 days depending on the registration method you choose.

Online filings are faster and engage no added costs while mail filings are slower and will incur an added $40 fee for the state to send you back the originals of your docs.

Connecticut State Office also offers an expedited filing option and can approve your LLC statute within 24 hours at $50, no matter the filing method.

There is a little trick, though, that will enable you to save $80 if you plan to form your Connecticut LLC at the end of the year. Push your filing date from November or December to January, and you’ll move an $80 annual report payment to the next year.

Tasks to Complete After Forming an LLC in Connecticut

Setting up an LLC in Connecticut is not enough to lawfully run your business in the state. There are a few compulsory post-formation tasks you should complete. By and large, they refer to the business maintenance and compliance spheres.

Maintenance Aspects

• Business insurance: To ensure an added protective shield for your newly formed entity against potential risks related to emergency situations or certain damages, consider getting appropriate insurance policies for your LLC. Most common types of insurance for enterprises include general liability insurance, business income insurance, professional liability insurance, and workers’ compensation insurance;
• Separate bank account: It’s something you should do by default to split your own and business assets. Not only will it make accounting easier and more convenient but also it will further fortify your liability protection and make it easier to raise funds for business via different external resources.

Compliance Criteria

• Filing taxes: LLCs are pass-through entities free from paying corporate income taxes. Company incomes will be taxed under your own tax return and those of other owners. However, depending on the activity you run and the locality you operate in, your company might be exposed to other taxes such as sales and use tax, payroll taxes, property taxes, etc. Contact the IRS and consult with your business accountant to figure out all charges you’ll have to pay; 
• Submitting an annual report: All Connecticut LLCs should file state reports once a year to update their company info. The filing date is your LLC anniversary and the filing cost is $80. Notably, Connecticut entities are also required to report their NAICS codes to be properly classified by the state for statistical purposes. You can get your code here;
• Licensing: Licensing requirements are pretty strict across the states and Connecticut is not an exception. There are industry-specific and area-specific licenses as well as state licenses, and you might need more than one for your Connecticut LLC. It’s a rather sensitive and complex issue for beginner entrepreneurs. On the Connecticut Government webpage, you can find helpful resources to check for a list of permissive documents you need and authorities you should contact for registration.

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