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:
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.
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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.
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.
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.
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:
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.
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:
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.
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.
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.
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.
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:
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.
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.
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:
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.
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.
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:
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:
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.
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.
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.
A limited liability company is a welcoming legal structure for many businesses. Start an LLC is easy. Select your state to start.