Many startuppers and first-time entrepreneurs choose a limited liability company to be a legal structure for their business for the peace of mind it brings in terms of personal asset protection, as well as for the flexible tax options it offers. If you also seek to start your business under the limited liability umbrella and plan to register an LLC in Connecticut without the help of an attorney or LLC formation companies, you’ve hit the right spot. We’ve already done the research for you and made up a detailed guide on how to launch a business in Connecticut with an LLC.
Though LLC law is state-specific, it mostly varies in relation to filing fees, taxes, and reporting requirements while the key LLC formation stages are pretty much similar throughout the states and the whole process is straightforward.
Starting an LLC in Connecticut is impossible unless you select a name for your future venture since the state authorities won’t simply approve your formation docs without an LLC name. Yet, choosing the moniker for your company might appear to be a more complicated process than you think. First off, though inventing the name is mostly about your creativity and imagination, there are certain legal rules to follow to set up a catchy and permissible LLC name:
Before jumping into using the LLC name you like on business cards, advertisements, and other printouts, you have to check if this name is available in the state and can be freely used. Wonder how to make sure your chosen business name is unique? You simply need to check the name versions you have with the state regulatory body. To do a Connecticut LLC search, use the Connecticut Secretary of State business name database.
If you are lucky enough to come up with a unique company name yet are still not ready to proceed with the business formation due to some reason, you can reserve a business name in Connecticut for a period of 120 days. Putting a name on hold is as simple as it can get. Just pay a reservation fee of $60 and send an Application for the Name Reservation to a special department of the Secretary of State’s office:
By mail to the address
Commercial Recording Division
Connecticut Secretary of State
P.O. Box 150470
Hartford, CT 06115-0470
In Person
Hand it in person if you reside in Hartford:
30 Trinity St., Hartford, CT 06106
It takes the state body up to 5 days to process the application. And if you want to speed the process up, you can pay $50 more for the same-day processing.
To open an LLC in Connecticut as well as in any other state, under Section 34-243n of the Connecticut LLC Act, you are obliged to appoint a registered agent. It’s a third-party entity that will take care of communication between your LLC company and regulatory state authorities. The main requirement is that a Connecticut registered agent was the state resident physically located in the state and available within business hours on workdays so that he could personally receive important documents and correspondence meant for your LLC and eventually transfer it to you. Not only is it an obligation but also it’s a convenience since it will save you a lot of time handling that paperwork on your own. And it’s especially convenient for those companies that have their main offices in other states.
To make a registered agent in Connecticut your lawful representative in the state, you need to mention the agent in the Articles of Organization along with the agent’s signature. After filing your formation docs, this info will become publicly available. Speaking of who can be your registered agent in Connecticut, you can choose between an individual and a legal person. Though any legal entity operating in Connecticut could be your registered agent, we strongly recommend using the registered agent service for that purpose.
Today, there are many online legal platforms that provide a whole range of services in LLC formation and maintenance. Thus, they will not only file your LLC and form an eligible business entity for you but also help you keep it compliant with the state. Even if you choose to open an LLC on your own, you can contact one of these providers for Registered Agent service they deliver on an annual fee basis. Normally, it will cost you about $150 per year, which is not too much for the peace of mind you’ll get. And if you choose a service like ZenBusiness to form your business, you’ll get a whole year of the registered agent service within their $49 bundle.
In the US, any adult person over 18 years of age can function as a registered agent. Hence, many entrepreneurs often appoint their friends or relatives for that role. However, it’s better to get a person somehow connected with your business, be it an accountant, business attorney, lawyer, or somebody dealing with your LLC on a regular basis and physically present in Connecticut.
LLC formation gives your company the status of a legal person and an independent business entity. As such, the company is a separate taxpayer and needs some sort of an identifier to be distinguishable for the IRS. An Employer Identification Number or EIN functions as that identifier for business entities, similar to a social security number for physical persons. Apart from LLC tax filing, you’ll need it for many other business purposes to run a Connecticut LLC such as opening a bank account or hiring employees. So, we recommend getting an LLC EIN at the stage of business formation.
To apply for an EIN in Connecticut, you just need to submit a special regulatory form to the IRS, which is free of charge in this state. And you can do it in one of the following ways:
If you don’t mind waiting for about a month, print out Form SS-4, fill it in, and mail it to the following address:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
Faxing is a faster application method since faxed documents are processed within four days. So, print out the filled Form SS-4 and send it via fax to the following number:
(855) 641-6935
If you want to get your EIN immediately, simply fill in an online form available for completion on the IRS website from 7 am to 10 pm on workdays.
Technically, opening an LLC in Connecticut is simply about filing your business formation documents with the state. The main LLC formation document is called the Articles of Organization, Certificate of Formation, or LLC Certificate of Organization. It’s a formal document covering basic company info that will become a part of the LLC’s public record. To file the Certificate of Formation with the Secretary of State, you’ll have to pay a state fee, which is $120 in Connecticut plus $50 in extra to cut down the filing time to a single day if necessary. To submit the Certificate of Formation to the Connecticut Secretary of State, you can choose one of the following methods:
You can send your application through the Secretary of State’s website using an official Online Filing System and a Special Business Startup Tool that will guide you through all the filing steps.
If you prefer a paper form, send a printed version of the application along with the state fee payment confirmation to the following address:
Business Services Division
Connecticut Secretary of the State
P.O. Box 150470
Hartford, CT 06115-0470
Those who live in Hartford can personally hand the printed and filled application and payment to
30 Trinity St., Hartford, CT 06106
When you get back the approved version of your LLC Certificate of Formation, you can consider your company legally registered in Connecticut. Notably, this state is one of the fastest to file an LLC since the common processing time here is about 5 days as compared to several weeks in other states. And you can even file your LLC within one day by choosing expedited filing.
An LLC is a business entity independent of its owners or members. It’s a legal person with its own rights, liabilities, obligations, and commitments. And it’s advisable that you maintain this independence after CT LLC registration by separating personal and business finances and opening an LLC Bank Account. This is where you’ll need an EIN and an Operating Agreement.
To be clear, adopting an Operating Agreement is not one of the compulsory steps to form an LLC in Connecticut. At the same time, though, this document is a company bylaw essential for efficient and smooth LLC operation, especially when LLC is formed by multiple co-owners. Strictly outlining internal procedures, setting up management guidelines, and further defining the ownership rights, an Operating Agreement is yet another protective layer for members preventing internal conflicts, disagreements, and misunderstandings. At the same time, it enhances your LLC credibility with financial and regulatory institutions and agencies.
Since this document is not a must-have for LLC formation, there is no standardized legal form for it. Hence, you can write it down on your own using free operating agreement templates available online. However, given the document’s importance and the power it can have beyond relations inside the company, it’s better to be sure it is written professionally. So, you can either entrust this task to a lawyer or hire the LLC service to set up a company for you and get a customized operating agreement as a part of the formation bundle. In this concern, IncFile confidently stands out among the rivals providing both formation assistance and a draft operating agreement at no cost.
While LLC setup is a process you’ll have to pass through once, business maintenance is something you will have to do on a regular basis to keep your company in good standing with the state. Thus, there are a few other essential requirements you need to think of.
Most often than not, filing an LLC is only a formal part of starting a business. Thus, to do business in Connecticut, you might need to get LLC licenses and permits, if you plan to operate in some industries or get engaged in certain types of activities. Thus, you’ll have to obtain CT LLC licenses to sell alcoholic drinks, weapons, or gasoline, as well as to provide real estate services. The most closely controlled fields in Connecticut are healthcare, agriculture, education, aviation, the beauty industry, and all related products. The most common Connecticut business licenses and permits your company might need include a seller or reseller license, business privilege license, land use permit, home occupation permit, and signage permit. Apart from state licenses, you can also need special local permission too. To find out what licensing requirements are applicable to your LLC business in the state, check with the Connecticut Economic Resource Center.
Business taxes most companies are exposed to include federal, state, and local taxes. Boasting unrivaled tax flexibility, LLC tax filing is less tricky and complicated than that of a corporation. However, failing to pay LLC business taxes or meet the payment deadlines might result in serious penalties and fines. Hence, it’s better to be aware of all tax requirements you have to comply with in Connecticut.
Federal Taxes
Taxed as pass-through entities by default, LLCs don’t have to file federal tax reports. Instead, LLC’s incomes are transferred to the personal tax returns of their owners and are payable under the owner’s individual tax rates. You’ll only have to report income tax at a federal level if you choose a C-Corp tax status for your LLC (which is a possible option).
State Taxes
While the state income taxes are also reported on the LLC owners’ tax returns, there are certain state taxes all businesses are exposed to, irrespective of business form. Thus, in Connecticut, you’ll have to pay Business Entity Tax once in two years at a rate of $250. More than that, to be able to pay it, you’ll have to receive a state tax registration number by either submitting an application online or by mailing Form REG-1 to the following address:
Department of Revenue Services State of Connecticut
P.O. Box 2937
Hartford CT 06104-2937
As we’ve already mentioned, they are also payable at a local level or specific to some types of industries. Thus, all CT LLCs engaged in sales are levied Sales Tax along with a Use Tax if they source goods from other states. Besides, LLCs hiring employees are obliged to pay Unemployment Tax and Withholding Tax to partially compensate Social and Medicare expenses to their workers. To learn everything you need to know about LLC taxes in Connecticut, you can search through the Department of Revenue Services website.
Though the Connecticut LLC formation process might look a bit intimidating, in practice, it’s not that scary and is quite feasible. However, if you want to skip all formalities and entirely focus on business strategy and planning, you can entrust the formal part of your Connecticut startup to one of the multiple incorporation services you will find in our Best LLC Formation Services guide. And if you need a quick recommendation, you can’t go wrong with the Inc Authority that will set up an LLC at the cost of only a state fee and provide a free registered agent for a whole year.
