Structuring your new Connecticut business as a limited liability company (LLC) can help you protect yourself in the event of legal troubles. It also simplifies doing your business taxes.
In this guide, I’ll cover the key steps you need to take to get your LLC officially registered. I’ll also walk you through important points that will set your business on the road to success.
6 Steps to Start an LLC in Connecticut
1. Name Your LLC
Before you can get started with the paperwork to register your LLC, you need to choose a business name.
Connecticut law requires LLC names to clearly indicate that they are an LLC, by including the words “limited liability company,” “LLC,” or “L.L.C.” You can also shorten “limited” and “company” to “Ltd.” or “Co.” respectively.
Your business name also cannot currently be in use by another Connecticut business. You can check whether it's available by using the Connecticut business records search engine.
If you want to guarantee that your chosen name is available when your formation paperwork is reviewed, you can reserve your name by completing an Application for Reservation of Name form. This form costs $60 to file and reserves your name for 120 days.
You should also consider buying a domain name at this stage.
2. Appoint a Registered Agent
Every LLC in Connecticut is legally required to have a registered agent. A registered agent is an individual or business entity that is authorized to receive legal documents on behalf of your LLC.
Your registered agent can be any of the following:
- An individual with a permanent address in Connecticut (including yourself or a member of your LLC).
- A Connecticut-based business that offers a registered agent service.
- A foreign business with a certificate of authority to conduct business in Connecticut.
3. File a Certificate of Organization
To officially register your Connecticut LLC, you need to prepare and file a Certificate of Organization with the Connecticut Secretary of State. You can do this either online or by mail. In either case, the filing fee is $120.
For your Certificate of Organization, you’ll need to fill out the following basic information about your LLC:
- The name, address, and signature of your LLC’s organizer.
- The business name and address of your LLC.
- Your registered agent’s name, address, and signature.
- Your LLC’s email address.
- The name and address of at least one manager or member of your LLC.
4. Write an Operating Agreement
While an operating agreement isn’t a legal requirement for LLCs in Connecticut, I strongly recommend drafting one for your business.
An LLC operating agreement is an internal document that establishes how your business will be run. In this document, you can lay out your company’s financial and functional rules, regulations, and provisions. This will help you resolve future conflicts and guide how you’ll move forward if a member of your LLC wants to leave.
By having an operating agreement in place, you can help preserve your limited liability by proving that your LLC is a separate business entity. In the absence of such an agreement, Connecticut state LLC law will govern how your LLC must operate.
5. Obtain Connecticut Licenses and Permits
Every LLC in Connecticut is required to have a CT Business license to do business in the state. You can apply for one with the Secretary of State.
Additionally, you may need certain local and state licenses before you can start legally doing business in Connecticut. The Connecticut Economic Resource Center can help advise you on the types of licenses your business may need.
Some common examples of licenses businesses need include:
- Sales tax permit
- Food service permit
- Liquor license
- Zoning permit
- Health department permits
6. Get an Employer Identification Number (EIN)
If your LLC has more than one member, you need to apply for an Employer Identification Number (EIN). You can do this for free by submitting an online or mail application with the IRS.
If you're running solo, an EIN isn’t a must, but it could be worth having as it can help you keep your personal and business finances separate. It also allows your LLC to file taxes as a company, open a business bank account, and hire employees when you need to.
The Next Steps After Forming an LLC in Connecticut
Once your LLC is officially established, these steps can help your business smoothly.
1. Set Up Your Payment System
The most important step for any business is to have a way to accept customer payments.
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2. File an Annual Report
In Connecticut, all LLCs need to file an annual report with the Connecticut Secretary of State. You need to submit this report between January 1 through April 1 the year after your LLC is formed.
You can file this report online on the Secretary of State’s website, and the filing fee is $80.
3. Pay Your State Taxes
For tax purposes, LLCs can be treated as a sole proprietorship, partnership, S-corporation, or C-corporation.
If you opt to be taxed as a C-corporation, your LLC will be subject to 7.5% Connecticut corporate income tax. All the other types are subject to a 6.99% Connecticut pass-through entity tax.
If your LLC will be selling goods and collecting sales tax, or if you have employees, you’ll also need to register with the Connecticut Department of Revenue Services.
The Bottom Line
Setting your business up as an LLC can offer you protection for your personal assets in the event of debts or lawsuits. Follow the six steps discussed in this guide to officially form your new Connecticut business entity in just a few days.
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