How to Form an LLC in Connecticut in 7 Steps
By Catherine Hodder, Esq. | Legally reviewed by Jordan Walker, J.D. | Last reviewed May 24, 2024
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Limited liability companies (LLCs) are a type of business structure that is popular with small business owners. If you would like to benefit from the personal liability protection and simplicity of a Connecticut LLC, follow along with the step-by-step guide below.
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7 Steps to Form an LLC in Connecticut
Name Your LLC
You should choose a unique and memorable LLC name to make your business stand out from the competition. You will also need to follow Connecticut's LLC naming rules.
According to Connecticut law, your LLC's name must:
- Contain the term "Limited Liability Company" or the approved abbreviations "L.L.C." or "LLC." If you like, you can shorten "limited" to "Ltd." and "company" to "co."
- Differ from the names of existing businesses already registered with the Connecticut Secretary of the State.
Search Your LLC Name. To find out if your desired name is available in Connecticut, you should run a name search on the Connecticut Secretary of the State website. If another business already uses your name, you will need to find a different one.
Check for Domain Name and Trademark Registration. You will also want to make sure you are not infringing on a trademarked or domain name. Search the LLC business name online to see if the domain name is available. If so, consider registering the domain name for a business website. To check for trademarks, you can look up the name on the United States Patent and Trademark Office (USPTO) website for prior registration.
Reserve Your LLC Name. If you are not ready to file the certificate of organization, you may apply with the Secretary of the State to reserve your LLC name for 120 days. You can file online or by mail. The fee to reserve your name is $60. When applying online, you will need to create an account.
Protect Your LLC Name. Your company name is an integral part of your business and brand. Protect your name with trademark registration in Connecticut or with a federal trademark at the USPTO. You can register a trademark online with the Secretary of State and pay a $50 registration fee.
Get a Registered Agent
Before you start an LLC in Connecticut, you must select a registered agent. A registered agent is a person or entity who agrees to accept legal papers for the business, including service of process if someone sues your LLC.
Your Connecticut registered agent may be one of the following:
- An individual who is a full-time resident of Connecticut (including an LLC member or manager)
- A Connecticut business entity
- A foreign business entity that has a certificate of authority to transact business in Connecticut
- The entity or individual who acts as your registered agent must have a physical address in Connecticut (not a P.O. Box)
If none of your LLC members are willing to act as the registered agent, you should consider a professional registered agent service. With a registered agent service, you pay another individual or business to accept legal papers for the company.
File a Certificate of Organization
To start your LLC, you must file a certificate of organization with the Connecticut Secretary of State and submit a $120 filing fee.
A certificate of organization is a legal document that provides basic information about your company. In Connecticut, the certificate of organization filing must include the following basic information:
- Your LLC's name and address
- The registered agent's name and address
- The name of at least one manager or member
- A statement about whether the LLC is manager-managed or member-managed
You can file your certificate of organization online at the Connecticut Secretary of the State website. You will need to sign in or create a new account. If you prefer, you can file by mail.
If you set up an account with the Connecticut Secretary of State, make a note of your login credentials. You can later use it to file your LLC's annual report.
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Draft an Operating Agreement
Connecticut law does not require operating agreements, but it's a good idea to have one. The LLC operating agreement is a contract among your LLC members, similar to corporate bylaws. It's an internal document that you will not file with the state. You will use it to govern issues such as:
- Member rights and responsibilities
- Voting rights
- Buyout procedures
- Percentage ownership
- Procedures to dissolve your LLC
- Any other important agreements or issues
Having an operating agreement promotes more organized operations for your business. It also helps avoid future disagreements among members. Even single-member LLCs should have operating agreements. Although single-member LLCs don't have to worry about disputes among members, an operating agreement helps to add legitimacy to their limited liability status. Further, you may need to show this document to certain professionals to obtain services for your business.
Get an Employer Identification Number (EIN)
An Employer Identification Number (EIN) is a unique number that the Internal Revenue Service (IRS) issues. It helps to identify your company, especially for tax purposes. You can think of it as a Social Security number for businesses.
Unless you have a single-member LLC with no employees, you need to get an EIN. You will use your EIN to file taxes, pay employees, open a business bank account, and apply for business credit cards.
You can file for a free EIN by mail, fax, or online on the IRS website.
Set Up Business and Tax Accounts
Depending on the location and nature of your business, your tax and licensing requirements will vary. You may need local, state, or federal business licenses. Visit the Connecticut Department of Revenue Services website to learn about your state tax obligations. For example, if you are selling goods, you may need to collect sales taxes. Further, if you have employees, you must register for withholding taxes.
File Beneficial Ownership Information Report (BOIR)
There is a new federal requirement that all LLCs must file a Beneficial Ownership Information Report (BOIR) with FinCEN. In 2024, you have 90 days from the creation/registration date of the LLC or the date of notice from the Secretary of State’s office that the LLC is registered, whichever is earlier. In 2025 and beyond, the timeframe is shortened to 30 days.
Go to www.fincen.gov/boi and select “File BOIR” to file the report. You must provide information about the LLC, its applicants, and beneficial owners. LLC applicants filed the LLC documentation or directed others to file the documentation to form the LLC. LLC beneficial owners are anyone with substantial control over the LLC or at least 25% of ownership of the LLC.
Note: On March 1, 2024, the U.S. District Court for the Northern District of Alabama ruled that the Corporate Transparency Act was unconstitutional. At this time, it is unclear if the federal BOIR requirement will be enforceable. Business owners of LLCs formed before January 1, 2024, may want to wait until closer to the January 1, 2025 filing deadline to check if they must file a BOIR for their business. For LLCs formed in 2024, business owners may want to check right before their 90-day deadline to see if the BOIR requirement is applicable.
Business and Tax Requirements
When you start a new business in Connecticut, you must register for taxpayer accounts. Check with the state and local governments for your LLC's business requirements.
State Business Tax
You may choose the tax structure for your LLC. Consult an accountant or business attorney for what is best for you and your business. If you choose corporate taxation for your LLC, the LLC must pay corporate state tax on the LLC's income. If you set up your LLC for pass-through taxation, the members pay a state tax based on their share of the income on their individual income tax returns.
State Employer Tax
If you hire employees, the LLC pays employment taxes. Employers in Connecticut must do the following:
- Report any new hires with Form CT-W4 within 20 days of employment date
- Set up withholding tax accounts with the Department of Revenue Services (DRS)
- Register for an unemployment insurance account
- Provide workers' compensation insurance
Sales and Use Taxes
When you register your new business with the Connecticut Department of Revenue, you set up a sales and use tax account if you sell, rent, or lease goods. The sales tax is 6.35% for most goods, but certain items, such as motor vehicles or jewelry, have different sales tax rates.
Business Licenses and Permits
If you need a federal license, visit the Small Business Administration (SBA) website. You can find comprehensive information about the types of businesses that must apply for federal licenses.
To learn about your state licensing requirements, you should visit Connecticut State's online License and Permit Center. For local permits, you should contact the city or county clerk where your business operates.
Registration in Other States
If you want your LLC to operate in another, you must register your LLC as a foreign LLC authorized to do business in that state. Contact the Secretary of State's office in that state for the requirements. You apply as a foreign LLC and pay a fee. Most states require a certificate of good standing from your LLC's home state. The certificate of good standing in Connecticut is called a certificate of legal existence. Additionally, you must follow that state's rules for registering business tax accounts, especially if you hire employees and have a business in that state.
Annual Requirements in Connecticut
To keep your Connecticut LLC in good standing, you must submit a yearly report to the Secretary of the State. An annual report confirms the foundational information about your LLC. This includes the LLC's name and address, information about the registered agent, and other basic details. You will find this very similar to the details you provided in your certificate of organization.
Connecticut LLC annual reports are due between January 1 and March 31 of every year. You will submit your first one before March 31 of the calendar year after you create your LLC. The Secretary of the State's office will send you an email or a postcard to remind you of this about a month before your report deadline.
You can submit your annual report at Ct.gov. At the time of this writing, the filing fee is $80.
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Disclaimer: The information presented here does not constitute legal advice or representation. It is general and educational in nature, may not reflect all recent legal developments, and may not apply to your unique facts and circumstances. Consider consulting with a qualified business attorney if you have legal questions.
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