A Connecticut LLC is a way to legally structure your business in the state. Limited Liability Corporations offer personal asset protection in case your business is sued or has financial troubles.
This guide on how to start an LLC in Connecticut will present the key requirements for setting up your company. It’s a fairly straightforward process with a few requirements to consider. With a filing fee of just $120, the cost of setting up an LLC in Connecticut is rather affordable.
So let’s see the steps of what you can do to create a Connecticut LLC and what you need to keep it running smoothly.
1. Choosing A Name For Your LLC In Connecticut
Giving your company a name is the first step of the process. The name you choose should be unique and distinguishable as compared to other entities registered in the state.
Checking the Business Name Database on the Secretary of State website will give you a good idea of name availability.
Connecticut LLC Name Designators
Every LLC in Connecticut should end its name with a proper designator. Accepted designators are:
- LLC
- L.L.C.
- Limited Liability Company
- Ltd. Liability Company
- Ltd. Liability Co.
- Limited Liability Co.
CT LLC Name Reservation (Optional)
Filing an Application for Reservation of Name available on the Business Forms section of the Connecticut Secretary of State website. Once approved, the name reservation is valid for 120 days. The filing fee for name reservation is $60.
2. Appoint A Registered Agent
A Registered Agent is a person or business entity that agrees to receive service of process on behalf of your Connecticut LLC. Service of process includes legal documents like lawsuits, subpoenas, summons, etc. While the Registered Agent might also receive general communication, their primary purpose remains to receive service of process.
It is mandatory for all LLCs to maintain a registered agent in Connecticut. Additionally, the registered agent must have a physical street address in the state. Use of a PO Box isn’t allowed. Your registered agent should maintain regular business hours so that they’re available in case the service of process arrives.
As long as these criteria are satisfied, your registered agent can be:
- Any adult who is a legal resident of the state.
- A foreign or domestic business entity that has an office in Connecticut and is legally allowed to do business in the state.
Commercial registered agents are business entities that take on the role of being registered agents for a fee. It’s a very popular option since they are professionals and can easily maintain all requirements of being a registered agent.
3. How To Form An LLC In CT – Filing Certificate Of Organization
Filing the Certificate of Organization is the key on how to form an LLC in CT. Broadly speaking, your LLC is formed the moment the CT Secretary of State accepts and approves the Certificate of Organization.
You can file these documents online or via mail. Online filing for Certificate of Organization uses the Concord System. You’ll have to register for a free account before you can use this system. Once the application is complete, you can pay using several credit/debit cards.
The processing time for the Certificate of Organization is 2-3 business days. Additionally, the state will send an email to the Registered Agent mentioned during the filing. They’ll have to open the mail and click on the link provided. Failure to do so within 48 hours means that the agent is not available and your application will be rejected.
If you choose to proceed through the postal mail options, you’ll have to download the form for the Certificate of Organization. This form is also available on the Business Forms section of the sos website.
Once you’ve completed the form, attach the $120 processing fee via check or money order payable to “the Secretary of State”. The mailing address for the form is:
Business Services Division
Connecticut Secretary of the State
P.O. Box 150470
Hartford, CT 06115-0470
It can take 7-10 business days, or even several weeks, for processing of the CT Certificate of Organization sent via postal mail.
4. Create An Operating Agreement
Connecticut doesn’t require you to have LLCs to have an Operating Agreement. However, they remain extremely relevant and you should invest in one.
Some would call an Operating Agreement the constitution of your LLC. As such, you make it as detailed as you prefer. Or, it could be just a bareboned document that includes necessary parts.
At the very least, an operating agreement shows that your LLC is being run properly. It could also come in handy for dispute resolution between LLC members.
While an operating agreement is very important for multi-member LLCs, it remains as relevant for single-member LLCs as well.
5. How To Get A Federal Tax ID (EIN)
A federal tax ID is a 9-digit number issued by the IRS. It’s usually called the EIN (Employer Identification Number).
Filing for the EIN is free. You can complete the process easily and quickly by filing online. In the event where filing online isn’t possible, you can use Form SS-4.
There are several situations where this form is relevant, these include instances where the applicant doesn’t have an SSN, or if the LLC is owned by another company/LLC.
Getting an EIN isn’t all about tax. Your CT LLC will need it for many important tasks, including setting up a business bank account, getting a business credit card, phone lines, and more.
6. Filing Annual Reports For Your LLC In Connecticut
All LLCs in Connecticut must file an annual report with the Secretary of State. The report is due every year before April 1, except for the year when the LLC was formed. So, if your Connecticut LLC was formed on February 12, 2020, the first annual report will be due before April 1, 2021.
Annual reports are filed online through the state’s CONCORD filing system. The filing fee is $80.
7. Business Licenses, Permits, Taxation
Business licenses and permits for LLCs in Connecticut depend on local and state laws, though rarely, federal regulation may come into play as well. Generally speaking, the required licenses and permits for an LLC depend on the location and the specific industry of the company.
Location is relevant to the city/county and its specific requirements for licensing and permits. Additionally, the state requires licensing and permits for businesses working in some specific industries. These include things like business permit, health permit, zoning and land use permit, etc.
You may need to register your Connecticut LLC with the Department of Revenue to handle state tax requirements.
For federal taxes, LLCs are generally treated as pass-through entities. That way, the profits from your Connecticut LLC can become part of your personal tax returns. However, different forms may need to be filed to account for the LLC structure.
Additionally, it’s possible to change the tax structure of your LLC, which would, in turn, change the tax requirements.