Starting a small business in Connecticut often means registering with several federal, state, and local agencies. Let’s review common Connecticut business license registrations so your business starts off right.
Related: Guide to starting a business in Connecticut
First Step – Set Up the Business
Sole proprietorship: In Connecticut, a sole proprietorship is a business owned by one person. It is the simplest form of business structure, with no legal distinction between the owner and the business. The owner has complete control over the business but is also personally liable for all debts and obligations.
General partnership: A general partnership in Connecticut is an agreement between two or more individuals to operate a business together. No formal setup is needed, but a partnership agreement, but it’s a great idea to draw up a partnership agreement to outline operations and responsibilities.
Corporation: A Connecticut corporation is a legal entity separate from its owners, known as shareholders. It offers limited liability protection, meaning shareholders are not generally personally responsible for the corporation’s debts and liabilities. The downside is that corporations are the most complex structure to start and operate.
Limited Liability Company (LLC): A Connecticut LLC combines aspects of a sole proprietorship or partnership and a corporation. It provides limited liability protection to its owners, called members, shielding their personal assets from the company’s debts and liabilities, in addition to a flexible management and tax structure.
Related: Comparison of Business Structures
What Licenses Do Connecticut Businesses Need?
With the business structure out of the way, we can begin looking at the different types of registrations businesses in Connecticut may need. There isn’t a standard business license, as requirements vary depending on where the business is located and its activities. Here is a general overview of the different registrations your business may need.
State of Connecticut Business License
There is no general state of Connecticut business license.
City Business Licenses
Many cities require businesses to be licensed in order to operate. Rules for business registration vary depending on location and the business’s activities. Below are a few cities that have licensing requirements.
- New Haven: The City of New Haven requires business licenses for amusement-related businesses like bowling alleys, game rooms and pool tables, street vendors, and contractors
- Hartford: Businesses requiring licensing in Hartford include dance halls, pawnbrokers, second-hand dealers, laundromats, and more. The filing fee for most licenses is under $100.
- Stamford: All businesses operating in City limits need to obtain a business license from the City of Stamford.
For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements.
Trade Name Certificate
Sole proprietorships and partnerships in Connecticut that want to operate under a business name other than the full name of the owner(s) will register for a Connecticut Trade Name Certificate (also known as a Doing Business As, DBA, or Fictitious Name) with the Town Clerk’s Office where the business is located.
Building & Zoning Permits
Zoning: In Connecticut, zoning regulations are established by local governments and before starting a business, check with your local planning and zoning department to ensure compliance with zoning laws. For home-based businesses, you may need a home occupation permit, which is issued by the local zoning department.
Building Permit: If you plan to construct, alter, or repair a building for your business in Connecticut, you’ll need a building permit from your local building department. Building permits ensure compliance with the Connecticut State Building Code. In most cities and towns, the local building department is responsible for issuing building permits. For example, in New Haven, building permits are issued by the Building Department.
Signage Permit: Before installing any business signage in Connecticut, you must obtain a sign permit from your local government. Each city and town has its own signage regulations and permit requirements. In Bridgeport, sign permits are issued by the Building Department, while in Stamford, the Zoning Enforcement Officer handles sign permits. Check with your local government for specific signage requirements and permit application processes in your area.
Connecticut Sales Tax Permit
If your business sells, rents, or leases goods, sells a taxable service or operates a hotel, motel, or lodging house, you must obtain a Connecticut Sales and Use Tax Permit (REG-1 Form) from the Connecticut Department of Revenue Services.
Resale Certificate
After obtaining the sales tax permit, most businesses will want to obtain a Connecticut Resale Certificate. This allows them to not pay sales tax on their inventory purchases meant to be resold to customers.
Occupational License
A variety of occupations and professions in the state are regulated and need to be registered before offering certain services. A few common professions that require licensing in Connecticut include; acupuncturists, athletic trainers, family planners, landscape architects, pharmacists, and many more. Additional information, fees, and licensing requirements for professions are available from the State of Connecticut.
In addition to professional licensing, there are a few other types of businesses that need licensing that are not covered by the State, a few of which include:
Employer Identification Number (EIN)
The Connecticut Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses operating in Connecticut. It is used for tax filing and reporting purposes, similar to how an individual uses a Social Security number. Companies can apply for an EIN through the IRS website or by submitting a paper form.
Next Steps
While it’s a good start, there are so many different licenses that may be needed. Double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.
