Starting a business often involves a long list of tasks. One important task to tackle early on is setting up the business structure, and if you’re interested in learning how to set up your own Connecticut LLC, our guide will walk you through the process.
Related: Guide to starting a business in Connecticut
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Steps To Form A Connecticut LLC
Step 1: Choose an LLC Name
The first step in starting a Connecticut LLC is making sure the name you want is available. This is because the state requires the name of every LLC to be different from other registered business entity names in the state of Connecticut. It’s easy to do a Connecticut LLC name search on the Connecticut Secretary of State’s website.
Per Connecticut state law, the name of the LLC must include one of the following words or abbreviations at the end of the business name:
- Limited Liability Company
- Limited Liability Co.
- Ltd. Liability Company
- Ltd. Liability Co.
- LLC
- L.L.C.
A comma may be used after the business name and before the designator. “Charter Oak Consulting LLC” and “Charter Oak Consulting, LLC” are both acceptable.
Before selecting a business name, you may also want to see if a domain name is also available to have a matching website address.
Step 2: Appoint a Connecticut Registered Agent
To have a Connecticut limited liability company, a registered agent must be appointed and continually remain in place.
A registered agent receives service of process on behalf of the LLC. Service of process is when important legal documents, tax notices, summons, subpoenas, and other legal papers are sent to the LLC. These papers must reach the correct person so the entity has sufficient time to be notified about legal action and begin its defense.
The requirements for being a Connecticut registered agent include being at least 18 years old, having a physical address in the state, and being available during normal business hours.
While many LLC owners opt to fulfill this role themselves, some owners choose to hire registered agent services like Northwest Registered Agent. Utilizing a registered agent service ensures that your LLC adheres to state requirements while offering an added layer of convenience and confidentiality since the owner’s personal address isn’t disclosed in public records.
Related: What is a Connecticut registered agent?
Note that the registered agent will receive an email where they must agree to be the LLC’s agent. A link in the email must be clicked within 48 hours; otherwise, the LLC filing will be rejected.
Step 3: File the Connecticut Certificate of Organization
The paperwork to create an LLC in Connecticut is called the Certificate of Organization and is filed with the Connecticut Secretary of the State.
To file, you can either create an account with the Connecticut Secretary of the State or download and mail in the Certificate of Organization form (referred to as the Articles of Organization in some states).
Related: How to fill out the Connecticut Certificate of Organization
Turnaround time for the state to approve the Certificate of Organization is approximately 7-10 business days by mail or 2-3 days when filing online.
If you have questions, contact the Connecticut Secretary of the State.
30 Trinity Street
Hartford, CT 06106
860-509-6003
https://www.concord-sots.ct.gov/CONCORD/
Tips for Filling Out the Connecticut LLC Articles of Organization
When filing the Certificate of Organization, there are a few sections that can be confusing. Let’s go over a few of those sections so you don’t get tripped up.
Principal office address: In this section, enter the initial principal office’s street address, city, state, and zip code. This address can be the LLC’s physical address or the address where the business records are kept. You may not use a PO Box address for the address of the principal office.
Organizer information: The LLC Organizer is involved with the formation of the Certificate of Organization. The Organizer may or may not be a member, such as a mentor, attorney, or accountant, but the initial members could be an organizer.
Title: This selection refers to whether the individual is a member or manager of the LLC.
- Member: The members of the LLC have an active involvement in the day-to-day operations of the business. This is referred to as a Member-Managed LLC.
- Manager: If the LLC members hire somebody to run the company, similar to the CEO position for a corporation, the person’s title would be manager. An LLC set up like this is considered a Manager-Managed LLC.
- Managing Member: This is a hired manager who is also a member.
Most LLCs choose a member-managed management structure.
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What To Do After Setting Up Your Connecticut LLC
Once your new LLC has been formed, there are a few additional steps to take care of. Every business will be a little different, but here is a list of the most common tasks.
Prepare a Connecticut LLC Operating Agreement
The operating agreement is a document that governs the framework of an LLC. This document covers items like ownership rights, LLC member responsibilities, how profits and losses are distributed, and more.
Most states (including Connecticut) do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:
- The LLC could be subject to default Connecticut state laws that may be detrimental in the event of a lawsuit.
- Member’s personal liability protection may be diminished.
- Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.
Related: Connecticut operating agreement template
Obtain an EIN
If the LLC will hire employees or is owned by more than one member, an EIN is required.
The EIN or Employer Identification Number (also referred to as a Federal Employer Identification Number, FEIN, or Federal Tax ID Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.
Related: How to apply for an EIN
Open an LLC Bank Account
Opening a new bank account for your LLC is important for liability protection, as the account separates the business’s funds from the member’s personal funds.
Several documents will be needed to open a business bank account, such as:
- A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
- Copies of the original formation paperwork from the state showing the creation of the business entity.
- Driver’s licenses of the members.
- Depending on the LLC’s age, a Connecticut Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.
Apply for Business Licenses and Permits
Depending on the business activity and location, a variety of business licenses and permits will be needed. Some common registrations include:
- Business license: There isn’t a general statewide business license, but some cities require businesses to obtain licensing or local permits before they can start.
- Employees: If you have employees, registration from the Connecticut Department of Revenue Services will be needed for the Employee Withholding Tax.
- Sales tax permit: To sell products and certain services, a State Tax Identification Number will be needed from the Connecticut Department of Revenue Services.
Related: What business licenses are needed in Connecticut?
File the Connecticut LLC Annual Report
LLCs are required to file an annual report with the Connecticut Secretary of the State. The annual report updates ownership information and other details. The due date for the annual report is between January 1st and March 31st of every year.
Related: How to File a Connecticut Annual Report
File the Beneficial Owner Information Report
Beginning in 2024, any individual who owns at least 25% or has “substantial control” of an LLC or corporation in Connecticut or any other state must file the Beneficial Ownership Information (BOI) form with the Financial Crimes Enforcement Network (FinCEN). BOI reports are filed electronically through FinCEN’s website.
Connecticut LLC FAQs
How much does a Connecticut LLC cost?
There is a $120 state filing fee paid to the Secretary of State to start an LLC in Connecticut.
Is there a yearly fee for an LLC in Connecticut?
Yes – Each year, there is an $80 state fee due for filing the annual report.
How long does it take to get a Connecticut LLC approved?
It normally takes 2-3 days for online filings and 7-10 business days for filings sent by mail for the state to approve the LLC paperwork.
Why choose an LLC?
A Connecticut LLC is a business structure chosen by small business owners for its flexibility and protection. Unlike a sole proprietorship or general partnership, it shields the personal assets of its owners, called members, from the debts and liabilities of the business. This means if the business runs into financial trouble, the personal belongings of the members, such as houses or savings, are generally protected.
An LLC also offers more operational flexibility compared to a corporation, with fewer formalities like board meetings and record-keeping requirements.
An LLC is a great choice for small business owners who value simplicity yet seek personal liability protection. It combines the ease of a sole proprietorship or partnership with the protective features of a corporation.
What is a Foreign Limited Liability Company?
A Connecticut foreign LLC refers to an LLC that was formed in another state but wants to operate physically in Connecticut. Physically operating means having a presence, such as having an office or hiring an employee.
What is a Professional Limited Liability Company?
Businesses requiring state licensing in the state of Connecticut, such as attorneys, landscape architects, podiatrists, physical therapists, accountants, etc., can file as a Professional Limited Liability Company (sometimes referred to as a Professional LLC or PLLC) instead of an LLC. Filing for a PLLC is very similar to that of an LLC.
Related: What is a professional LLC?
Can you use a PO Box for an LLC in Connecticut?
A PO Box can only be used for a mailing address, but the Principal Office address and the address for the Registered Agent must be a physical street address in Connecticut.
