Think about your LLC a year from now: raking in profits and taking Connecticut by storm. You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees – before you sell a single product, there are startup costs associated with launching an LLC in Connecticut.
While you’re making plans and dreaming big, make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Connecticut startup fees here.
Bare Minimum Cost to Start an LLC in Connecticut
- Optional: LLC Name Reservation Fee
- $60, filed by mail or in person
- Required: Certificate of Organization Fee
- $120, filed online, by mail or in person
Overall Connecticut LLC Formation Costs
LLC Name Reservation Fee
Let’s say you still have some paperwork to figure out before officially starting your LLC, but you have an amazing name in mind. In cases like this, a name reservation could be beneficial. Reserving a name is optional, but it can help provide peace of mind while you work out your LLC formation details. A Connecticut name reservation gives you a 120-day hold on your name, and it’ll set you back $60.
Certificate of Organization Fee
This is the big one, the most important (and most expensive) form that you’ll file to start your Connecticut LLC. Your LLC isn’t officially recognized by the state until you’ve successfully filed a Certificate of Organization. Whether filing online, by mail, or in person, the Certificate of Organization will cost you $120. What’s nice is that this is a one-time fee. You won’t have to pay it again during the life of your business unless your initial filing is rejected.
Depending on the type of business you’re registering and where you’re located in Connecticut, you may need to acquire certain licenses before conducting businesses. For example, a restaurant would need to obtain a “Food Service Certification” from the Department of Health before serving customers.
The state has particular licensure requirements, but so do individual cities, so you’ll need to check with both. Visit the Connecticut Economic Resource Center to determine which licenses you may need.
LLC Formation Service
Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an LLC formation service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services offer basic LLC formation service like Certificate of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
IncFile and LegalZoom are two of the most popular LLC formation services that offer reasonable prices. IncFile’s pricing starts at $49 while LegalZoom’s starts at $99. If you’d like to compare their services, and see why we prefer IncFile overall, check out our in depth comparison guide.
Registered Agent Service
Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with Connecticut business law. In short, you need an agent you can trust.
While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2000.
Cost variations depend on the experience and location of the lawyer. If you’re considering hiring a lawyer, do some research to ensure that you hire an ideal match for your business. Take advantage of a site like Avvo, a database of attorneys from across the country, sortable by location, rates, specialties, review and more. It’s got everything you need to find the perfect Connecticut business attorney for you.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into Connecticut. Foreign businesses need only to file the “Foreign Registration Statement,” not the Certificate of Formation.
All foreign business entities are required to foreign qualify in Connecticut, or they could incur some pretty severe penalties. There are two ways to file: online or on paper. Both methods require a $120 fee. This filing is similar to the Articles of Organization in that you’ll only need to file it and pay the fee once, provided it’s accepted by the Secretary of State.
LLC Annual Fees
Each year, your LLC must submit an Annual Report with the Secretary of State. This is to assist the state in maintaining current and accurate information for all of its businesses. Each annual report costs $20, so plan that into your yearly budget. Annual reports are due by the end of your LLC’s anniversary month (the month in which it was initially formed) and must be filed online.
The way that LLCs are typically structured, they do not have to pay taxes to the federal government. Only its individual members do. But in Connecticut, every LLC is required to apply for a state tax registration number either online or by filing Form REG-1. This is because every LLC is required to pay a $250 biennial Business Entity Tax. The tax is due on April 15th of every odd-numbered year.
Additionally, there are certain circumstances that would make your LLC subject to other business-related taxes. If you hire employees, for example, your LLC may have to pay income and unemployment taxes, and if your LLC sells merchandise, it will likely owe a sales tax.
What If I Don’t Pay?
Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
Connecticut companies that fail to keep up with their required filings, fees, and taxes are classified as “delinquent.” The most common causes of delinquency are missed Annual Reports, unpaid Business Entity Taxes, and failure to maintain a registered agent. Delinquent LLCs may lose their ability to maintain lawsuits, foreign qualify in other states, secure loans, and more.
A company that remains in delinquency risks being dissolved by the state. It’s possible to reinstate a dissolved LLC, but you’ll have to resolve all of your outstanding filings and fees and pay an additional reinstatement fee.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in Connecticut.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees – like Annual Reports and Business Entity Taxes – so your business doesn’t fall out of good standing.