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Free Guide to Start an LLC in Connecticut

Starting a business in Connecticut can be an exciting time. Before selling your product or service though, the nuts and bolts of licenses, registrations, and taxes must be completed.

The guide below will show you the DIY process of forming an LLC in Connecticut. However, you can also use an LLC creation service handle the paperwork for you. We reviewed and ranked the top available.

 

The Top 2 Worth Considering:

  • Northwest Registered Agent is a great option if you are looking for premium customer support.
  • IncFile is ideal if you are looking for the best pricing with excellent features.

 

Step 1: Name Your LLC

Selecting a name for your Connecticut LLC is a first step, yet a very important one. A name that is unique and easy to remember is helpful in finding potential clients or retaining customers.

The name should indicate the product or service. It should also follow guidelines set forth by the state of Connecticut.

The name of an LLC will likely appear on business cards and stationary, marketing materials, a website, legal contracts, business bank accounts, invoices and/or a building directory.

Connecticut law requires that the business name includes a “business designation” such as “Limited Liability Company,” “LLC,” or “L.L.C.” Also, the abbreviations “ltd.” and “co.” can be used. Professional LLCs must include the designation “P.L.L.C.,” “PLLC,” or “Professional Limited Liability Company.” It must be different than other names already registered. Distinguishing features you may want to consider include the following:

  • A key word is different.
  • The same keywords are used but not in the same order or with a unique spelling.
  • If the key words are numbers, they are communicated differently: as numerals, Roman numerals, or written words.
  • Key words are differentiated by singular, plural, or possessive.

For Example

Let’s imagine that someone is considering opening a flower shop in Hartford, Connecticut. The name she is considering, Flowers by Fanny, is already in use. Instead, she decides to legally name her business Fanny’s Florals, LLC.

Determine the Name is Available

Following the selection of a name but before filing the Certificate of Organization, check to ensure that your name is unique on the Business Inquiry on the Connecticut Secretary of State website. Searching in other places, such as online, is also a good idea.

After you have determined that your chosen name is “distinguishable,” the name can be registered in order that you have exclusive rights for 120 days. Name reservations can also be renewed.

Optional: Name Reservation

Sometimes a situation may arise where an individual wants a particular name but needs time to organize his/her company before filing paperwork for an LLC. In this case, a name can be reserved for 120 days in the state of Connecticut. The downside is that it does cost $60 for the reservation. Checks and money orders are payable to Secretary of the State. An Application for Reservation of Name needs to be filed either by mail or in person to the addresses listed below.

Mailing Address:

Commercial Recording Division

Connecticut Secretary of State

P.O. Box 150470

Hartford, CT 06115-0470

 

Delivering in Person:

Commercial Recording Division

Connecticut Secretary of State

30 Trinity Street

Hartford, CT 06106

Processing time is usually between three and five business days although it can be longer during periods of heavier filing. Expedited processing is available for $50 and will shorten the processing to 24 hours.

 

Step 2: Choose a Registered Agent

Every LLC in Connecticut is required to have a registered agent. This agent can be an individual or a company.

The role of the registered agent is that of a contact person between the LLC and the state. As stated on the State of Connecticut website, the registered agent “must be appointed to accept legal process, notice or demand served upon the limited liability company.”

Simply put, the process agent receives communications or documents from the state involving such things as taxes or lawsuits and communicates them to the LLC.

Some may wonder why a registered agent is necessary. The importance of the agent is to ensure that someone is always available to receive important documents even if the business owner leaves the office, goes on vacation, or is otherwise away. Also, having a registered agent is especially important if a physical office does not exist in Connecticut.

The owner of the LLC can designate a registered agent on the Certificate of Organization application. The registered agent is required to sign the certificate. If the application is completed online, the registered agent must respond to an email accepting the appointment.

Individual as Registered Agent

Most importantly, the individual must be a resident of the state of Connecticut. An LLC cannot act as its own registered agent. Using a third party ensures that nothing falls through the cracks. The third party can be an accountant, an attorney, or even a friend. It can also be a member or manager of the LLC. The agent must have a physical and mailing address in Connecticut.

Registered Agent Service

If using a service, the registered agent must be a Connecticut or foreign corporation, LLC, LLP or statutory trust. (If foreign, it must have a certificate of authority to transact business in Connecticut.)

We recommend either using an LLC formation service (like Incfile or Northwest Registered Agent) which gives you a free registered agent or ordering a registered agent service by yourself if you choose to DIY your LLC formation.

 

Step 3: File the Formation Documents with the State

Let’s assume that fictional Fanny has selected both the name for her LLC and the registered agent. She is ready to complete the paperwork (called the Certificate of Organization) that actually creates Fanny’s Florals, LLC in Connecticut.

This step can be completed online, by mailing a hard copy through USPS, or by delivering in person. The filing cost is $120, with an option for expedited service for an additional $50. Check and money orders are payable to Secretary of the State. When you are ready, it is important to note a few details about each method to ensure that your application is fully completed in the time frame in which you need it.

Online Filing

Access your online application here.

Hard Copy Filing

Access your hard copy application here.

 

If mailing send to the following address:

Business Services Division

Connecticut Secretary of the State

P.O. Box 150470

Hartford, CT 06115-0470

 

If delivering in person, use the following address:

Business Services Division

Connecticut Secretary of the State

30 Trinity Street

Hartford, CT 06106

Processing time is typically between three and five business days for both online and hard copy applications. During heavier filing, processing time could be longer. Expedited processing is available for hard copy applications. The cost is $50, and turn-around time is 24 hours.

 

Step 4: Create an Operating Agreement

An operating agreement in the state of Connecticut is recommended though not required. The agreement is a contract that defines the operations of the LLC, includes terms and conditions, states the responsibilities of its members, and ensures legal protections of its members.

All owners of the LLC must be in agreement of the terms in the agreement and sign before a notary public.

The operating agreement is useful for both multi-member and single-owner LLCs. In both cases, the agreement provides protections.

For example, in the case of the multi-owner LLC, the terms can stipulate what should happen if a death or divorce occurs among one of its members. In the case of the single-owner LLC, the agreement could be used in court as evidence that the LLC is separate from the individual owner.

The operating agreement can be created in two ways. Some individuals may choose to write the agreement on their own, using an online template. In this case, forms are available that are specific to state. Be sure to use the correct multi-member or single-member form.

The alternative is hiring an attorney to create the document. The benefits of using an attorney are ensuring the document doesn’t exclude any important information, adheres to state law, and invalidates default provisions that may not be what you wish.

 

Step 5: Get an EIN

An EIN is an Employer Identification Number. Anyone who runs their business as a corporation or partnership must file for this 9-digit number in order to identify the tax accounts of a business. The number can be applied for in one of the following three ways:

Online

Applying online is the quickest method. The process can be completed between 7 a.m. and 10 p.m. EST, Monday through Friday. When the form is completed, the information will be immediately validated and a number issued while you are still online. In order to apply online, a valid individual taxpayer number, such as a Social Security number, is required.

Fax

Form SS-4 can be downloaded, completed and faxed to 855-641-6935, twenty-four hours, seven days per week. The EIN will be provided within four business days.

Mail

If either of the above methods are unavailable, Form SS-4 can be mailed, though processing will take approximately four weeks. The form can be mailed to the following address:

Internal Revenue Service Operation

Attn: EIN Operation

Cincinnati, OH 45999

Think you’re ready to open up shop now? Guess again!

 

Step 6: Taxes, Licensing & Income Reporting

Businesses like Fanny’s Florals, LLC may be official after completing the above steps, but it is important not to overlook a few critical details.

Taxes

On the federal level, most LLCs do not pay taxes directly to the government. Instead, they report income and losses on the owner’s personal 1040 tax returns. Schedule C is often used for reporting. Unless the LLC chooses to be taxed as a corporation, a single-member LLC is taxed as a Sole Proprietorship and a multi-member LLC is taxed as a Partnership.

Every CT LLC does need a state tax registration number. This application can be submitted either online or by mailing or delivering Form REG-1 to the Connecticut Department of Revenue Services (DRS) at the following address:

Department of Revenue Services State of Connecticut

PO Box 2937

Hartford CT 06104-2937

Using the registration number, LLCs are required to pay a Business Entity Tax (BET), which is a $250 biennial tax.

Your LLC may also be required to pay a sales tax (if the business sells taxable merchandise) or a use tax (if the business purchases taxable merchandise from out-of-state retailers). For businesses with employees, income and unemployment taxes may also be required.

For more information on state taxes in Connecticut, visit the DRS website at portal.ct.gov/DRS or by calling 800-382-9463 (outside the Greater Hartford calling area only) or 860-297-5962.

Licensing

Not every business needs a license in the state of Connecticut. To determine if your LLC requires licensure, conduct a keyword search on the Connecticut Economic Resource Center website. The cost of the license depends on the trade or occupation.

Local municipalities may also have their own requirements for licenses or permits. For example, many local governments may require a building permit, occupational permit, or health permit. Be sure to check the website of the municipality where your LLC will be located.

Reporting

After an LLC is formed, an annual report must be filed with the state of Connecticut each year.

Online filing is required unless a waiver is requested. The cost of filing is $20, and the report is processed immediately.

One month prior to the annual report due date, an email will be sent as a reminder. If an LLC does not have an email address on file, a postcard will be sent instead.

If an LLC does not file a report, it risks being dissolved by the state. It also could prevent the LLC from receiving a Certificate of Legal Existence, or good standing.

When all of the mechanics of setting up an LLC in Connecticut have been completed, someone like Fanny can get down to the business of setting up a website, creating a logo…or purchasing flowers!

 

Need Help Starting an LLC in Connecticut?

We recommend LLC creation services because it allows you to knock an important thing off your checklist so you can focus all your energy on actually starting a business.

Can you do it yourself? Absolutely.

However, a service that starts an LLC for you will help with ongoing maintenance and keep you notified of any requirements you should adhere to.

As we mentioned earlier, IncFile and Northwest Registered Agent are the top services to form an LLC online. If you’re not familiar with them, as a point-of-reference many of our readers like to compare them to the most well known LLC service, LegalZoom.

IncFile vs LegalZoom or Northwest Registered Agent vs LegalZoom