The Limited Liability Company (LLC) is a popular business structure for many businesses starting in Connecticut The LLC provides personal liability protection for lawsuits and business debts and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in Connecticut without an attorney.

Unlike a sole proprietorship or partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting for the business owner’s personal assets.

Related: How Does an LLC Protect You?

Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

Forming an LLC in Connecticut can be both affordable and is simple enough for most people to start on their own.  That said, it’s not a bad idea to have a legal professional like IncFile or IncAuthority.

The Connecticut LLC filing fee is $120, and approval for the LLC typically takes 2-3 business days when filing online and 2-4 weeks if filing by mail.

HOW TO FILE THE CONNECTICUT LLC CERTIFICATE OF ORGANIZATION TO FORM AN LLC

The steps for the online filing online or filing by mail are largely the same.  The screenshots show the online registration process.

To get started, either create an account with the Connecticut Secretary of State or download the Certificate of Organization (referred to as the Articles of Organization in some states).

After creating an account with the Secretary of State, select Business Formation (Domestic / Connecticut)

how to form a connecticut llc

 

Step 1: Name the LLC

If you are forming an LLC, select “Domestic Limited Liability Company” from the Business Type drop-down box.

Next, enter the trade name you want for the LLC.  The legal name of the LLC also has to differ from other business entity names in the state of Connecticut.  Check on available Connecticut LLC names.

Before selecting a business name, you may also want to see if a domain name is also available to have a matching website address.

Register Business Name Connecticut LLC

Per state law, the name of the LLC must include one of the following designators 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.  “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.

If you have previously filed a name reservation with the Secretary of State, you can select “Yes” and include the business name registration number.  You do not have to reserve a name before forming the LLC.

 

Step 2: Business Formation

Business Email Address – The email in this field will be used for the Connecticut Secretary of State to correspond throughout the LLC formation.

Principal Office Address – In this section, enter the street address, city, state, and zip code of the initial principal office.  This address can be the physical address of the LLC, or it can be the address where the business records are kept.  You may not use a PO Box address for the address if the principal office.

Mailing Address – If you prefer to use a different address than the designated office for correspondence from the Secretary of State, enter that address in this field.  Unlike the address for the principal office, a PO Box is acceptable for the mailing address.  If the mailing address is the same as the principal office address, select the box, and the information will copy over.

Registered Agent Information – To have a Connecticut Limited Liability Company, a Registered Agent must be identified.  The Registered Agent is a Connecticut resident (select “Individual” in the “Agent Type” drop-down list) or a corporate agent (select “Business” in the drop-down list) with a physical presence in the state of Connecticut. A Registered Agent is a person or company that 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. It’s important these papers make it to the correct person, so the entity has sufficient time to be notified about legal action and begin their defense.

The Registered Agent must have a physical address in the state and be available during normal business hours. Even though any individual can be the agent (business owner, member, friend, etc.), their name and address become public record, and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home.  Hiring a Registered Agent Service like Northwest Registered Agent will reduce the number of unwanted phone calls and mailings to your home address.

Note that whoever is the Registered Agent, they will receive an email for them to acknowledge that they 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.

Organizer Information – The LLC Organizer is someone who 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.

How to Register a CT LLC

 

Step 3: Principals

Select “Add Principals” to add all the LLC’s members and managers.

Connecticut LLC Add Principals

Principal Type – If an individual, select “Individual” from the drop-down list and enter their first and last name.  If a company, select “

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 members of the LLC hire somebody to run the company, similar to the position of CEO for a corporation, the title of the person would be a manager.  An LLC set up like this is considered a Manager-Managed LLC.
  • Managing Member – Is a hired manager who is also a member.

Most LLCs choose a management structure that is member-managed.

What is the Difference Between a Member-Managed LLC and Manager Managed LLC?

Connecticut Member-Managed

Continue adding principals until they have all been added.

 

Step 4: Review

Review that the information is correct.

Step 5: Pay and File

Pay and file the Certificate of Organization.

In approximately 2-3 business days, the LLC will be approved.

That concludes the basics of forming an LLC in Connecticut.  Remember, even though you can do it yourself, there is more to an LLC than just the filing.  

If you have questions, contact the Connecticut Secretary of State.
30 Trinity Street
Hartford, CT 06106
860-509-6003
https://www.concord-sots.ct.gov/CONCORD/

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Tasks After Forming Your LLC

After the initial formation, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare an Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, member responsibilities, how profits and losses are distributed, and more.

Most states 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 generic state rules that may be detrimental in the event of a lawsuit.
  • Member’s personal liability protection may be diminished.
  • Members may not have a full understanding of their roles and responsibilities, which could lead to costly disputes in the future.

Related: Connecticut operating agreement template

Obtain an EIN

The EIN or Employer Identification Number (sometimes referred to as the Federal Employer Identification or FEIN) is a unique 9-digit number for a business that is assigned by the Internal Revenue Service.  The EIN is similar to a social security number for an individual but instead identifies business entities for tax purposes.

The EIN will be needed in order to open a bank account, register for business licenses and permits, file tax returns, pay payroll taxes, and more.

Related: How to Apply for an EIN from the IRS website

Elect the LLC’s Form of Federal Income Taxation

One of the major benefits of the Limited Liability Company is the tax flexibility it provides.  When applying for the Employer Identification Number, you will choose how the entity will be taxed for federal income tax purposes. While there are some limitations, an LLC may be classified for federal income tax purposes as a:

  • Sole proprietorship
  • Partnership
  • C-corporation
  • S-corporation

While this may sound confusing, this is referring to the way the LLC is taxed, not the legal structure.

Related: How can an LLC be taxed?

By default, LLCs are pass-through entities. This means instead of the LLC paying taxes on profits, the profits or losses flow through to the members.

Single-member LLCs will, by default, be taxed as a sole proprietorship. The members can elect to be taxed as a C-corporation or an S-corporation.

Multi-member LLCs will be default be taxed as a partnership. The members can elect to be taxed as a C-corporation or an S-corporation.

In general, the difference between being taxed as a corporation and being taxed as a sole proprietorship or partnership the profits and losses are passed to the member’s federal income tax returns based on their percentage of ownership.  As a result, the owner will pay income tax and self-employment taxes on all business profits.  As an alternative, electing to be taxed as a corporation allows the members to take a reasonable salary and then pay payroll taxes.  Any remaining profits are distributed and aren’t subject to payroll taxes, resulting in potential tax savings.  

Before electing how your LLC will be taxed, be sure to talk with an accountant to assess which one will be best for you. 

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 age of the LLC, a Connecticut Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.

Related: How to Open a Business Bank Account for your LLC 

Apply for Business Licenses and Permits

Depending on what the business activity does and where it is located, there will likely be a variety of business licenses and permits to register for before starting. Some common registrations include:

  • Business License – Some cities require businesses to obtain licensing or local permits before they can start. 
  • Professional License – Certain services such as barbershops, accountants, salons, and others must be licensed.
  • Sales Tax Permit – In order to sell products and certain services, registration for the State Tax Identification Number will be made through the Connecticut Department of Revenue Services.

Related: What Business Licenses are Needed in Connecticut?

File Annual Reports & Taxes

LLCs are required to file an annual report with the Connecticut Secretary of 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.

Additionally, LLC’s that elect to be taxed as an S corporation will be subject to the pass-through entity income tax.

Related: How to File a Connecticut LLC Annual Report