Step-by-Step Guide to Forming an LLC in Connecticut

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Connecticut LLC Quick Facts

How much does it cost to form an LLC in Connecticut?

Initial LLC Filing Fee – $120

 

Recurring Fee – $80 Annual Report Fee

How long does it take to get an LLC in Connecticut?

Online – 2-3 business days
Mail – 2-4 weeks

 

Expedited processing is also available for an additional fee

Don’t want to form an LLC by yourself?

Let IncFile or IncAuthority guide you through the LLC formation process, so you know everything was done right. Only pay state fees!

Quick Reference

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 can 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 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, general partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

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

Steps to Form a Connecticut LLC

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

If you provide a licensed professional service in Connecticut, you will have to form a Professional Limited Liability Company, Professional LLC, or PLLC. Common professional services include architects, barbershops, chiropractors, certified public accountants, dentists, psychologists, attorneys, veterinarians, professional counselors, and more. An out-of-state LLC wanting to physically do business in the state will want to look at filing a foreign LLC.

Forming an LLC can be both affordable and is something most people can do themselves. Entity formation companies like IncFile or IncAuthority help guide you through the process and make sure there are no mistakes.

Related: Should you use a Formation Service, Hire an Attorney or Do it Yourself?

To get started, either create an account with the Connecticut Secretary of the 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 the 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 LLC’s legal name also has to differ from other business entity names in the state of Connecticut.  Check on LLC name availability in Connecticut.

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 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.  “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 LLC’s physical address, or it can be the address where the business records are kept.  You may not use a PO Box address for the address of 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 street address 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. These papers must make it to the correct person, so the entity has sufficient time to be notified about legal action and begin their defense.

The requirements to be a Registered Agent include having a physical address in the state and being available during normal business hours.

You can act as your own registered agent in Connecticut and you are not required to pay for a registered agent.

Any individual meeting the requirements can be the agent, however, the agent’s 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 or still employed.  Hiring a company like Northwest Registered Agent to be the Registered Agent will reduce the number of unwanted phone calls and mailings.

Note that whoever is the Registered Agent will receive an email that confirms 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 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 title first and last name.  If a company (not as common), select “Business.”

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 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 member-managed management structure.

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 and information sent to the filing party.

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 LLC 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 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

The EIN or Employer Identification Number (also called a Federal Employer Identification Number or FEIN) 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. The EIN will be needed to hire employees, open a bank account, register for business licenses and permits, file tax returns, and more.

There is no cost for the EIN when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can also register by phone, fax, or mailing IRS Form SS-4.

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 refers to how the LLC is taxed, not the legal structure.

Related: How can an LLC be taxed?

By default, LLCs are pass-through entities. 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 LLC age, 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 the business activity and location, a variety of business licenses and permits will be needed. Some common registrations include:

  • Business License – 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, 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 the 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 LLC Annual Report

 

Common Questions When Starting An LLC

You can act as your own registered agent, provide you are a resident of the state and are generally available during normal business hours. 

It’s sometimes thought that the LLC and business license are the same, which they aren’t.  Business license requirements vary by location and the type of business being operated. 

An out-of-state LLC wanting to do business in another state will have to register as a foreign LLC with the new state’s Secretary of State.

Businesses that require state licensing and offer professional services such as accountants, attorneys, podiatrists, physical therapists, acupuncturists, etc. often must 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 the LLC.

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