How To Form an LLC In Connecticut (CT)?

If you’d like to experience the benefits that come with starting an LLC, like having limited liability, and you’re set on Connecticut as your location, you’ll find our guide on how to form an LLC in Connecticut incredibly useful.

We’ll guide you through every mandatory step of the journey of forming an LLC, including optional steps that can be extremely beneficial for your LLC, like forming an operating agreement. In addition, we’ve included our top recommendations for a registered agent (a mandatory requirement in Connecticut), as well as recommendations for formation services in case you decide that you want some help. At the end of our article, you’ll find a detailed FAQ section where we answer some pressing questions.

With all that out of the way, it’s time to explore the first step.

Find the Right Name for Your LLC

The first step to starting a business, regardless of what structure you decide on, is finding the right name for it. When it comes to LLC business names, you need to choose one that represents your business and follows all the guidelines imposed by the state of Connecticut.

In Connecticut, it’s imperative that your business name includes a word that represents the business structure. You can use “Limited Liability Company” or opt for one of the abbreviations that are allowed, such as “LLC” or “Ltd”.

Another requirement you need to fulfill is ensuring that the name you’ve chosen is distinguishable from all the other existing names in the state. If the name you’ve chosen isn’t unique, the formation documents you have to submit during this stage will be rejected. You can avoid this scenario by doing an online business entity search on the Government of Connecticut website.

After you determine that your business name is available, you have the option of applying for a business name reservation. You can file the application online or by mail to the Connecticut Secretary of State. The filing fee is $60. Once your business name reservation gets approved, you’ll be able to reserve your name for a total of 120 days.

You should also keep in mind that the state of Connecticut disallows you from using certain words that are deemed misleading. Usually, any words that show some association with a government agency are forbidden, such as “State Department” or “CIA”. You might also not be allowed to use words that denote a certain profession, such as “Doctor”, without getting the appropriate licenses and meeting further requirements.

When you’ve finally settled on a name, you have the option of purchasing the domain name that corresponds with your business name. Many business owners make the mistake of not purchasing the domain name during this stage, thinking that they don’t need a website for their business, only to find that the domain name isn’t available when they want to create a website further down the line. So, we recommend that you check for domain name availability online – there are many services that provide this option. 

Hire a Registered Agent for Your Connecticut LLC

A registered agent is a person or a business entity that’s responsible for handling all your important correspondence and forwarding the documents to you in a timely manner.

The state of Connecticut requires all business entities to appoint and maintain a registered agent while their business exists. The state has no restrictions in terms of who can be your registered agent – you can appoint yourself, a colleague, or a friend as your registered agent. They only require the agent you choose to comply with the official registered agent requirements in the state, such as being at least 18 years of age, working during normal business hours, and being a resident of the state.

While it’s significantly more affordable to appoint yourself as your own registered agent, it comes with various drawbacks. For instance, you’ll have to use your personal address on public records, which compromises your safety. You’ll also have a less flexible working schedule since you’ll be obligated to be available during normal working hours. Not to mention, keeping track of all your correspondence can be quite time-consuming. 

That’s why we recommend getting a professional registered agent service – experts can do all the hard work for you without breaking the bank since there are various cost-effective options you can choose from. Here are our top three Connecticut registered agent recommendations.

1. Northwest

Northwest is one of the most distinguished registered agent services in the industry. They have an excellent reputation and provide every tool you’ll need to remain in compliance with the state of Connecticut without an extortionate price. 

Their services will cost you only $125 a year, and in return, you’ll get pre-filled state forms, document storage, compliance alerts, mail forwarding, scanned documents, and annual report reminders. Northwest are also renowned for their expert data security – Privacy by Default – so you’ll never have to worry about your private information getting leaked. As a customer, you’ll get access to their Corporate Guides – an outstanding customer support team comprised of different experts across various fields. 

They’ll provide you with support throughout the journey and help you overcome any obstacle that might come your way.

2. ZenBusiness

Another registered agent service we wholeheartedly recommend is ZenBusiness.

Having helped over 300,000 businesses since they founded the company, this registered agent service offers a comprehensive approach that includes fast turnaround, access to a personalized digital dashboard, mail forwarding, mail notifications, and document scanning. Apart from that, you’ll also be supporting a great cause – ZenBusiness have an excellent $5k Grant Program initiative that gives entrepreneurs access to funding to start and grow their businesses.

Their yearly fee costs $199. You also have the option of upgrading their basic registered agent package to include added perks, such as annual support alerts.

3. IncFile

IncFile is also among the most popular registered agent service options across the United States. Their registered agent service includes tailored email and text notifications, automatic mail forwarding, and access to a personal dashboard. IncFile have a very user-friendly interface, which is a useful feature if this is your first time trying out this kind of service.

Their yearly fee is very affordable and it’ll only set you back $119. Their pricing is transparent, so you’ll never have to worry about any added fees or hidden contracts. In addition to registered agent services, they also offer a myriad of other services, all of which are equally affordable.

File a Certificate of Organization

The next step is filing a certificate of organization with the Connecticut Secretary of State. This document is mandatory for the successful formation of your LLC and it includes basic information about your business, such as its location, its name, and the name of the members.

You can choose to file the certificate online or via mail, and the fee is $120 for both. In Connecticut, it takes around a week for your document to be processed and approved.

Create an Operating Agreement

In Connecticut, it’s not required by law that you create an operating agreement for your LLC. With that said, this is an important step in the formation of your LLC and one that can save you from a lot of headaches in the future. Even though you might spend some extra time crafting together an operating agreement, it’s a worthwhile investment that can prevent future conflict and disputes.

An operating agreement is a document that outlines the managerial intricacies of your LLC, the liability clauses, and the division of the profits and losses in the company. It ensures that every LLC member is in agreement in terms of how the LLC will operate, so you won’t have to worry about disagreeing with fellow members in the future. Additionally, it also helps separate your LLC as its own business entity so you can attain limited liability.

You can find various LLC operating agreement samples online for free. If you don’t have the time to create an operating agreement at this stage, you can purchase an LLC formation package that includes this feature or hire a service that provides only operating agreements.

Obtain the Necessary Licenses and Permits

Before you can legally operate your Connecticut LLC, you’ll need to ensure that you have every license and permit required for your industry.

Connecticut doesn’t have a general business license on a state level, but you might be required to get a business license depending on what county or municipality your business is operating in, which is why you need to do your own research

If your business is in a specific industry, you might also need to get a professional business license. Industries like engineering and medicine are required to get additional licenses. You’ll need to do your research for this as well to determine what category your business falls under and check if there are any required licenses for it.

If this process sounds too overwhelming for you, don’t worry – there’s an easy tool you can use to ensure that you remain compliant. Just like doing an online business name search, you can also do a license search to see what types of licenses you need, depending on your branch and location.

When you obtain the necessary licenses and permits, keep track of the renewal dates to avoid getting into legal trouble.

Get an Employer Identification Number

Another important step in forming an LLC in Connecticut is getting an EIN (Employer Identification Number).

An EIN is required for multi-member LLCs and businesses that have employees, file certain kinds of tax returns (Employment, Excise, or Alcohol, Tobacco and Firearms), and are taxed separately from you.

Even if your business isn’t required to get an EIN by these standards, you might want to consider applying for one because of the many benefits that come with it. For instance, you will be able to open a bank account or get a business loan much more easily. Plus, it adds credibility to your business and it can make it significantly easier for you to file tax returns. It’s definitely worth considering as an option since the application will take you mere minutes to complete.

You can apply for an EIN on the IRS website, completely free of charge.

Comply With the Connecticut State Tax Requirements

During this process, you’ll also need to get acquainted with the taxation requirements in Connecticut.

If your business includes selling goods or doing specific kinds of services, you might be liable for a sales tax. Businesses that have hired employees also need to get a sales tax permit.

Additionally, there are some yearly or biyearly tax obligations you should watch out for. For instance, you need to pay a Business Entity Tax every two years at the cost of $250. You can get more information about this type of tax on the Connecticut State Department of Revenue Services website.

Similarly, the state of Connecticut also requires you to file annual reports. The filing fee is $20 and all the reports need to be filed online. You’ll receive a reminder from the Connecticut Secretary of State one month prior to your annual report due date. There are also certain registered agent services that include annual report reminders in your package, so if you opt for one of those services, you won’t have to worry about missing a deadline or getting in legal trouble with the state.

Hire a Formation Service for Your Connecticut LLC

Learning how to form an LLC in Connecticut might seem like a tedious process. Luckily, if all these steps seem too time-consuming or challenging, you can always hire a company to do all the hard work for you. There are various companies across the United States that offer formation services as part of their overall package, and some of them don’t even charge for it! If you have the budget for it, hiring a company that offers LLC formation services can save you from a lot of hassle and help you preserve your time and energy.

One of our LLC formation service recommendations is Connecticut Registered Agent LLC. This company offers a comprehensive LLC formation package that includes a free operating agreement template, an instant registered agent service, annual report reminders, an instant delivery system, and free use of their formation documents. You can access all the benefits from this package for just $269.

Another excellent option for a registered agent package is ZenBusiness. They don’t charge you for their basic package (excluding state fees) and it comes with expense and deduction tracking and a 100% accuracy guarantee. With this option, your LLC will be ready in two to three weeks.

If you have the budget for it, you can also hire some of their premium services. Their Pro formation package ($199) includes added perks, like an expedited filing speed and an operating agreement. With this package, your LLC will be ready in four to six days. 

Another option for those looking to spend a bit more on a formation package is their Premium formation package. Costing $299, this package comes with an even faster filing speed, a domain name and email address, as well as a customizable business website, and it will be ready in one to two days.

FAQs

Do I Need an Operating Agreement for my Connecticut LLC?

In Connecticut, LLC owners aren’t required by law to get an operating agreement. With that said, crafting an operating agreement at the formation stage of your LLC is always a good idea for a variety of reasons. 

Since this document lays out crucial information about your LLC, such as the way it will be managed, it can save you from potential arguments in the workplace over the responsibilities of each member. Additionally, it contains information about the LLC dissolution process in case this occurs, so you will know exactly what to do if this scenario ever comes to fruition.

How Much Does It Cost to Form an LLC in Connecticut?

The cost of forming an LLC in Connecticut depends entirely on what kind of services you’re planning on hiring before your LLC starts to legally operate. If you’re going for only the mandatory services and you file the remaining documents yourself, then the formation process won’t cost you more than $200. If, however, you want to hire additional services, such as a professional formation service or hire a legal consultant, the cost of forming an LLC in Connecticut can be hundreds of dollars.

A Word of Farewell

I hope you enjoyed learning about how to form an LLC in Connecticut.

While this process will only take a couple of weeks, there are a lot of steps to complete and details to remember. If you don’t think you’ll have the time and energy to dedicate to gathering all the formation documents and getting every license for your business, don’t hesitate to ask for help, whether it’s through direct consultation or a formation service.

Also see:

• Connecticut (CT) Secretary of State (SOS) LLC & Business Search
• Connecticut (CT) Registered Agent Services
• How To Find Connecticut Bookkeepers