How to Start an LLC in Connecticut
Whenever starting out on any new venture, the first few steps can feel intimidating. If your new venture is to start an LLC in Connecticut, you may be looking for help with the process. This guide is for you!
Limited liability companies (LLCs) are a very popular business entity type, and for good reason. They are relatively easy to set up (compared to corporations), and are also easier to maintain. But they still provide important personal liability protection, which keeps your personal assets safe in case your business gets sued.
In Connecticut, starting a new LLC is handled by the Connecticut State Department of Revenue Services (DRS) and the Connecticut Secretary of State. The process can be done online, or via mail. This guide will show you all you need to know about how to form an LLC in Connecticut, from start to finish!
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Consider using an LLC service
Forming a new LLC is a bit complex, so many people prefer to get professional help with it. LLC formation services offer a simple, inexpensive option to get some personalized guidance when setting up your new company.
For most businesses, we recommend ZenBusiness, Northwest Registered Agent, or Bizee. ZenBusiness is particularly affordable, with plans from just $49 + the Connecticut state LLC fee.
These companies help you set up your new business and also help you maintain it and keep it in good standing. Some offer services for annual reports and other ongoing filings, and most also can serve as your Registered Agent (which is required in CT). More on Registered Agents will be explained in step #3 below. Plus, these services can help you draft your Operating Agreement (more on this in step #4 below).
In short, LLC services like ZenBusiness can help with just about every step of this process. They make everything simpler for the business owner, more efficient, and more accurate. To be clear, you can do everything on your own – but if you value your time, it’s generally worthwhile to use a service.
Recommended services
Name your business
If you’re starting a CT LLC, you’ll need to come up with an appropriate business name – that’s not already taken by another business in the state. LLC names must be distinguishable from existing company names in the state of Connecticut (you can search the business name database here to confirm availability). In addition, the name must meet a handful of other requirements:
- The name must include “LLC”, “Limited Liability Company”, or “L.L.C.”
- The name cannot contain government-related words or phrases, like “FBI”
- Some words are restricted and require additional paperwork. This includes “University”, “Doctor”, etc.
- The name must be distinguishable from other CT companies, including LLCs, corporations, and partnerships
Once you’ve settled on an available name that meets the requirements, you can move on to step 3. But before you worry too much about finding the “perfect” name, keep in mind that you can use a trade name for your company.
Using a trade name in Connecticut
Connecticut allows for the use of “trade names”, otherwise known as “doing business as” names or “DBAs”. These are secondary names that can be applied for separately. They do not create a new business entity, but instead are essentially attached to your existing business.
For example, if you start a company called “Advanced Roofing Solutions”, you could also register trade names for “Hartford Roofing” and “New Haven Roofing”, assuming all of those names are available.
To apply for a trade name, you’ll need to already have an established business (so continue with the rest of the steps below first). Then, you can contact the city clerk or county clerk, to add a trade name to your business license. It will be the same department that helps you with your actual business license – both are handled on the local level, not the state level.
Appoint a Connecticut registered agent
Connecticut LLCs are required to have a Registered Agent in Connecticut. A Registered Agent is simply a person or business that is appointed to receive legal correspondence (such as notice of lawsuits) for the business.
A registered agent must meet certain requirements. They must be either:
- A resident of Connecticut
- A business licensed to operate in Connecticut
The agent must supply a physical mailing address (no PO boxes) which will become a public record. As such, privacy is limited if you’re using a home address.
You can be your own Registered Agent. Or you can appoint an employee. Alternatively, you can use a Registered Agent service. Both ZenBusiness and Northwest Registered Agent are good options.
These companies offer several benefits. For one, they protect your privacy, as you won’t need to use your personal address. They also ensure all documents are received and processed properly, and some also offer complimentary services like mail forwarding.
You need to keep a Registered Agent for the life of your business. Keep this in mind when deciding which route to take.
Prepare an operating agreement (optional)
Note: This step is optional, but highly recommended for most businesses.
An operating agreement is an internal document that you’ll keep on file for your own records. It does not need to be submitted to any government agency, and therefore it’s optional.
Operating agreements essentially layout key details about the new business, including its purpose and critically, its ownership structure. For multi-owner businesses, operating agreements are very important as they help reduce the risk of ownership disputes down the road.
To prepare an LLC operating agreement, there are a few methods you can use. Services like ZenBusiness provide templates that make it easy. You may be able to find a decent template online by searching around. Or you can use the services of a local attorney.
File LLC Certificate of Organization
The LLC Certificate of Organization is the main document that you will need to fill out and submit in order to start a limited liability company in Connecticut. The PDF form is found here, which can be printed out and mailed or faxed in. Alternatively, you can file online here.
The filing cost is $120. Processing time generally takes 2-3 weeks. Expedited processing may be available for an additional fee.
This form asks for various information about your new business. Most are fairly self-explanatory (and the form includes instructions), but there are a few things that are worth explaining here:
- You will need to find your business’ NAICS code by searching Census.gov here.
- You will need to have a Registered Agent appointed before you fill out this form
- You will need to decide whether your business will be member managed or manager managed
The mailing address, should you choose to file physical papers, is below:
Business Service Division
Connecticut Secretary of the State
P.O. Box 150470
Hartford, CT 06115
Wait for your documents
Once you have submitted your application, you’ll need to wait for Connecticut to process everything. This can take as little as 7-10 business days but may take several weeks if the department is backed up. You may be able to pay extra to expedite the process during your initial application – particularly if you use a service like ZenBusiness.
Apply for an EIN
An EIN, or employer identification number, is essential if you want to hire employees. This is a federal tax ID and is somewhat like a social security number for your business. It’s used in IRS correspondence and is 100% required to hire any employees.
It’s very easy to apply for an EIN, and there is no cost to do so. You can simply file for one online on the IRS website. Again, this is a federal number, so it has nothing to do with Connecticut – but all businesses should have one, regardless of location.
Apply for a business license, permits, etc.
The documents you receive from the state of Connecticut will establish your official LLC. However, that doesn’t actually include business licenses or other permits, so you may need to submit additional applications.
Connecticut requires business licenses and permits for many types of businesses. The cost and application process will vary depending on the types of products or services you plan to offer.
Additionally, you may need local permits and licenses, on the county or city level. Check with your local government for details.
That’s all you need to know about starting an LLC in Connecticut! If you follow these steps, you’ll be on your way to the business you’ve always wanted.
Keep your business in good standing
Once your business is formed, there are various ongoing responsibilities that you’ll need to stay on top of. Some examples include:
- Connecticut Annual Reports (due annually)
- Federal tax returns
- Quarterly taxes
- Annual city/county tax reports in some areas
- Employer taxes, such as payroll tax returns
- State sales tax and use tax returns
- Business license and permit renewal
- Ongoing Registered Agent (required for the life of your business)
All the requirements can seem overwhelming to new business owners. However, if you stay on top of things from day one, you’ll be less overwhelmed, and you can ensure your business is in good standing with all local, state, and federal agencies.
We recommend doing some research on the requirements you’ll need to satisfy for your specific business type. Then, make a list, complete with due dates. You can also set reminders in your calendar app to ensure that you never miss an important filing.
If you want help, services like ZenBusiness can help by reminding you of key dates, and even helping with some filings like Annual Reports. For many business owners, it’s worth the cost to use a professional service.
About BOI Reports…
To legally operate an LLC, owners need to understand BOI reporting laws from the Corporate Transparency Act and provide accurate owner details to the Financial Crimes Enforcement Network (FinCEN) to avoid penalties. Find out more about BOI reporting here.
Open a business bank account
All new businesses should open a business bank account before they start operating. This allows you to keep your finances separate from your business finances, which is very important.
To open a business account, you’ll likely need your business license, EIN, and other important documents. Call your bank to discuss your options, and find out what their requirements are. Most financial institutions offer business banking solutions today.
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