How to Form an LLC in Connecticut | Guide on Connecticut LLC

Forming an LLC (Limited Liability Company) in Connecticut is easy and affordable. The following are few procedural steps on how to start an LLC in Connecticut. LLCs forms in two ways, domestic and/or foreign. Suppose you are planning to set up an LLC in states other than Connecticut, you can visit How to Start an LLC.

Connecticut LLC

Why an LLC in Connecticut

Connecticut is one of those original 13 colonies in the United States. Irrespective of the type of business, Connecticut is now having more than 340,000 small companies. The state is popular for the elite and some of the wealthiest citizens residing there. 

You can either have a Connecticut single-member LLC or other types of LLCs. There are many incentive programs or business funding options are available in Connecticut for entrepreneurs who are willing to start an LLC. 

Incentive Programs

Connecticut offers diverse incentive programs for the new entities. The main goal of such programs is to encourage newly set up businesses. Most of these incentive programs are created and handled by the Department of Economic and Community Development. Some of the programs offer an easy loan for business whereas some of the programs offer tax credits and other government benefits. 

Tax Exemptions

Personal & Real Property Tax – If you have installed new machinery or equipment in your manufacturing unit, you can get a 100% tax exemption for up to 5 years of time. 

Corporate Business Tax Exemptions – Corporate business tax exemptions are applicable to both domestic and foreign LLCs. To get this facility, LLCs have to meet the requirement for qualification. Once qualified, they can get tax exemptions.

Sales and Use Tax Exemptions – LLCs can enjoy this tax exemption on every purchase of tangible personal property for their business. 

Enterprise Zone Program

There are specific locations such as Bridgeport, Meriden, Hartford, and Norwalk with some more are called the Enterprise Zone. Anyone who started his/her businesses or starts an LLC in any of these areas will get a tax credit facility under this program. Businesses can get up to 100% tax credit for the first 3 years and then 70% tax credit for the next 7 years (total of 10 years). 

Apart from the above-mentioned programs, the state has more programs like debt financing, investment capital tax credit, and other programs to support small and newly set up entities.

How to Start a Connecticut LLC

Suppose you’re planning to invest in some profitable corporation or maybe about to set up businesses in Connecticut. In that case, forming an LLC in Connecticut is the simplest option for you.

An LLC or a Limited Liability Company a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. This section gives you a step-by-step guide on How to Start an LLC in Connecticut. 

Step 1: Decide a Name for Your LLC

If you are to start a Connecticut LLC, the first thing you do is decide on a corporation or company name, and how to name your LLC may be tricky. Thus, you have the option to choose a name that complies with the Connecticut business naming requirements. It must also be easily searchable for potential clients in Connecticut. Here is a step-by-step guide to follow when naming your Connecticut LLC. 

Why do you need a proper business name?

If you want your Connecticut LLC to have special identification, your company name is essential. However, many people face many issues by avoiding focus on choosing a corporation name for their LLC business formation filings.

Because of this, here are some of the major benefits of choosing the best LLC corporate names in Connecticut.

  • To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
  • After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
  • You can only get the EIN when you have your name registration certificate with you.

What are the requirements when deciding a name for your LLC? 

name search is vital to make sure your corporation’s name is unique. Check the availability of your name with Business Entity Search on the Connecticut Secretary of State’s website. Reserve the name by completing the Name Reservation Request Form for Domestic Entities.   

  • Don’t include words that could confuse people about your company. Words like ‘treasury, state department.’
  • You should also avoid restricted words like ‘bank, attorney, university,’ because they may require a lawyer and more paperwork.
  • As for a business website and your URL name, check if your name is still available for domain use with NameCheap.

Reserve a business domain

Even if you don’t have plans to set up a website today, it will help if you buy a domain to avoid others from using your name for their website, so do visit NameCheap for your domain name and Kinsta for web hosting.

If you have decided on your URL name and have reserved it, set up a professional email account with Google GSuite.  

Step 2: Assign a Registered Agent in Connecticut

A registered agent, or business entity, is a person that will act or work on your behalf. This person or corporation will receive significant tax forms, legal documents, a notice of lawsuits, and other official government correspondence in Connecticut. Choosing Connecticut-registered agents for your LLC is required. 

Make sure your registered agents are residents of Alabama. It could also be a business. Here are the recommended agents and employees for you:

These five LLC formation services are recommended agents’ registered services as they are authorized to conduct business in Connecticut. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years. 

Step 3: File Certificate of Organization in Connecticut

A Certificate of Name Reservation is needed to file a Certificate of Organization, as other states call it. You need to make reports of this certificate with the Connecticut Secretary of State, which costs $120. You may file them online or by mail. 

This Certificate of Formation is a legal document that forms your Connecticut business officially. It will indicate details about your Connecticut LLC, like if it is a member-managed or managers-managed.

Before you start filings, you must already have your Connecticut LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Connecticut LLC will offer.

How to File Online

Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online forms. The website will alert you if your county does not support online filings after selecting your principal county.

How to File by Mail

If you prefer filing real-life forms for your Connecticut LLC registration, then you can download the Connecticut Limited Company Certificate of Formation. Read the forms thoroughly and fill them out. It will have to fill, among others,  your name, city, state, zip code, and signature. 

Step 4: Create Your Connecticut LLC Operating Agreement

An operating agreement is a document that legally outlines the proprietorship and operating procedures of your Connecticut LLC. This document is vital as it ensures that all Connecticut business owners are on the same page regarding how they operate, thus reducing future conflicts. 

Starting an LLC in Connecticut does not require you to have an operating agreement, but it is ideal to have one that contains all your details of business operation.

Step 5: Filing a Connecticut LLC EIN

The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes. It is like a Social Security number dedicated to a business. 

It is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). You will need this number for taxation filing and to determine tax classification options.

Mail to:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: Free

After Starting your Connecticut LLC 

After forming your corporation in Connecticut, there are still some things that you will need. Take note of the following:

  • Get a company business account
  • File Connecticut business permits & licenses
  • Get liability for business insurance with coverage for employees
  • File a Connecticut LLC annual report or biennial report
  • Already existing LLCs that wish to operate in Connecticut must register as a foreign Connecticut LLC.  

This page has provided you with steps to Connecticut LLC formation and filing processes. You now have to remember upcoming filing fee deadlines, filing fees, and filing costs, including late filing fees, to make sure your LLC is up-to-date.  

What are the top 3 business beneficial business niches of Connecticut?

When a businessman is thinking of starting an LLC in Connecticut, they also has to check out the business options. One needs perfect planning and plotting to start a business before which it is important to find a profitable business in Connecticut. To help you out, here is a list of the best businesses to establish in Connecticut.

1. Finance and Insurance

Connecticut is very much famous for the name of insurance capital, and the reason behind it is the insurance businesses formed in the state. The state is known to create maximum jobs for the insurance people and has the highest amount of insurances. That is why the demand for insurance business is still increasing, which means that a person can invest in this niche easily and make some profits.

2. Transportation business

There are plenty of large-scale manufacturing businesses that have established in the Connecticut state. More than one-third of the manufacturing of the country is done in the state of Connecticut, due to which the requirement of transportation services is very high. This makes it a profitable niche to be considered to start a business in Connecticut.

3. Tourism and Entertainment

Tourism is very active in the state of Connecticut. Many people keep visiting the state to visit the local attraction, due to which a business person can choose tourism business. If someone has a place to rent out, then they can remodel it into some cottage. A person can think of starting a casino business which can be a very profitable niche. Many people come to the state for the purpose of entertainment, which can make it very beneficial.

These are the best niches that one can choose to start a business in Connecticut. Other than these businesses, there are some small scale businesses that one can consider

·         Digital printing businesses

·         Microbrewery

·         Auto-repair services

Connecticut LLC Formation Review

Time needed: 1 hour and 5 minutes.

To recap, here are the easy steps again when forming an LLC in Connecticut. Click on the steps in this list to read the full detail.

  1. Name your Connecticut LLC

    The first thing you must do is to choose a company name, which should include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
    name llc

  2. Choose a registered agent

    In Connecticut, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
    get registered agent

  3. File a formation certificate

    Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
    file formation certificate

  4. Create operating agreement

    An operating agreement is not a strict requirement but something encouraged when you start an LLC.
    create operating agreement

  5. Get an EIN

    The Employer Identification Number (EIN), also called  Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
    get an ein

F.A.Qs

What is the difference between ‘domestic LLC’ and ‘foreign LLC’?

A “domestic LLC” is one that conducts business in a state where it was formed. Meanwhile, a “foreign LLC” is an existing LLC that extended business to another state.

What do I need for Domestic and Foreign LLCs?

For Domestic LLCs, it is vital to have a Certificate of Name Reservation and Certificate of Formation. For the foreign LLCs, you must have a Certificate of Good Standing.

Is the cost to form an LLC the same across states?

The cost to form an LLC varies per state.

Does an LLC need to use a DBA?

Seldom do L.L.C.s use D.B.A. or a ‘Doing Business As’ name nor a fictitious business name. However, if you want to have one, you make read more about DBAs here

Why are operating agreements important?

This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.

Is there anything else I should keep in mind when naming my LLC?

>Your name should have “L.L.C. or LLC” or the phrase “limited liability the business.” 
>Do not include words that could create confusion between your LLC and any government business. 
>Words like ‘bank, attorney, university’ are restricted as well. 
>Lastly, your name should distinguish from other limited liability corporations, limited partnerships, or registered limited liability partnerships.

Where can I file my LLC name?

Typically, you can file your LLC name online or by mail. Check with the state where you will set up your LLC name. Take note that the fees for business names may also vary per state.  

How can I know if my URL name is available?

As for a website and your URL name, check if your name is still available for URL use with NameCheap to see if your name is available as a web domain. Even if you don’t have plans to set up a website today, it will help if you buy a URL. Buying it can help to prevent others from getting your name; check out WPEngine, Kinsta, and GoDaddy for hosting and building your website. 

Can I mail the LLC Certificate of Formation to the Secretary of State?

No. Never mail these documents or payments to the Secretary of State directly. 

Why do I need an EIN?

The reason you might need an E.I.N. is that it would help for three reasons:
>Opening a business bank account
>Filing and managing federal and state taxes
>Hiring employees or agents

How do I get an EIN when I do not have a Social Security number?

You are not required a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.

I already have an EIN for a sole proprietorship; what now? 

Note that an LLC is different from a sole proprietorship. If you already have an EIN for your sole proprietorship, the IRS will require you to get a new one when your convert to an LLC. 

Do foreign applicants need an SSN to get an EIN?

International EIN applicants do not need an SSN to get an EIN.

What is an IRS?

The IRS is the one that will issue your EIN. You can request an EIN from the IRS ONLINE or download the FORM, fill it out, and send it by mail or fax.

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