Step-by-Step Guide: How to Set Up Your LLC in Connecticut | Expert Connecticut LLC Formation | BetterLegal
Learn how to establish your LLC in Connecticut hassle-free with our comprehensive guide. Follow our step-by-step instructions and expert tips to navigate the process of forming your LLC. Get started today!
Are you considering setting up an LLC in Connecticut? BetterLegal has developed a complete yet concise guide to help you through the process through our years of experience. The five critical steps to properly set up an LLC in Connecticut in order are:
- Prepare by choosing a Name and Registered Agent
- File Certificate of Formation with the State of Connecticut
- Apply for an EIN with the IRS
- Obtain an Operating Agreement
- Handle Ongoing Connecticut Compliance and Maintenance
What are the benefits of setting up an LLC in Connecticut?
An LLC (Limited Liability Company) is a fairly new business structure which combines the best aspects of two older structures. Corporations have existed since before the US existed, but require heavy maintenance such as quarterly meetings with officially recorded minutes, board approval and distribution of ownership, and more. On the other side of the spectrum is a sole proprietorship (or partnership if more than one person) that possesses tax benefits, but doesn't provide the owners with liability protection.
Combining the liability protection of a corporation and the tax benefits of a partnership, LLCs were created and slowly adopted by all 50 states between 1977-1998. This means that, as the owner of an LLC, you are not personally liable for any debts or obligations of the business. This can be a crucial safeguard for a sole proprietor, as transitioning to an LLC protects your personal assets, such as your home or savings, in the event that the business is sued or faces financial difficulties.
In addition to liability protection, an LLC helps establish credibility for your business. When you officially register your business as an LLC, you are signaling to the public that you are a professional and legitimate operation. This is especially important for a sole owner of a business as customers have more options than ever and are more likely to choose a company that feels more trustworthy. Any credibility you can build with your future customers is extremely important.
1. Choose a Name and Registered Agent in Connecticut
The first step in setting up an LLC in Connecticut is choosing a name for your business. The name you choose will represent your company and be used on all official documents, so it's essential to take the time to carefully consider your options.
It may seem tempting to have a very specialized name like "Irene's Connecticut Ice Cream." However, if you're still iterating on your business offering or may expand, a somewhat generalized name may work in your favor. Don't fret too much as you can always change a Connecticut LLC's name or use a nickname by filing a Connecticut DBA. More on those post-formation options can be found under Step 5: Changes and Maintenance.
It's important to choose a name that is unique and not already in use by another business. You can use the Connecticut Secretary of State's name check service to verify the availability of your desired LLC name. If you are having trouble accessing the name check service, you can also call the Connecticut Secretary of State.
When choosing a name for your LLC, it's important to keep the following guidelines in mind:
The LLC name must include a business designation, such as Limited Liability Company, LLC, L.L.C., Limited Liability Co., Ltd. Liability Company, or Ltd. Liability Co.
When choosing a name, it's also important to consider available domain names and social handles. One of our early customers owned austineventcollective.com as well as austineventcollective across every social platform. Unfortunately, someone in Connecticut already had a registered "Austin Event Collective LLC" and rejected her filing.
If you're not ready to file, it is possible to reserve your Connecticut LLC's name before officially registering your LLC with the Connecticut Secretary of State. Please note that this is an additional and separate cost from officially filing your LLC and only holds the name, so you have to decide whether reserving a name for a few months is a better option than simply setting your Effective Start Date for the future (more on this in Step 2).
Choosing a Registered Agent
The next step in setting up an LLC in Connecticut is choosing a registered agent. This person or entity will be responsible for receiving official mail from the State of Connecticut and legal documents on behalf of your business.
The Registered Agent address must be located in Connecticut
It's worth noting that this information is considered a public record and may be accessed by anyone. This means that anyone can view the names and addresses of the managers or members of your LLC by requesting a copy of your Certificate of Organization from the Connecticut Secretary of State. If you are concerned about privacy, you may want to consider using a third party to act as a registered agent for your LLC rather than using your own personal information. This step helps protect your operator's and owner's privacy and shield your personal information from public view.
There are countless options for Registered Agent Service, but we believe BetterLegal provides the best value. Click here to sign up.
Some additional guidelines in Connecticut for Registered Agents:
The Registered Agent may be an individual or a registered entity in CTNote: An individual or business entity must be appointed to accept the legal process, notice, or demand served upon the Limited Liability Company.
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Prepare and File the Connecticut Certificate of Organization
Once you have chosen a name and registered agent for your LLC, you'll need to file the Certificate of Organization with the Connecticut Secretary of State for a fee of $120 which is non-refundable and provide a digital, scanned, or wet signature of the organizer.
Filing Options
1) Online - Go to https://service.ct.gov/business/s/brsflow and fill out the online form to form LLC.
2) By Mail
(a) Use this form - https://portal.ct.gov/-/media/SOTS/Business-Services/BSD-Forms/Limited-Liability-Company/Domestic/Cert-of-Organization-LLC-Domestic-2020-Final-Version.pdf
(b) Mail the Certificate of Organization and the $120.00 filing fee to:
Business Services Division
Connecticut Secretary of the State
P.O. Box 150470
Hartford, CT 06115-0470
Payment Options
If filing online, you may use credit card or ACH
If filing by mail, you may use money order or check and make payable to “The Secretary of the State."
Turnaround Time
The turnaround time for LLC formation in Connecticut is advertised by the Secretary of State as within one (1) to three (3) business days if LLC application was submitted online. However, if it was submitted by mail, it can take up seven (7) to ten (10) business days. Moreover, if the state is experiencing delays in processing, the approval time can take up to three (3) to five (5) weeks. Keep in mind that this can take longer based on state examiner's workload at the time of filing. BetterLegal's internal experience with Connecticut is one (1) to three (3) business days from the date of registered agent appointment confirmation, as long as the filing request was received during BetterLegal's operating hours (Monday to Friday from 9 a.m. to 7 p.m. EST). Also, take note that the State of Connecticut requires that the registered agent confirms their appointment directly with the state, through an email sent by the Secretary of State. Hence, if you appointed a registered agent other than BetterLegal, please make sure that you inform your registered agent about this appointment confirmation. Otherwise, you may avail of BetterLegal's registered agent service to ensure the timely acceptance of the appointment. Without this confirmation, BetterLegal's filing will be automatically rejected by the state. Connecticut provides an expedited review of the LLC application for $50. The turnaround is 24 hours.
Please note that the Secretary of State's office in Connecticut is closed on weekends and state holidays. The office is open from 8:00am to 5:00pm, Monday through Friday.
Also note, that you should not apply for an EIN (Step 3) until Connecticut has approved and delivered your Certificate of Organization in case your LLC's name is rejected.
Setting a Future Effective Date
If you want to set a future "start date" for your LLC, this Future Effective Date is not allowed in the State of Connecticut.
Address Requirements
In Connecticut, you're required to provide Principal Office Address Your Connecticut LLC’s Principal Office Address can be: • located in Connecticut • located in any state • located in any country • a home address • an office address • a mailbox rental address • a virtual office address • the address of your Connecticut Registered Agent (if your Registered Agent allows it), Registered Agent Address: Must be in Connecticut If you want your address information to be private rather than public record, make sure your Registered Agent allows for all addresses. BetterLegal's $90/year service provides full privacy.
State's Mailing Address: Mailing address must be in Connecticut
Manager Information
The Manager's Information section of your LLC's Certificate of Organization may include the names and addresses of the managers or members of your LLC. Here is extra information Connecticut will want to know about your Managers:
1) Manager's Name - It may be an individual or non-individual manager. Members and managers may be individuals, partnerships, corporations, and any other type of legal entity.
2) Manager's Address - This may be a business or post office box address.
Receiving your documents
After the Certificate of Organization has been filed and accepted by the Connecticut Secretary of State, the LLC is officially formed. Here's what Connecticut will provide back to you based on your method of submission: If filed online, by email If by mail, approved documents will be mailed to the return address
The official deliverables will include: the following documents:
1) Plain copy of the approved Certificate of Organization
2) Acceptance Letter
You should keep a copy of the Certificate of Organization for your records and use it to open a bank account, apply for business licenses, and conduct other business.
What if my filing is rejected?
If your filing is rejected, you'll receive information from the Connecticut Secretary of State explaining the reason for the rejection. You can then make the necessary corrections and resubmit your documents. You need to refile, fees are non-refundable
Additional information
Approved Certificate of Organization may sometimes arrive in the same email, or sometimes you will receive 2 separate emails.
Apply for an EIN from the IRS
Obtaining an Employer Identification Number (EIN) is a crucial step in starting an LLC in Connecticut because banks require it to open a business bank account and the IRS requires it to pay taxes. So if you plan on making money, you'll need one. You don't need to employ anyone to need an EIN, it's simply a poor name choice by the IRS for what is essentially your LLC's Social Security Number or Tax ID.
An EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business for tax purposes and formatted as 12-3456789. EINs are free to get from the Internal Revenue Service's website, but can be tricky if you're not careful when answering their questions.
An EIN is a Tax ID for the federal government, it is not your Tax ID for the State of Connecticut.
Here are some key points to keep in mind when obtaining an EIN for your LLC:
- A Sole Proprietorship's EIN cannot be transferred to your Connecticut LLC.
- A Manager or Member must provide their personal information to link the EIN to your Connecticut LLC.
- You cannot use an existing business' information for an EIN since a business doesn't have a Social Security Number.
- If you're not a US citizen that is in possession of an SSN, you will need to first obtain an ITIN before applying for an EIN through a paper filing.
- Once the EIN is obtained, it must be included on all federal tax returns and other documents that require the business's tax identification number.
- Keep a copy of the EIN confirmation letter for your records.
It's important to note that the EIN is for tax purposes only and does not give any rights or privileges to the holder.
The turnaround time for an EIN is instant and the fee is $0. However, the IRS' website that generates EINs only works normal business hours EST, so it's a good idea to plan ahead if getting this item is time sensitive. Also note, that you should not apply for an EIN until Connecticut has approved and delivered your Certificate of Organization in case your desired business name is rejected.
Obtain an Operating Agreement
An operating agreement is an important document for any LLC, as it lays out the rights and responsibilities of the members (owners), as well as the management structure of the LLC. It's not a mandatory document filed with the State of Connecticut, but it's highly recommended to have notarized as it can help prevent disputes and misunderstandings among members later on.
While it's your preference to decide whether the Connecticut LLC is manager-managed or member-managed, BetterLegal prefers to set up LLCs as manager-managed since an individual can be both a manager and a member. If a manager/member wants to become passive at a later stage of the company and the Operating Agreement is set up as member-managed, then it opens up a can of worms that could have been avoided by retaining the separation of duties from the beginning.
Here are some key points to keep in mind when creating an Operating Agreement for your LLC:
- Identify the members of the LLC and their respective ownership percentages.
- Outline the decision-making procedures, such as how many members must be present for a meeting to be considered quorate and how many votes are required to pass a resolution.
- Specify the process for admitting new members or removing existing members.
- Include information about how profits and losses will be distributed among members.
- Set out the procedures for amending the Operating Agreement and dissolving the Connecticut LLC.
This is an important document for a Connecticut Limited Liability Company and is too often overlooked or skimped on. If setting up a single-member LLC, be wary of professionals that charge hundreds or thousands of dollars for a single-page document. We have seen attorneys charge $3500 for a simple document providing zero ability for supporting multiple owners in the future. While you may start as a sole owner, that may not always be the case. It's best to plan ahead during these early phases before the grind of entrepreneurship sets in.
We've also seen instances where an individual helping with the business early on later claims ownership upon the business' later success. Never refer to someone paid or unpaid as a "partner" in public, especially if you don't have a signed and notarized Operating Agreement in place.
If you're setting up your Connecticut LLC on your own and need an Operating Agreement, BetterLegal can provide one for a reasonable fee.
The Operating Agreement should be reviewed periodically and updated to ensure that it accurately reflects the current state of the Connecticut LLC.
BetterLegal has helped tens of thousands of business owners across the US set up their LLC. Sign up today to start yours!
State Compliance and Maintenance
As an LLC in Connecticut, you'll need to comply with certain Connecticut regulations.
This includes, but not limited to:
- Obtaining any necessary licenses and permits
- Keeping records of your business's financial transactions
- Staying on top of Connecticut's Annual Report
- Notifying the State of changes to your LLC
Commonly Asked Questions
Can I file an LLC in Connecticut myself?
You can file an LLC in Connecticut yourself by visiting the Connecticut Secretary of State's website and submitting the necessary paperwork and fees. The process involves filling out the Certificate of Organization and paying a filing fee. Additionally, you will need to choose a unique name for your LLC and appoint a registered agent for your business. Once you have completed the necessary steps and paid the filing fee, you can submit your application to the state for review and approval.
How much does it cost to file an LLC in Connecticut?
The cost to file an LLC in Connecticut is $120. This fee is for filing the Certificate of Organization with the state and is non-refundable. You may also need to pay additional fees for obtaining a registered agent or for expediting the processing of your application.
Can you file an LLC in Connecticut for free?
No, there is a fee to file an LLC in Connecticut. The fee for filing an LLC is $120 and is non-refundable. You may also need to pay additional fees for obtaining a registered agent or for expediting the processing of your application.
How fast can you get an LLC in Connecticut?
The turnaround time for LLC formation in Connecticut is advertised by the Secretary of State as within one (1) to three (3) business days if LLC application was submitted online. However, if it was submitted by mail, it can take up seven (7) to ten (10) business days. Moreover, if the state is experiencing delays in processing, the approval time can take up to three (3) to five (5) weeks.. This turnaround can take longer based on state examiner's workload at the time of filing.
Can I file for an LLC in Connecticut Online?
Yes, you can file for an LLC in Connecticut online through the Connecticut Secretary of State's website. The process involves filling out the Certificate of Organization, choosing a unique name for your LLC, and appointing a registered agent. Once you have completed the necessary steps and paid the filing fee, you can submit your application to the state for review and approval.
What is the minimum number of members in a Connecticut LLC?
The minimum number of members in an LLC is one. An LLC can have any number of members, and the members can be individuals or other entities such as corporations or other LLCs.