How to start a Connecticut LLC

An LLC is a type of business that helps protect its owners (called members). This means that if the business owes money or gets sued, the members’ personal assets, like their house or car, are usually safe. 

In the state of Connecticut, an LLC is defined as “an entity formed under sections 34-243 to 34-283d, inclusive, or which becomes subject to said sections under the Connecticut Entity Transactions Act” (Connecticut Uniform Limited Liability Company Act chapter 613a section 34-243a). That means an LLC in Connecticut is a company created within the state or a company that becomes subject to Connecticut’s state regulations surrounding LLCs.

If that sounds like a lot of legal jargon – that’s because it is! What you need to know is that LLCs are popular with business owners because they are simple and flexible to run. They have fewer rules compared to comportations and the owners can choose if they want to manage the business themselves or appoint managers to do it. 

Another benefit is how taxes work: LLC owners can pay taxes through their own personal tax returns, or they can choose to have the business pay taxes separately, like a corporation. This gives owners more choices in how they handle taxes as their business grows.

Why should I register for an LLC in Connecticut?

You may want to register for an LLC in Connecticut when:

• You own or want to start a business in Connecticut, or want to expand an existing business into Connecticut, and want to stay legally compliant. 
• You own or want to start a business, and want more flexibility on how you will manage the business or pay taxes than a corporation would provide.
• You want to protect your personal assets from potential liability resulting from business you conduct in the state of Connecticut. 
• You own or want to start a business, and want to register in Connecticut to open accounts, lease or buy property, secure funding, or hire employees.

Do I need to file my LLC in Connecticut if I live in another state?

Any LLC that does business in Connecticut must file with the State of Connecticut. LLCs based in Connecticut are called "domestic LLCs," and out-of-state LLCs are called "foreign LLCs." Foreign LLCs and domestic LLCs may have different filing and compliance requirements -- Rocket Lawyer can help you navigate foreign LLC registration, regardless of where you live.

How to start an LLC in Connecticut

1. Find a unique name for your Connecticut LLC

The state of Connecticut requires that the names of all LLCs in the state:

• Include the term "LLC" or "Limited Liability Company," also known as an "entity designator." 
• "L.L.C." and the abbreviations "Ltd." and "Co." are acceptable.
• Avoid language stating or implying that the limited liability company or the foreign limited liability company is organized for a purpose other than permitted by subsection (b) of section 34-243h.
• Are not too similar to existing LLCs in the state, unless the company delivers to the Secretary of the State a certified copy of a final judgment of a court of competent jurisdiction establishing the right of the company to use the name in this state.

2. Include your other LLC members (if any)

In Connecticut, you can in fact form as a one-person LLC. In this case, the LLC would be referred to as a single-member LLC (SMLLC), whereas if there is more than one owner, the LLC may be called a multi-member LLC. 

The main difference between single-member and multi-member LLCs lies in ownership structure and management. With a single-member LLC, you have full control over the business. In contrast, a multi-member LLC has multiple owners, each with a specific percentage of ownership as defined in the operating agreement. This means that in a multi-member LLC, owners share profits, losses, and tax responsibilities based on their ownership percentage.

3. Provide a Connecticut address

This will be used as your official LLC address. The address that you list may either be your home, an office, or another physical location, but it cannot be a PO box.

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have a Connecticut address) or choose one to do that service for you (if you are not located in Connecticut or would like an extra layer of privacy).

5. Register your LLC with the state of Connecticut

Once you have a business name and registered agent, you can register your business as a Connecticut LLC with the Connecticut Secretary of State by filing your Certificate of Organization. In other states, this document may be called a "Certificate of Formation," "Certificate of Filing," or "Articles of Organization."

6. Get an Employer Identification Number (EIN)

Connecticut LLCs are required to have a Federal EIN tax number. Think of your tax ID as the social security number for your company. It will be important for business contracts, tax filings, and all manner of documents down the line. Every company should have one to remain in good standing.

7. Pay the state filing fee

Every state has different fees for forming an LLC, which can also vary from one year to another.

Congratulations! After you have completed all these steps, you have formed your Connecticut LLC.

What to do after forming a Connecticut LLC

There are a few steps you need to take to maintain your Connecticut LLC:

1. Create an Operating Agreement: we can help you create your Connecticut LLC Operating Agreement online.
2. Hold a meeting: a first meeting with members of an LLC is not required by law, but it is highly suggested in order to get organized. Also, unlike corporations, LLCs are also not required to maintain Meeting Minutes, but these documents are also recommended as they provide records for important decisions made.
3. Pay taxes according to how you chose to be taxed: traditionally, LLCs are "pass-through entities." This means that you pay your business taxes on your personal tax form. That said, you can elect to be taxed like a corporation, if you choose to do so.
4. File an Annual Report: this is a requirement every year for all Connecticut LLCs.
5. Get a sales tax license: this is only a requirement for certain types of LLCs in Connecticut. 

What is needed to keep records for my Connecticut LLC

Connecticut has no requirements for keeping any specific records pertaining to your LLC, but it may be required to hold onto records for taxes, employees, governance, management, and other vital operations of your LLC.

Still have questions? Rocket Lawyer can help you with the process of forming a Connecticut LLC. Get started today!
 

Key takeaways Registering an LLC in Connecticut can give you a lot more flexibility than a corporation, as well as protection for your personal assets from potential liabilities. Even if you live in another state, you must register your LLC in Connecticut if you do regular business there, like selling things or having employees. After starting your LLC, it’s advisable to create an Operating Agreement and hold a first meeting. You’ll also need to file an Annual Report every year and some LLCs need to have a valid sales tax license. Keep records of your Connecticut LLC, like the names of all members, tax documents, and your business rules. These help you stay organized and follow the law.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is an LLC
• How are LLCs taxed
• How to start an LLC
• Do I Need a Registered Agent?
• How and when to file an Annual Report