Starting a business in the form of an LLC or limited liability company is a very smart idea. There are many reasons why starting a company in the form of a LLC is beneficial. More than anything else, a limited liability company provides you with a certain measure of legal and financial protection in the event that your company lands itself in hot water. Today, we’re going to teach you exactly how to start an LLC in Connecticut.

If your company gets into trouble, if it is an LLC, legal and financial ramifications affect the business itself and not you personally. Furthermore, there are also other tax advantages, as well as other benefits, to starting an LLC.

With that being said, starting a limited liability company is not always easy, and there are a few steps you have to follow. If you follow all of the steps as listed below, starting an LLC in the state of Connecticut should not be a problem at all.

1. Choose a Business Name

To start an LLC in the state of Connecticut, you first have to choose a name. The name for your limited liability company has to end with the words “limited liability company”, or any of its abbreviations, which could include LLC or L.L.C. If you need help coming up with a name ideas, you could use our free business name generator.

It’s at the time of choosing your name you are not yet ready to file your articles of organization, you can reserve a business name for up to 120 days, which costs $60. You’ll have to include your name, address, signature, title, and the name of the company you wish to reserve, along with the execution date.

Another naming requirement for your LLC in the state of Connecticut is that your name can’t be taken by any other business in the state. Furthermore, for legal reasons, your business name should also not be taken by any other company in the whole country. Therefore, we recommend checking with the Secretary of State to see if your business name is already in use or not.

Also consider that your business name should be available in terms of a domain name. Chances are almost 100% that you require a website to operate your business in an efficient manner.

We strongly recommend choosing a business name where the domain name is also available, as the business name and domain name should always be the same, or else people will have trouble finding who you are. Therefore, we recommend also doing a domain name check to see availability.

2. Appoint a Resident Agent

To legally start a limited liability company in the state of Connecticut, you also need to have a registered agent. A registered agent is an entity that is authorized to accept legal documents, tax documents, and other such documents on behalf of these limited liability companies.

The registered agent is also responsible for telling members that such documents have been received. A registered agent in the state of Connecticut may be either a business that provides such services or an individual. If you plan to choose a company to serve as your registered agent, the company in question must provide this specific service.

However, any individual can serve as the registered agent. However, to serve as a registered agent for a company in the state of Connecticut, that registered agent must have a physical address in the state, and they must be available on site during regular business hours to accept documents.

3. File the Articles of Organization

Perhaps one of the most important aspects of starting a limited liability company in the state of Connecticut is filing the articles of organization. You can consider this your official application to form a limited liability company.

To register your LLC in the state of Connecticut, you need to file your articles of organization with the Secretary of State, and there are a few important pieces of information that you have to include in these documents. The pieces of information include the following:

  • Your name and address.
  • The name of the limited liability company.
  • The address of the principal office of the LLC.
  • Description of what the business is and what it does.
  • The name of the registered agent and their address.
  • Your signature of the registered agent.
  • The names of all managers and members, their titles, and their addresses of residence.
  • The type of management structure that the LLC has.
  • The date of execution.
  • The organizers name and signature.

You also need to know that it may take up to six weeks for the Secretary of State to either accept or deny your application. Furthermore, the filing fee is roughly $120, and if you want to expedite the process to be approved within 24 hours, it may cost up to $50.

4. Get Your EIN from the IRS

Once you receive your official approval from the state of Connecticut, you then need to get what is known as an employer identification number or simply the EIN. The Internal Revenue Service or IRS provides all businesses in the USA with this employer identification number, and it is 100% necessary that you have one in order to legally operate a limited liability company in the state of Connecticut.

If your LLC has two or more members, which is highly likely, an EIN is required. The employer identification number allows you to perform various functions, such as paying taxes. Of course, paying taxes is a legal obligation of any business, and without an EIN, you can’t pay taxes.

Therefore, to legally run a business, you have to have such an employer identification number. You also have to have an employer identification number if you have employees. An employer identification number is essential for business loans, opening bank accounts, and other business activities.

5. Draft an Agreement of Operation

Connecticut doesn’t mandate LLCs to have an operating agreement, but it’s advisable. This document offers crucial information about your company. There are various pieces of information that can be included on such a document, including the following:

  • The names of all members and managers.
  • The name of the registered agent.
  • The purpose of the company and the market it is in.
  • How profits and losses will be divided.
  • The division of the company.
  • Bringing on or losing members.
  • Dissolution.

6. Register the LLC with the Department of Revenue Services

What’s your operating agreement is in place, you then need to register your limited liability company with the Department of Revenue Services for the Connecticut Business Entity Tax, otherwise simply known as BET.

In Connecticut, all LLCs face taxation, which starts in the year the articles of organization are filed. It continues until the LLC is terminated with filed articles of dissolution.

In Connecticut, an LLC pays about $250 in taxes annually. This amount is due before the 15th day of the fourth month after the LLC’s taxable year ends. A payment that is made late is subject to additional fees. Registration and paying with BET can be done in person or by mail.

7. Continuing Legal Obligations

In the state of Connecticut, all limited liability companies have to submit annual reports every year. This can be done online, and the filing fee is roughly $20. You must also think about your LLC’s taxation. In Connecticut, all limited liability companies are taxable.

A limited liability company can be treated as a limited liability partnership, in which case Form 1065 must be filled out to show that there is an equal distribution of profits among members. If an LLC is being treated as a C corporation, you must fill out form 8832, and you have to be choose to be taxed as a corporation, and you have to file a form 1120 as well.

If your LLC is treated as an S corporation, you’ll have to fill out form 1120S, and an LLC being treated as a sole proprietorship must fill out form 1040.

Conclusion

Starting an LLC in Connecticut is straightforward if you follow the steps. Missing any information may lead to a denied application by the Secretary of State. You’d then need to start over.