Step 1) Verify & Secure Your Brand Name
Choosing a stellar business name is the very first step toward forming -- and branding -- your corporation. Connecticut requires your brand name to:
- Be “distinguishable” from any existing business in Connecticut. This essentially means that your name is not already taken by another business in the state.
- Contain the word “corporation”, “company”, “limited”, “incorporated”, or an abbreviation of one of these.
Keep in mind that this a formal title used for legal purposes, but it’s also a key step toward creating your brand. Make sure you pick a name that’s easy to differentiate from other businesses, and that captures what your company has to offer.
What To Do:
Do a business name search on the Connecticut Secretary of State website to find out if your preferred name is available. If it’s already taken, you’ll need to take the necessary steps to make your name distinguishable (switch up the arrangement or spelling, or consider rethinking your name altogether). If it is available, you have the option to reserve it for $60.00, but this isn’t a requirement in Connecticut.
While you’re at it, you should also head over to GoDaddy to see if there’s a good domain name available for purchase. Having a well-constructed business website with a memorable domain name goes a long way, so we recommend locking down a decent URL ahead of time -- even if you’re not going to build a website right away.
Quick Note: Before you commit 100% to a name, you may also want to check that there’s a decent URL available for your business. Use WEEBLY to search your options. If there’s a quality domain name for purchase, we advise buying it right away. Even if launching a business website isn’t on your radar right now, it’s going to be soon, and you might as well nail down a domain name that’ll make it easy for customers to find you!
Step 2) Appoint A Registered Agent
Before you can officially form your corporation, you need to choose someone to act as your registered agent.
Your Connecticut registered agent must be a resident of the state, or a business authorized to operate in the state. They’ll be responsible for accepting tax forms, service of process notices and other legal documents on behalf of your corporation.
Connecticut does not prohibit members of a corporation from acting as the company’s registered agent, but we encourage you to consider appointing a third-party professional since they will be required to:
- Maintain normal (9-5, M-F) business hours at their home or business address
- Publically link their address to the corporation
- Accept service of process notices
- Sort all mail carefully and promptly to avoid missing important deadlines
It’s totally possible for you to act as your corporation’s registered agent, but as you can see it’s an added commitment to take on -- especially on top of running a business.
What To Do:
If you’re thinking about taking on this responsibility yourself, have a quick read over our registered agent guide. If you decide you’re up for the task, go ahead and sign yourself up on the Certificate of Incorporation.
Otherwise, I’d recommend checking out IncFile. They include a free year of registered agent services when you incorporate in Connecticut with them, which is a pretty good deal.
Step 3) File Certificate Of Incorporation
Once you’ve got the first two steps sorted, it’s time to file your Certificate of Incorporation. After this, you’ll be a full-fledged corporation in Connecticut! This document will ask for:
- The name and purpose of your corporation
- Your registered agent’s name, physical address and mailing address
- The total number of authorized shares and number of shares per class
- The name and signature of your incorporator(s)
Connecticut gives you the option to file online or on paper, and either way you’ll be required to pay the $250.00 filing fee. If you choose to take care of this step in hard copy, you’ll mail in the document and payment to the following address:
Commercial Recording Division
P.O. Box 150470
Hartford, CT 06115-0470
Alternatively, if you file online, you’ll take care of everything (including the filing fee) through the Secretary of State website.
What To Do:
That said, you also have the option to let a professional handle this task. Using an online incorporation service is a hassle-free way to form a Connecticut corporation, and feel confident that everything has been filed correctly.
Step 4) Obtain EIN
Every corporation in Connecticut is required to obtain an EIN, or Employer Identification Number. Your EIN is used by the federal government to track your business’ financial activity, and it’ll be necessary for pretty much every major move you make from here on out -- including hiring employees.
It’s also important to obtain an EIN as quickly as possible because it’s required to open a business bank account. Unlike a personal bank account, for which you’d provide your social security number, a business bank account requires an EIN.
What To Do:
The easiest way to obtain your EIN is through the IRS free online application. By filing online, you’ll get an EIN as soon as you’ve completed the application process. To learn about some other DIY ways to get an EIN for free, take a look at our EIN guide.
If you find that you’ve got your hands full with other aspects of running your business, you can always add EIN service to an online incorporation package. The only real downside is that it often costs around $70 extra, unless you purchase a high-tier package that automatically includes this service.
Step 5) Meet With Directors & Establish Bylaws
While other states require corporations to have at least three directors on their boards, Connecticut only mandates one. Once you’ve selected your director(s), it’s time to get together with them and conduct your organizational meeting. During this meeting you should be ready to discuss:
- Your corporate bylaws
- The issue of stock shares
- Appointment of corporate officers
- The corporation’s fiscal year
- Your banking resolution
This is also when you’ll record your very first meeting minutes. Your organizational meeting is a pretty big moment for your corporation, so it’s crucial that you take the time to discuss each of these matters in-depth.
What To Do:
A great way to prepare for your organizational meeting is to take advantage of online meeting minute and bylaw templates. Several companies offer free versions of their templates to allow you to get comfortable with the content, which is great if you’re totally new to the process.
If you have any specific questions or concerns about Connecticut’s corporation requirements, you can always find the answer by searching through the CT corporation statutes.
Step 6) Start A Corporate Records Book
By now you’ll have accumulated quite a few essential pieces of paperwork, and you’ll need a place to put them all. A corporate records book is exactly what it sounds like -- a place to keep all of your business records. This includes, but is not limited to, your:
- Certificate of Incorporation
- Licenses and permits
- Corporate bylaws
- Meeting minutes
- Banking resolution
The presentation of these documents is really up to you. Some entrepreneurs opt for a simple binder, while others choose to invest in a corporate kit. Corporate kits typically include customized pieces like an embossing seal, stock certificates, meeting minutes and corporate bylaws, along with a lovely leather binder with your company’s name engraved on it.
What To Do:
If you’re interested in getting a full-on corporate kit, we’d recommend checking out an incorporation provider’s rates for these.
That being said, if you’re not too concerned about having customized pieces and you’re just looking for a simple binder, you can always head over to your local office supply store. Regardless of which option you choose, the most important part of this step is that you establish a centralized location for all of your essential documentation.
Step 7) Open A Business Bank Account
Opening a business bank account is a crucial step for your corporation, and one that must be done before making any big financial moves.
Basically, you need to separate your personal and professional expenses as quickly as possible. Since you’ll use your EIN instead of your social security number to open this account, it’ll be totally separate from your personal finances.
Ideally you’ll have settled on a bank during your organizational meeting, and hopefully you’ll have considered:
- Local banks, like Webster Bank and Liberty Bank
- Local credit unions, like Members Credit Union
- National banks, like Wells Fargo and Bank of America
You can expect different features and perks from each of these options, so it’s best to do a decent amount of research before committing to one. However, as we mentioned, it’s important to get this done promptly so you can start managing your business finances like a pro.
What To Do:
While researching your business banking options, consider customer service, national ATM accessibility, minimum balances, and any other features that are important to you. If you’re interested in using a national bank, consider reading our Wells Fargo and Bank of America reviews. There are several national banks that operate in Connecticut, but these two have the most locations statewide.
Once you’ve opened up your business bank account, make sure to sync it with an accounting software to start monitoring your financials pronto. This is especially important if you haven’t hired an accountant yet. We’ve ranked our favorite accounting software tools to help you choose the most reliable, user-friendly program.
Step 8) Handle Taxes & Licensing Requirements
The final step is to obtain any permits or licenses required of your corporation and take care of any special taxes you’re obligated to pay. This will involve quite a bit of research at the federal, state and local level, so we’ve gathered a few online resources to help you along the way:
- Federal: Head to the federal licenses and permits page on the Small Business Association website to find all the business activities that require special licensing and the corresponding government agencies. As far as federal taxes go, the business taxes page on the IRS website is a great resource.
- State: You can apply for or renew a Connecticut business license through the CT eLicense website. Their Business Startup Tool is also a smart thing to have bookmarked -- it includes a helpful page with links to state-specific licensing requirements.
- Local: To make sure you don’t overlook any locale-specific requirements, give your local Chamber of Commerce a call or visit.
If you only need a general business license, this step won’t be too much of a hassle. It really just depends on whether or not your industry is highly monitored by the state and/or federal government.
What To Do:
If it turns out you’re going to need a wide array of permits and licenses to legally conduct business in Connecticut, you might want to look into hiring a business license service. These companies know the ins and outs of business licensing, so if you leverage their services you’ll be able to trust your business will end up fully compliant.
Need Help Incorporating?
Starting a corporation in Connecticut is definitely a labor of love, but one that’s well worth it in the end.
If you need a helping hand during the incorporation process (which most folks do), there are a ton of resources out there to help lighten your load. Although we’ve mentioned quite a few services throughout the course of this guide, these are the three that we most recommend looking into:
– IncFile ($49 + state fees) = Best Price & Overall Value
– LegalZoom ($149 + state fees) = Most Popular Service
– Harbor Compliance ($499 + state fees) = Better Customer Service