Form An LLC
Step 1) Verify & Secure Your LLC Name
First off, in order to launch a successful Connecticut LLC, you need to give it the right name. Your business name needs to be catchy for branding purposes and legitimate for legal purposes. We go into depth on this topic in our LLC naming guide, but we’ll go over the legal basics below.
Legally, your business name must:
- Contain the words limited liability company or limited company, or the abbreviation LLC or L.L.C.
- Not contain restricted words or phrases (these often include words like bank, attorney, and university) without the proper approval.
- Be distinguishable from any other entity or trade name registered in Connecticut. The related legislation provides a bit more detail.
If you’re having trouble coming up with a name that captures your brand, don’t let that stop you from forming your LLC. For now, you can focus on the legal requirements and consider filing a DBA (doing business as) name after you’ve nailed down your branding..
What To Do:
Once you’ve decided what you’d like to call your LLC in Connecticut, do a business name search to find out whether or not it’s in the cards. If your business name is available, you’ll be able to lock it down when you file your Certificate of Organization.
Quick Note: Before you commit 100% to a name, you should see if there’s a decent URL available. Use Weebly to search your options. If there’s a quality domain name for purchase, we advise buying it right away because even if launching a business website isn’t on your radar right now, it’s going to be soon.
Step 2) Appoint A Connecticut Registered Agent
When you file your Articles of Organization, you will be asked to appoint a Connecticut registered agent.
Your registered agent will be responsible for receiving important legal documents like tax forms and service of process notices on behalf of your LLC. Your registered agent can be an individual resident of the state or a company that’s legally authorized to represent businesses in Connecticut.
Connecticut does give you the option to act as your own registered agent, but many business owners choose to appoint a professional instead. Here are a few things to think about before you decide to act as your own:
- You’ll have to maintain normal (9 am - 5 pm) business hours at the address you provide.
- If you run your business from home, you’ll be required to make your personal address public.
- You must keep up on important notices, dates, and deadlines.
- You could be served in front of your family or coworkers.
Step 3) File Certificate Of Organization
Congratulations on getting to this step! Once you’re through filing your Certificate of Organization, you’ll be a legitimate Connecticut LLC. But before you start celebrating, let’s take a look at some of the information this document will ask for:
- The filing party (who and where to send confirmation to)
- Your business’ name and principal address
- Your registered agent’s full name, business address and residence address
- Manager or member information
- The name and signature of the organizer(s)
If you choose to do this in hard copy, you’ll mail the completed document and a $120.00 check to the following address:
Commercial Recording Division
P.O. Box 150470
Hartford, CT 06115-0470
...or physically bring it to this address:
Commercial Recording Division
30 Trinity St.
Hartford, CT 06106
If you’d rather take care of this step digitally, Connecticut also offers online filing. You can start the process here whenever you’re ready to go.
What To Do:
It’s totally possible to handle this step on your own, but it can be a lot to juggle alongside your other startup obligations. We recommend at least considering the help of an LLC formation service. They’ll handle everything for you and make sure your Certificate of Organization is filed perfectly. Have a look at our top 7 business filing services to learn about these providers’ pricing and features!
Step 4) Draft An Operating Agreement
Creating an LLC operating agreement is the only way for you and your members to fully define your roles and lock down your LLC’s management and ownership structure. Having this document in place will also give you all something to return to if a dispute or lawsuit arises.
Your operating agreement should outline the following:
- each member’s responsibilities
- how new members will be admitted
- how existing members may transfer or terminate their membership
- how profits and dividends are to be distributed
From there, you can add as many provisions as you want, provided they are not in conflict with Connecticut business law. To access a free operating agreement and learn more about how this document works in Connecticut, click here.
Step 5) Get An EIN
The Employer Identification Number (EIN), or Federal Tax Identification Number, is essentially a social security number for your company. State and federal agencies use this number to track your business activity.
Your EIN will come in handy when it’s time to:
- Open a business bank account
- File Federal and State taxes
- Hire employees
We think the best way to get an EIN is by using the free online application on the IRS website. We prefer this method because it’s the most efficient, but if you’d prefer to apply via phone, fax or mail, read through our guide to find out how.
Maintain Your LLC's Personal Asset Protection
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
You can protect your business with these two steps:
1. Opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
2. Getting a business credit card:
- Helps you separate personal and business expenses.
- Builds your company's credit history, which can be useful to raise capital later on.
Reduce the Liability of Your LLC
Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance are:
- General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
- Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
- Workers' Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. In Connecticut, businesses with one or more employees, excluding officers and LLC members, are required by law to have workers' compensation insurance. Get a free quote with ADP.
The final bit of business you need to take care of is obtaining any licenses and permits required of your LLC, as well as paying any necessary taxes. After this, you can focus wholeheartedly on building your brand!
Check out these resources to learn about federal, state and local compliance requirements:
- 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, as well as 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 a general Connecticut business license through the CT eLicense website. Their Business Startup Tool is also a good 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 city or county-specific requirements, give your local Chamber of Commerce a call or visit.
What To Do:
If all you need is a general business license, this step is pretty simple. However, 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 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.
Reduce Administrative Burden
There will be many demands on your time once you start your business. With that in mind, it’s a good idea to streamline your workflow and reduce administrative overhead from the get-go. The two most important business tasks to get help with are:
Getting your books in order right up front will save you headaches in the future. At the very least, you can have a professional setup your bookkeeping and accounting for you. This will save you money and time in the long run.
There are all in one services that will do your bookkeeping/invoicing/tax filing for you all for one monthly fee. Mazuma ($95/month) is a reliable all in one tax service.
2) Employee Payroll
If you have employees, a payroll service will save you a lot of time and also save you from having to become an expert on state compliance or employee tax withholdings and filings.
Gusto is a reliable and good payroll service for small businesses
Need Help Forming an LLC?
If you’ve got the time and energy, you may be able to handle the Connecticut LLC formation process on your own.
That being said, many entrepreneurs opt for professional help to make sure nothing slips through the cracks. If you’d like some help forming an LLC in Connecticut, read through our reviews of three of the most popular services available!
Note that this guide for forming a Connecticut LLC isn’t a legal document or legal advice. It’s for informational purposes and the information above is subject to change. For specific legal questions regarding how to form an LLC in Connecticut, consult with a business attorney.