Setting up shop in the Constitution State is an exciting prospect for entrepreneurs.
Proximity to New York and Boston — two major economic hubs — but a lower cost of living than NY and MA make Connecticut an attractive base for new startups and small businesses alike.
LLC formation, in turn, grants some extra perks to its owners, such as diminished personal liability and personal assets protection.
But what’s the cost of setting up and operating a CT limited liability company (LLC)? Here’s a detailed breakdown of state filing fees and extra costs you may incur.
Table of contents
- Connecticut LLC formation cost: $120
- Extra Connecticut LLC costs to account for
- Does Connecticut have an annual LLC fee?
- What taxes do LLCs pay in Connecticut?
- Conclusion: How much does an LLC cost in Connecticut?
Connecticut LLC formation cost: $120
The Certificate of Organization is the primary document to start your domestic LLC in Connecticut.
The filing can be completed online or by mail. The filing fee is $120 in both cases.
Foreign LLCs wishing to do business in CT are also subject to the same fee of $120 for obtaining the foreign registration statement.
Online filings through the CT.gov portal are processed with blazing speed. You can often get your approved documents by 4 pm the next business day. Or within 2-3 business days as a standard.
Mail or in-person filings are also accepted, but there will be a longer processing time. Fax filings are not accepted.
The cost for expedited service is $50 per filing. In this case, you’re guaranteed to receive your documents by 4 pm the following business day after filing, regardless of the filing method.
Extra Connecticut LLC costs to account for
Your Connecticut LLC is created when your Certificate of Organization is approved. Still, you may also opt for (or be required to) pay for some “extras.”
Registered agent costs
Every LLC requires a registered agent — an appointee, responsible for accepting the service of process of legal documents and handling other business communication on behalf of your new business.
You’ll need to include your LLC’s registered agent’s name and physical/mailing address on your business formation documents. It’s a state requirement, but no fee is charged for this.
However, if you later need to update your registered agent details, e.g., signal about a change in their name, or office address, you’ll have to:
- Complete a Change of Agent form
- File it with a $50 state fee
The above is often necessary when an LLC decides to switch to a commercial registered agent service.
Doing so comes with a host of benefits:
- Extra privacy for LLC members, given that the registered agent’s name and address are publicly listed.
- More personal freedom since the service will be available instead of you during regular business hours.
- Access to a local physical street address, necessary for business owners located outside of Connecticut because P.O. boxes are not accepted.
The most basic registered agent service costs about $50-$75 annually for basic coverage. Many agents also double as LLC formation services and legal consultants.
If you want additional professional services for your LLC, prepare to pay north of $250 per year.
Trade name registration
A trade name, also referred to as doing business as name (DBA), is often used by sole proprietors and incorporated business structures.
A trade name allows a company to legally operate under a business name different from the one you list in company formation documents.
Trade name registration may also be required for foreign LLCs if their business name is already being used by someone else in Connecticut.
In Connecticut, trade name registrations are handled on the city/county level.
You’ll need to file a trade name certificate form with a local clerk (not the Connecticut Secretary of State).
Connecticut LLC name reservation
You can file for a business name reservation if you’d like to place a hold on a name you fancy while finishing up other paperwork.
To do that, complete a Connecticut LLC name registration form. Then file it with the Secretary of State with a $60 filing fee.
Your business name reservation will be valid for 120 days upon the filing date.
Certified document copies
Connecticut LLCs can request copies of all company formation documents in several clicks through the Secretary of State website. But certified document copies are not free.
The cost per document is generally:
- $40 (plain document)
- $55 (certified copy)
Some documents may cost more. For example, the cost of a long-form Connecticut Certificate of Existence required to register as a foreign LLC in another state is $100.
Business permits and licenses
Most LLCs don’t need a business license to operate in the state of Connecticut since a general business license is not required.
However, some industries need to obtain a license at the state, local, or county level. Head to the Connecticut State Department of Consumer Protection website to determine if your type of business activity requires a business license.
As for the license costs, these vary a lot. Here are several examples:
- Bedding manufacturer license cost $100
- Electrical contractor license cost $150
- Frozen dessert retailer license cost $50
- Real estate broker license cost $565
Sales tax license
If your LLC sells goods in the state of Connecticut, or a taxable service or operates a hotel, then it may need to register for a sales tax license with the Connecticut Department of Revenue Services. The cost to register for the permit is $100. The renewal is on a biennial basis, but no fee is charged.
As part of this application, you also get a state tax ID number. That’s required on top of an employer identification number (EIN) for tax purposes. LLCs with employees need both numbers to pay federal and state employment taxes.
EIN application is free and done online via the Internal Revenue Service (IRS) website.
Does Connecticut have an annual LLC fee?
Yes. The annual report fee is $80. Your LLC will need to file an annual report with the Secretary of State to maintain good standing. When you file your annual report, you must do so online unless you request the Secretary of State to file it by mail.
The due date for filing the annual report for the LLC is between January 1 and March 31. Failure to file on time can result in late fees.
What taxes do LLCs pay in CT?
LLCs taxation is less complex than many think.
Under default tax classification:
- Single-member LLC files federal taxes as a sole proprietorship
- Multi-member LLC files federal taxes as a partnership
In both cases, LLC members report company profits on personal income tax returns and pay applicable personal income and self-employment taxes. CT residents’ personal income tax rates vary between 3%-6.99%.
You can, however, elect to be taxed as an S-corporation or C-corporation instead.
In this case, however, extra taxes will apply, such as:
- S-corporation: state employment taxes on members’ salaries instead of self-employment taxes
- C-corporation: corporate income taxes (federal and state) and state employment taxes.
In Connecticut, if your LLC pays wages to employees, then you must withhold a 6.99% state employment tax and remit this to the Connecticut Department of Revenue each quarter.
Apart from the above, some LLCs may be subject to CT sales and use tax. The state-wide rate is 6.35% as of 2021, with no local surcharges by individual counties. But specific industries enjoy discounted rates.
Conclusion: How much does an LLC cost in CT?
You can start your Connecticut LLC for a base fee of $120. If you choose to hire a Connecticut registered agent service budget for an extra $50 to $250. Also, if you need a trade name, add another filing fee of $10. The same goes for name reservations, which cost $60, and certified document copies with a price tag of $55 per document.
Other costs to keep in mind are business license registration and admin costs associated with business bank account opening, LLC operating agreement creation, legal or accounting consultations, and other business services.