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How to Start an LLC in CT (7-Step Guide)

Learn how to set up an LLC in Connecticut the right way

Written by Melissa Pedigo – CPA, updated on

Connecticut is home to over 350,000 small businesses, making it one of the national hotspots for entrepreneurs. Connecticut is home to many of today’s most prominent brands, such as Aetna, Xerox, ESPN, and Subway.

Besides its charming landscapes, the Nutmeg State boasts a nearly 78% early startup survival rate, an array of tax incentives, and a vibrant ecosystem of advisers and funders.

In 2020, Connecticut’s economy grew at an annual rate of 0.9%—which is lower than the 2019 rate of 1.6% because of the impact of the global pandemic crisis. But treat this as a temporary slump.

For those eager to join the local ecosystem of business owners, we’ve put together this step-by-step guide on how to start an LLC in Connecticut.


7-Steps to Get an LLC in Connecticut

  1. Step 1: Choose a business name for your Connecticut LLC
  2. Step 2: Designate a registered agent
  3. Step 3: File the Connecticut LLC Certificate of Organization
  4. Step 4: Obtain an EIN (Employer Identification Number) from the IRS
  5. Step 5: Register with the Connecticut Department of Revenue Services
  6. Step 6: Prepare an LLC operating agreement
  7. Step 7: Open a Connecticut business bank account

Step 1: Choose a business name

Operating a limited liability company (LLC) comes with many perks.

But before you can reap the benefits of personal asset protection and diminished personal liability, you’ll need to complete your company registration. It starts with naming your new business.

Connecticut LLC naming rules

Apart from selecting a unique, memorable business name, Connecticut law requires you to comply with these naming rules:

  • Your LLC’s name must end with the term “Limited Liability Company” or abbreviations such as “LLC,” “L.L.C.,” or “Ltd.” to make it clear the business structure is an LLC.
  • The name can’t suggest any associations with a government agency (Treasury, FBI, State Department, etc.), bank, corporation, attorney, university, or insurance company.
  • Names can’t contain words like “corporation,” “incorporated,” “inc.” These are reserved for corporations.
  • Your LLC’s name should reflect the purpose of your business and should not conflict with existing companies in Connecticut.

Once you’ve come up with several options, check if your selection is available for registration.

Run business records search on the Connecticut Secretary of State’s website. The tool will tell you if a specific legal name is available for registration.

Connecticut business name search home page
Connecticut business name search home page. Source: Connecticut Secretary of State.

Name reservations

Once you confirm the availability of your LLC’s name, you can reserve it with the state before you’re ready to form your LLC.

You can file the name reservation request online, by mail, or in person. Prepare an Application for Reservation of Name form along with a check of $60. Then submit it to the CT Secretary of the State (SOS).

Trade name

If you choose to operate your business under a different name, you can register a trade name (DBA name) with your state.

Use a trade name if:

  • You’re rebranding your company
  • You want to focus on multiple lines of business

Connecticut law requires anyone who does business under a DBA to file a Trade Name Certificate — by mail or in-person — with the town clerk’s office in the city where they conduct business. Costs vary.

Step 2: Hire or become a registered agent

As a rule, you’re required to appoint a registered agent when you form your LLC.

A registered agent receives and accepts official legal communications — tax notices, subpoenas, regulatory notices, and correspondence — from the State of Connecticut.

The agent also receives any service of process (e.g., summons) your LLC may receive when it’s involved in a lawsuit with another business entity or person. These documents must be received in person. Failure to do so can have legal and financial consequences.

Connecticut requirements for a registered agent

Connecticut accepts the following people to act as a registered agent:

  • Over 18 years of age
  • Has their primary residence in Connecticut
  • Has a street address in Connecticut (not a P.O. box address)
  • Available at that office address during regular business hours

So you, an employee, or even a friend you trust can act as a registered agent. Or you can hire a professional registered agent service instead.

When to use a professional registered agent service

When to use a professional registered agent service

Many businesses prefer to appoint a professional registered agent service because the provider:

  • Offers more privacy — your physical address doesn’t become of public record
  • Handles legal paperwork expertly and discreetly
  • Complies with state requirements
  • Is available when needed

Also, foreign LLCs without a physical presence in the state do so out of necessity.

Using a registered agent service typically costs $100 to $300 per year, depending on your selected service tier.

How to appoint a registered agent in Connecticut

When you complete your LLC’s Certificate of Organization, you’ll appoint your registered agent on your application. There is no fee for this initial selection.

To change the registered agent, you’ll prepare a Change of Agent form and submit it to the Connecticut Secretary of State together with a $50 filing fee by check or debit/credit card (for online filings).

Your new Connecticut registered agent will also sign the paper form to consent to their appointment. The authorizer must acknowledge that the agent consents to their appointment for online filings.

Step 3: File the Connecticut LLC Certificate of Organization

When you’re ready to form your Connecticut LLC, you’ll fill out and file the Certificate of Organization with the Secretary of State. In other states, this document is called “Articles of Organization.”

Download and submit the Certificate of Organization form online or submit a hard copy by mail or in-person to the Secretary of State’s Office. A $120 fee will apply whether you file online or via hard copy.

Connecticut certificate of organization to form a domestic LLC
Connecticut certificate of organization to form a domestic LLC. Source: Connecticut Secretary of State.

Connecticut has a complete list of what you’ll need to file your Certificate of Organization, including:

  • LLC name and address
  • Registered agent contact details
  • Founders of the LLC
  • Managers of the LLC (even for single-member LLCs)

Step 4: Obtain an EIN (Employer Identification Number) from the IRS

Some LLCs will need to apply for Employee Identification Number (EIN) once the state paperwork is approved.

An EIN is a unique nine-digit number (like a social security number) the Internal Revenue Service (IRS) assigns companies to identify them for tax return filing and reporting. An EIN is also needed for hiring employees and paying federal taxes.

Single-member LLCs filing taxes as a sole proprietorship with no employees are not required to obtain an EIN.

You can apply for and get your EIN using a paper Form SS-4, but it’s free and much faster through the IRS website. To get started:

  • Choose the type of business you wish to start, in this case, an LLC
  • State the number of owners your LLC has, and in what state the company is located
  • Say why you’re applying for an EIN
  • Identify the principal officer (responsible party) of the business, plus their name, SSN, and contact details

Press submit and get your number issued in 10 minutes or less.

Step 5: Register with the Connecticut Department of Revenue Services

You may need to register with the Connecticut Department of Revenue Services (DRS) to pay applicable state taxes.

You can complete registration online, or you can register using a paper Form REG-1, Business Taxes Registration Application.

A one-time fee of $100 applies when registering for the sales and use tax permit, which you’ll pay directly to the DRS from a checking or savings account.

Step 6: Prepare an LLC operating agreement

You don’t need an operating agreement for your Connecticut LLC, but it’s good practice to have one.

An operating agreement is a legal document that outlines things such as:

  • Members’ names, contributions, and share of ownership
  • Who contributes money if the business needs more
  • How and when to distribute profits among owners
  • How members can join or leave the LLC
  • When and how to dissolve the company
  • Other decision-making and executive powers each LLC member has

You can use a template online or consult a business attorney in your state to help you draft an operating agreement.

Step 7: Open a business bank account in CT

Next, open a business bank account. It’s essential for easier record-keeping, projecting cash flow, preventing confusion with the IRS, and reconciling bank statements.

Generally, banks will ask for your:

  • Personal ID
  • Social Security Number
  • EIN (if you have employees)
  • Business license (if applicable)
  • Legal business name and DBA name
  • Organizing documents (Certificate of Organization)

Some major banks in Connecticut include Bank of America, Capital One, Chase, Key, and U.S. Bank.

Most of these banks require a minimum deposit of $25 for opening an account. Monthly service fees range from $0 to $30, depending on the type of account you choose. And they have extensive networks of branches and ATMs from 18 to over 400, so you don’t have to open a new account if you change locations.

But you should investigate whether local banks or credit unions can provide you with better service with smaller fees. Essex, Liberty, and New Haven Bank all have local branches, and their monthly service fees may be lower since they focus on serving the local community.

Taxes, costs, and fees in CT you should be aware of

Connecticut LLC taxes, costs, and fees

Depending on your type of business, you may incur extra costs, fees, and taxes when starting an LLC in Connecticut.

Here’s a list of what to budget for:

Annual report filing

All Connecticut LLCs must file an annual report online and pay a nonrefundable fee of $80. Late filing has penalties, which include:

  • A “Not in Good Standing” status
  • Possible dissolution of your business after one year of delinquency

In CT, LLC’s annual reports are due by March 31st. So mark your calendar!

State LLC taxes

The great news is that Connecticut repealed its business entity tax (BET) at the end of 2018. So that means most Connecticut LLCs have no minimum corporate income taxes or franchise taxes to pay.

However, you may be subject to the local sales taxes if you’re selling taxable goods or services.

The statewide rate is 6.35%, with no extras charged by individual cities or counties.

Additional taxes you may have to pay or collect include:

  • Unemployment insurance tax (if you have employees in Connecticut)
  • Employee withholding tax

These apply if you have employees on the payroll.

Important business permits and licenses in CT

While there’s no general business license in Connecticut, you may still need to get professional licenses and pay applicable fees to do business in the state.

The business licenses and permits fees will vary depending on your business, and the license you want, such as:

  • Selling regulated goods like gasoline, firearms, lottery tickets, or liquor requires additional licenses
  • Offering car repair, medical, real estate, or insurance-related services requires occupational licenses
  • Regulated industries like agriculture, daycare, debt management and collection, cosmetics, oil and gas, education, social and health services, aviation, and health supplements also require special state licensing

You can check with the Connecticut State Department of Consumer Protection to get all the necessary information about professional licenses.

Pros and cons of opening an LLC in Connecticut

Operating in the Constitution State has some solid operational perks and certain drawbacks.

Here’s a quick summary:

The good:

  • No corporate income or franchise taxes
  • The reasonably high startup survival rate
  • Relatively inexpensive formation costs
  • Statewide sales tax with no regional surcharges
  • Convenient online business portal

The bad:

  • Annual report filing required + state fee
  • Specialty permits and licenses can be expensive
  • High state and local tax rates for residents

Frequently asked questions:

Below are some answers to the most frequently asked questions (FAQs) about forming an LLC in Connecticut.

Melissa Pedigo

Article by:

Melissa Pedigo

CPA

Melissa Pedigo is a US CPA with more than 20 years of experience. She’s worked at Big 4 firms, for the government, and internationally. Now a full-time writer, she enjoys translating complex financial and tax topics into plain English. When she’s not keeping current reading IRS rules or tax legislation, you’ll find her studying foreign languages or playing tennis.

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