Frequently asked questions about starting and running an LLC, or limited liability company.
A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.
Here are the steps you need to take to form an LLC in Connecticut. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.
Under Connecticut law, an LLC name must contain the words "Limited Liability Company" or the abbreviations "LLC" " or "L.L.C." The word "Limited" may be abbreviated as "Ltd." and the word "Company" as "Co."
Your LLC's name must be distinguishable from the names of other business entities already on file with the Connecticut Secretary of State. Names may be checked for availability by searching the Connecticut Secretary of State business name database.
An available name may be reserved for 120 days by filing an Application for Reservation of Name with the Connecticut Secretary of State. The form must be filed by postal mail. The filing fee is $60.
Every Connecticut LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC's behalf if it is sued. The agent should agree to accept service of process on behalf of the limited liability company prior to designation. The registered agent may be (1) an individual who is a full-time resident of Connecticut (including a member or manager of the LLC), or (2) a Connecticut business entity, or (3) a foreign business entity which has obtained a certificate of authority to transact business in Connecticut.
A Connecticut LLC is created by filing Certificate of Organization with the Connecticut Secretary of State.
The articles must include:
The articles can be filed postal mail or online. The filing fee is $120.
An LLC operating agreement is not required in Connecticut, but is highly advisable. This is an internal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates.
For help creating an LLC operating agreement, see Form Your Own Limited Liability Company, by Anthony Mancuso (Nolo) or use Nolo's Online LLC. If an operating agreement is created, it need not be filed with the Articles of Organization.
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses. The Connecticut Economic Resource Center directs businesses to the appropriate agencies to ensure they are properly registered, licensed or permitted within the state.
In some cases, for example if you will be selling goods and collecting sales tax or if you have employees, you'll need to register with the Connecticut Department of Revenue Services (DRS). For most purposes, you can register either online or on paper (Form REG-1, Business Taxes Registration Application). Connecticut also imposes a separate biennial (every other year) $250 Business Entity Tax (BET). See the Busienss Entity Tax webpage for more information.
For more information on state LLC tax registration, see Nolo's article Connecticut LLC Annual Report and Tax Requirements.
All Connecticut LLCs must file an annual report with the Connecticut Secretary of State. The report is due between January 1 through April 1 following the calendar year the LLC was formed. The Secretary of State emails reminders to LLCs one month before the report is due. The report must be filed online on the Secretary of State's website. The filing fee is $20. For more information on annual reports, see Nolo's article Connecticut LLC Annual Report and Tax Requirements.