How to Start an LLC in Connecticut (Step-by-Step Guide)

For new companies, forming an LLC is often the best option as it is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Additionally, LLCs often enjoy a lower tax rate than corporations. However, forming an LLC can be a little complicated, and each U.S. state has a unique checklist for starting an LLC with minor procedural variations.

Forming an LLC in Connecticut more or less follows the same process as it does in other states, although filing fees are a bit above average.

1. Select a name for your Connecticut LLC

Follow naming requirements

There are two major guidelines to follow when naming your LLC in the state of Connecticut:

1. The name of your LLC must be distinguishable compared to the names of business entities already on file with the Connecticut Secretary of State.
2. The name of your LLC must include the words “Limited Liability Company” or either of the abbreviations “L.L.C.” or “LLC”.

Need help coming up with a business name? Check out our free business name generator.

Reserve your LLC name with the Secretary of State

After selecting a name for your LLC, you must reserve it with the Connecticut Secretary of State. First, check that the name is available for use using the Connecticut Secretary of State business name database. If the LLC name is available, go ahead and reserve the name for up to 120 days by filing an Application for Reservation of Name. The application must be mailed to the Connecticut Secretary of State’s office and the filing fee is $60.

2. Designate a registered agent

As in every U.S. state, forming an LLC in Connecticut requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must be a state resident or business with a street address in Connecticut OR if the individual or business is based out-of-state, they must have a certificate of authority that allows them to do business in Connecticut.

As a business owner, you can serve as your registered agent. As long as you’re available during regular business hours and able to accept incoming mail and documents, you can serve in this role.

However, you might consider hiring a registered agent service if you travel a lot or aren’t in the office often. For a small annual fee, usually around $100 a year, you can work with a professional company that accepts documents on your behalf and will notify you when something comes in.

3. File a Certificate of Organization

Now you can file a Certificate of Organization with the Connecticut Secretary of State to legally form your LLC in the state. You have the option of filing the certificate online or through the mail, and the filing fee is $120. Payment of the fee must be made by credit card.

Your Certificate of Organization must provide the following details:

• LLC name
• LLC principal address
• Registered agent name and address
• LLC organizer name and address
• Names and address of one or more LLC members and/or managers
• LLC organizer signatures
• The LLC’s email address

To file online you will need to log in (or sign up) for a ct.gov account.

4. Create an operating agreement

Although not a legally mandated step for forming an LLC in Connecticut, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

1. Describe the LLC’s business structure
2. Establish the individual responsibilities and obligations of LLC members
3. Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN) 

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs). The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee. You simply answer a few questions online and will be instantly given the number. You’ll likely keep the number for the life of your business.

6. Fulfill your legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

Annual Reports

LLCs based in Connecticut are required to file an annual report with the Connecticut Secretary of State. The only option is to file the report online and the filing fee is $80. Annual reports are due between January 1 to April 1 beginning with the first calendar year after the LLC was formed.

Business licenses

A Connecticut LLC may be required to obtain one or more licenses, permits, or certifications issued at the state or local level depending on the nature of its business.

• Check the CT License and Permit Center for state license and permit information.
• Contact a city clerk in the municipality where your LLC is based for consultation on fulfilling local licensing requirements.

Understand state tax requirements

As a Connecticut LLC, you aren’t subject to corporate taxes. Corporations are, but LLCs aren’t. LLCs are pass-through entities, which means business income and expenses are passed to and paid for via personal tax forms.

• Connecticut tax rates: While a Connecticut business set up as an LLC won’t file business taxes, the owner will pay personal taxes. Connecticut has a graduated individual income tax, with rates ranging from 3 to 6.9%. Connecticut also has a 6.35 percent state sales tax rate and levies no local sales taxes. You’ll also be responsible for paying federal taxes.
• Consider working with an accountant: If you’re concerned about filing taxes correctly, consider consulting a business accountant. Many small business owners seek accounting or bookkeeping assistance to ensure their taxes are filed correctly and to plan accordingly for next year. Additional bookkeeping duties, like sending invoices and reconciling your accounts, are also possible as your business grows.
• Register with the state to pay taxes: Before you pay taxes in Connecticut, you need to register with the Connecticut Department of Revenue Services, which will issue you a tax ID to use for tax purposes. Connecticut DRS Registration can be done online, by postal mail, or by hand delivery of the form.

File a BOI Report

Your business must file a Beneficial Ownership Information Report with the federal government’s Financial Crime Enforcement Network. The report, which is part of new legislation passed by Congress, is new to businesses as of 2024 and helps authorities identify financial crimes like money laundering. The report asks for business information, specifically the names and addresses of each owner and stakeholder. To file your report, visit the FinCEN website.

Learn more about BOI reporting.

Post LLC tasks

Open business bank accounts

No matter what type of business you decide to start, it should have its own bank accounts. It’s good practice to separate your business finances from your personal finances. While it may take some time to get in the habit of separating finances, it helps you establish your company’s financial history, provides an at-a-glance look at the financial health of your business, and streamlines your tax reporting.

• Consider your banking options: While you might be drawn to a local brick-and-mortar bank, there are many online options, some of which offer a combination of small business accounting software and checking/savings accounts, like Found, Relay, or Mercury.

As you open accounts, consider a business credit card too. A credit card can help you establish credit and ease some of the funding restraints that often come with starting a business. However, you must make a plan to manage the balance on the credit card.

Set up a business website

A business website helps you accomplish three goals: Providing brand awareness, driving sales, and educating customers. Your website not only explains what your company is about but what it sells and why customers should care about it.

While every LLC owner knows a website is necessary, you might not know where to start. Follow these steps to get started:

1. Search for and purchase a domain name.
2. Sign up for web hosting.
3. Pick a web builder like Domain.com or GoDaddy to create a site with no coding experience necessary.
4. Tailor your site to your customers, adding appropriate pages, content, and images.
5. If you’re selling goods, add an e-commerce section to your site.
6. Review, test, and publish your site.

Costs of an LLC

Average cost to set up an LLC in Connecticut: $200-$400

Running a business comes with costs. As a small business owner, you’ve probably considered the costs you’ll need to manage to succeed, but it’s easy to overlook an expense or two. Here’s a look at set-up fees to budget for:

• Incorporation fees: Every Connecticut LLC must register their business with the state to legally operate. To do so, you must file a Certificate of Organization, sometimes called Articles of Organization in other states. When you file the certificate, you’ll pay a filing fee of $120.
• Annual Report filing fees: Like most states, Connecticut requires LLCs to file an Annual Report. This report gives you the chance to update the information provided on your Certificate of Organization. Regardless of the need to update it, each LLC is charged $80 to file the report with the state.
• Registered agent service fees (optional): LLC owners can hire a professional registered agent as opposed to serving in the role themselves or appointing someone they know. Using a commercial service provides confidentiality and peace of mind, knowing that someone is always available to receive information. To obtain this service, expect to pay between $50 to $200 a year.

Foreign LLCs

Foreign LLCs formed outside of Connecticut that intend to do business in the state must register with the Connecticut Secretary of State.

Follow these steps to render your LLC eligible to do business in Connecticut:

1. Comply with Connecticut LLC naming guidelines and confirm that the LLC name is available for use in the state using the Connecticut Secretary of State business name database.
2. Appoint a Connecticut registered agent to handle service of process.
3. File a Foreign Registration Statement, Limited Liability Company with the Connecticut Secretary of State. Filing can be done online or by using postal mail. The filing fee is $120.