Starting a business is an exciting journey, and one of the most popular ways to do so in Connecticut is by forming a Limited Liability Company (LLC). An LLC offers many benefits, including liability protection, tax flexibility, and ease of management. Whether you’re a solo entrepreneur or planning to partner with others, forming an LLC in Connecticut is a smart choice for entrepreneurs looking to create a formal business structure.
But how exactly do you start an LLC in Connecticut? The process can seem daunting, especially if you’re unfamiliar with the state’s legal requirements. Don’t worry; we’ve got you covered! In this step-by-step guide, we’ll walk you through everything you need to know to form your LLC in 2025. From picking the right name to filing the necessary paperwork, we’ll break it down into manageable steps to ensure that your LLC is set up correctly and efficiently.
One of the main advantages of an LLC is the liability protection it provides. As a separate legal entity, an LLC protects your personal assets from any debts or liabilities incurred by the business. This means that if your business faces a lawsuit or goes into debt, your personal belongings (such as your home or car) are generally protected. This is particularly important for new businesses that want to minimize risks and safeguard their personal wealth.
Another key benefit is the tax flexibility that an LLC offers. By default, an LLC is considered a pass-through entity for tax purposes. This means that the LLC itself doesn’t pay income taxes. Instead, profits and losses “pass through” to the owners (members), who report them on their personal tax returns. This avoids the double taxation that corporations often face. However, an LLC can also choose to be taxed as an S-corp or C-corp, which may offer additional tax advantages depending on your situation.
The good news is that the process of forming an LLC in Connecticut is straightforward and can be done entirely online. Connecticut has a relatively simple application process and offers a user-friendly online portal to submit your forms. Whether you’re in Hartford, New Haven, or anywhere else in the state, this guide will provide the steps you need to legally form your LLC and start operating your business.
In the following sections, we’ll break down each step, ensuring that by the end of this guide, you’ll have the knowledge and confidence to start your LLC in Connecticut successfully. Let’s get started!
Steps to Forming an LLC in Connecticut
1. Search Your LLC Name
Before you begin the process of forming your LLC in Connecticut, you need to decide on a business name. Your LLC’s name must follow certain rules to comply with Connecticut law.
Name Requirements:
- Your LLC name must be unique and not conflict with the names of existing businesses registered in the state.
- Your LLC name must include one of the following terms: Limited Liability Company, L.L.C., or LLC. This distinguishes your LLC from other types of business entities.
To ensure the name you want is available, you can check for name availability using the Connecticut Secretary of State’s online business records search tool. If the name you want is taken, consider modifying it slightly or using a name reservation to hold it.
Name Reservation
If you want to hold a name before filing your LLC formation documents, you can file a Name Reservation application. This holds the name for up to 120 days, giving you time to complete the LLC formation process. The reservation fee is $60.
2. Choose a Connecticut Registered Agent
In Connecticut, as in all states, your LLC must have a Registered Agent. This is a person or business entity that agrees to accept legal documents, such as service of process, on behalf of your LLC. A Registered Agent ensures that your business is compliant with state laws and receives important legal notifications.
Who Can Be a Registered Agent?
A Registered Agent in Connecticut can be a:
- Resident individual who is at least 18 years old and lives in the state.
- Business entity that offers Registered Agent services and is authorized to do business in Connecticut.
If you live in Connecticut, you can act as your own Registered Agent. However, many business owners choose to hire a professional Registered Agent service to maintain privacy and ensure they never miss important legal documents. You should make sure the Registered Agent is available during regular business hours to receive documents.
Why You Might Want a Professional Registered Agent
While you can serve as your own Registered Agent, many people choose to hire a Registered Agent service for several reasons:
- Privacy: Your Registered Agent’s address will be on public record, not your home address.
- Compliance: A Registered Agent helps ensure that important documents, such as lawsuits or government notices, are received and handled appropriately.
- Convenience: A Registered Agent will forward these documents to you, ensuring you don’t miss anything.
If you’re considering a professional Registered Agent service, services like Northwest Registered Agent come highly recommended. They provide privacy protection and personalized customer service to help you stay compliant.
3. File the LLC Certificate of Organization
Once you have a business name and a Registered Agent in place, the next step is to file your Certificate of Organization (also known as Articles of Organization in some states). This is the official document that creates your LLC in the eyes of the state.
Information Needed:
- LLC Name: This should match the name you searched for in step 1.
- Registered Agent: The name and address of your Registered Agent.
- Address of the LLC: This is the physical address where your business is located. It cannot be a P.O. box.
- Member/Manager Information: Connecticut requires that the name and address of all LLC members or managers be included in the filing.
You can file your Certificate of Organization online through the Connecticut Secretary of State’s website or mail it in. The filing fee is $120. Filing online is typically faster, with a processing time of around 2–3 business days. If you file by mail, it may take 7–10 business days.
Filing Online vs. By Mail:
- Online: Faster, and you can track the status of your filing.
- Mail: Takes longer but can be a better option if you prefer traditional paperwork.
4. Create an LLC Operating Agreement
Although not required by the state, it is highly recommended that your LLC have an Operating Agreement. This document lays out the rules and regulations that govern the internal workings of your LLC, including:
- Ownership: How much of the LLC each member owns.
- Management: Whether the LLC is member-managed or manager-managed.
- Voting Rights: How decisions will be made within the LLC.
- Profit Distribution: How profits will be divided among members.
- Dissolution: What happens if the LLC needs to be dissolved.
Having an Operating Agreement in place can help prevent disputes between members and clarify how the business should be managed. It’s particularly important if you have multiple members, but even single-member LLCs benefit from having one to outline their plans.
5. Get an EIN (Employer Identification Number)
An Employer Identification Number (EIN) is required for most LLCs. The EIN is issued by the Internal Revenue Service (IRS) and is essentially your LLC’s Social Security number for tax purposes.
You’ll need an EIN to:
- Open a business bank account.
- Hire employees.
- File taxes.
You can apply for an EIN online for free directly from the IRS website. The process is quick, and you will typically receive your EIN immediately after completing the application.
6. Comply with State and Local Licenses and Permits
After registering your LLC and obtaining your EIN, you may need to obtain local or state business licenses and permits to operate legally in Connecticut.
The specific licenses you need will depend on the type of business you’re operating and your location. For example, businesses in certain industries, such as health care, food service, or construction, may require special licenses or certifications. Additionally, some local municipalities may require business licenses.
To find out exactly what licenses and permits you need, contact the Connecticut Department of Consumer Protection or your local government.
7. File Your LLC Annual Report
In Connecticut, LLCs are required to file an Annual Report every year. The filing fee is $80.
The report is due between January 1 and March 31 each year. It’s important to file the Annual Report on time to avoid late fees or the possibility of your LLC being administratively dissolved.
To file your Annual Report, you’ll need to log into your account on the Connecticut Secretary of State’s business portal and submit the necessary information. You’ll also pay the $80 fee at this time.
8. Stay Compliant with Connecticut’s Tax Requirements
Connecticut has a variety of tax requirements that may apply to your LLC, including:
- State Income Tax: Connecticut LLCs are subject to state income tax. However, LLCs are typically considered pass-through entities, meaning that profits and losses are passed on to the individual members and reported on their personal tax returns.
- Sales Tax: If your business sells tangible goods or certain services, you may need to collect sales tax. You’ll need to register with the Connecticut Department of Revenue Services.
- Employment Taxes: If your LLC has employees, you must also comply with federal and state employment tax requirements.
Consult a tax professional to ensure you’re meeting all tax requirements.
Conclusion
Starting an LLC in Connecticut in 2025 is a straightforward process, but it requires attention to detail and compliance with state requirements. By following these steps, you can ensure that your LLC is properly set up, legally compliant, and ready to operate in the state. Whether you’re launching a small business or planning for future expansion, forming an LLC will provide you with valuable protections and flexibility.
Good luck with your LLC journey in Connecticut!
FAQ’s
How Much Does a Connecticut Annual Report Cost?
The annual report for an LLC in Connecticut costs $80. This fee is due each year and can be filed online through the state’s business portal. If you don’t file your report on time, you may face penalties or even have your LLC dissolved.
When is the Annual Report Due?
The Annual Report is due between January 1 and March 31 of each year. This is the period during which you need to submit your Annual Report and pay the $80 fee.
When is My First Annual Report Due?
Your first Annual Report is due in the year after your LLC is formed. For example, if your LLC is formed in 2025, your first report will be due between January 1 and March 31, 2026.
How Do I File My LLC Annual Report?
Filing your Annual Report is simple. You can log into your Connecticut Secretary of State business portal account, update your LLC’s information if necessary, and pay the filing fee.
How Will My LLC Be Taxed?
By default, Connecticut LLCs are pass-through entities for federal tax purposes. This means that the LLC itself does not pay income tax. Instead, profits and losses are passed through to the individual members, who report them on their personal tax returns.
If you prefer, your LLC can elect to be taxed as an S Corporation or C Corporation, which may provide tax advantages in certain situations. Speak with a tax professional to decide the best tax structure for your business.