How to Form a Connecticut LLC in 10 Steps
LLCs are common business structures. The acronym stands for Limited Liability Company, and that’s just what an LLC is — a company that limits all owners’ exposure to liability.
Moreover, an LLC allows for one or more individuals to own parts of a given company. LLCs don’t need to file unique tax returns (like corporations), and earned profits will be passed through to each individual member
Forming a Limited Liability Company is a straightforward process, but there are several steps you'll want to follow.
1. Choose Your Company Name.
You need a company name that no other business has the rights to use. SunDoc can run your name search or reserve your LLC name for a reasonable fee. At a minimum, your preferred name must be available in the State of Connecticut.
2. Understand the LLC Organizer Requirement.
All LLCs have to have an LLC organizer. This role will be named on your Certificate of Organization form. Often, companies assume that the organizer has to be an LLC member or an LLC manager, but this can be anyone who helps prepare your Certificate of Organization.
For example, if you choose SunDoc to prepare your Article, SunDoc will be your organizer and file your Articles for you. If you file your articles on your own, you will be the default organizer. You can also elect to have a lawyer be your organizer.
3. Designate a Registered Agent.
You must designate a registered agent, either a person or a firm. This is required for the Certificate of Organization form. For more information on registered agents and why your company must have one, see our article on Registered Agent Service.
4. Decide Your Ownership and Management Structure.
The Certificate of Organization form asks whether your Connecticut LLC will be managed by one manager, multiple managers, or all the members. You must decide whether you want to be a member-managed or a manager-managed LLC.
5. Create an Operating Agreement.
It's possible your company might require that you have an operating agreement. This agreement will outline functional decisions of your business as well as financial decisions. It is a key document needed by many LLCs. Each operating agreement will suit the unique needs of your own LLC’s owners. It governs all of your internal operations and includes provisions, regulations, and rules.
A lot of people refer to the operating agreement as your company's engine. It does important things like forming your governance, managing working capital, and handling profit payouts. It also outlines how your company will handle fiduciary constraints, voting, finances, liability, and more.
It could be a wise idea to speak with a lawyer about the formation of your LLC’s Operating Agreement.
6. File the Certificate of Organization.
It is almost certain that the State of Connecticut will require your LLC to file a form called the Certificate of Organization. Once the state accepts your Certificate of Organization, you will have a fully-formed LLC.
You will need to have several pieces of information ready in order to file this form: The name and address of your company, the management method you've decided on, and who your registered agent and LLC organizer will be. In some cases, member names will be required too.
For some companies, time is an issue, and these companies often ask a filing company like SunDoc to file their Certificate of Organization for them. We would be glad to do this for you, and it is a service we often provide.
7. Obtain an EIN and Open a Business Bank Account.
Congratulations! You have a new LLC, registered with the state of Connecticut. Any LLC with more than one member now must file for an EIN (Employer Identification Number) with the IRS. You have to have this number whether you employ anyone or not. SunDoc can file for you or you can file with the IRS by yourself.
An EIN is also needed by many banks when you want to open an account that is specifically for businesses. If you have been paying business expenses out of a personal account up until now, it’s time to reimburse yourself by setting up a business account. Possibly, you might to decide to hire an accountant and handle all other financial matters now as well.
8. Pay Connecticut State Taxes.
It will be necessary every year for your LLC to pay required taxes and fees to the state. Generally speaking, this includes the first year that your LLC is in operation. Sales tax may also need to be collected if you plan to sell products of goods in the state of Connecticut. Go to the State of Connecticut’s tax web site to find out more about Connecticut state taxes.
9. Determine Necessary Licenses and Permits.
Nearly all states require that LLCs have at least one business license or permit. These are necessary in order to operate on the county level and the city level.
The Connecticut State business website can help you find the exact requirements you should reference. You may think you’re exempt, but trust that it’s important to double check with the website. You will be surprised at the requirements you probably didn’t know about. Fines may ensue if you do not have the appropriate licenses and permits.
10. File an Annual Report (Biennial Report or Initial List).
Generally speaking, you will need to file a biennial report, an annual report, or another similar report right after you form your Connecticut Limited Liability Company. Every year or two years thereafter, you will also need to update that report. The frequency of the updated report will depend upon the requirements of your unique state.
This yearly report is simply a way to keep the state updated on vital information about your company. If you end up making changes to your company, you will invariably need to refile with the state using this form.
Remember not file this report late! You may end up paying 10 times the normal fee if you do not file on time. Again, the required time period for filing this annual report will depend on your state. To make things easier, you may choose to have SunDoc file your yearly report on your behalf. We can do this filing and many other filings for you — always on time and always reliably.
All necessary LLC forms (including the form for this report) can be found on the Connecticut business web site.
Important Notice: It is beyond the scope of this article to discuss your potential insurance needs, or matters relating to employees. You should consult an attorney or accountant with any questions about legal or financial matters. Please note that nothing in this article can be construed as legal, tax or accounting advice.
For additional learning, please visit our LLC FAQs.
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