How to Start a Business and Form Your LLC in Connecticut

Connecticut Business Facts and Environment

CT Business Facts

The state of Connecticut has long maintained its reputation for welcoming ingenuity and innovation. Since her beginning in Colonial times, Connecticut has held to its roots in manufacturing and leading the world in industrial development. The Constitution State gained a reputation for being the nation’s arsenal as early as the American Revolution when Eli Whitney and Simeon North began crafting firearms with interchangeable parts. This move led to the beginning of modern mass production.

Connecticut is also known for vulcanized rubber, friction matches, sewing machines, steamboats, safety fuses, lollipops, corkscrews, mechanical calculators, cylindrical locks, and the submarine.

While agriculture has dropped off from its one-time leading industry, it’s still an important and productive one. Tobacco, nursery vegetation, dairy and produce are still top performers in Connecticut.

Major Companies in Connecticut

The Constitution State is home to a variety of major corporations. At the top of the list are United Technologies, XPO Logistics, Otis Elevator Company, Stanley Black & Decker, Aetna, Cigna, Carrier and Xerox.

Startup Environment

While Connecticut does offer its entrepreneurs a dynamic market and a qualified workforce, Connecticut small business owners face a high tax burden, elevated labor costs and expensive real estate.

Steps on How to Start a Business in Connecticut

Before starting a business in Connecticut, you will need to follow these important steps.

Step 1: Decide on a Business Structure

There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.

• A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
• A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
• An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.

Step 2: Pick a Business Name

Choosing a business name is easier said than done – many legal and business problems can arise from choosing the wrong name (you can always change it later but the less times you have to do that, the better). In Step 3 we’ll show you how to search for the name in Connecticut, but we highly recommend you do the following before searching Connecticut state databases:

• Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
• Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
• Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if your name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use Google at a fairly advanced level you can reasonably clear a name yourself.

TIP: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.

• Make sure your company name choice is available by searching the Connecticut Business Entity Database. NOTE: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).

NOTE: Every state has naming guidelines. Connecticut LLC entity names need to contain the words “Limited Liability Company” or the abbreviations “LLC” or “L.L.C.” The word “Limited” can be abbreviated to “Ltd.” and “Company” as “Co.” Certain words are restricted or prohibited.

Step 3: Register the Business

Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and selected your business name, here are the requirements to register your business in Connecticut.

How to form an LLC in Connecticut

• File the “Articles of Organization” with the Connecticut Secretary of State. An account must be created to do an online filing.
• Appoint a professional Registered Agent. Many people list their home or business address on the Articles of Organization. This can cause issues because it becomes public record (you’ll get lots of junk mail). A professional Registered Agent will provide their address and forward any important documents to you, this is also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).
• Once the articles are filed and approved you will then need to properly organize the LLC (this also applies to “1-person LLCs”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more.

How to Incorporate in Connecticut

• File the “Articles of Incorporation” with the Connecticut Secretary of State. You will need to create an account to file online.
• Hire a professional Registered Agent.
• Hold an “Organizational Meeting” to determine the percentage of ownership for each shareholder as well as resolve to do tasks like open a company bank account, pay back pre-incorporation expenses, elect S-Corporation status and more.
• Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.

Considerations when incorporating or forming an LLC in Connecticut

The Connecticut Secretary of State takes 4-5 business days to process your filing. Rush filing will take 1-2 days.

TIP: Check our order form to see how long Connecticut is currently taking to process regular and expedited orders.

How to File a DBA in Connecticut

Connecticut trade names need to be registered with the town in which the business is conducted. You will need to research your proposed trade name with your Town Clerk and submit the appropriate form or certificate. You can locate your Town Clerk by searching for “Town Clerk of YOURTOWN Connecticut.”

Ready to Start Now? Let Us Do The Work

Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.

• Learn more about our business formation service
• Read our verified reviews and 100% Satisfaction Guarantee
• Contact our friendly support team if you have any questions

Step 4: Obtain Your Federal Employer Identification Number

Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.

To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.

TIP: We will obtain your EIN for you if you we form your company.

Step 5: Open Company Bank and Credit Accounts

To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork, b) your EIN and c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).

Some Major Banks in Connecticut include Liberty Bank, Webster Bank, United Bank, Farmington Bank and Savings Institute Bank and Trust Company

TIP: Our business formation service includes a free banking resolution for your use.

Step 6: Set-up An Accounting System

Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.

Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.

Step 7: Obtain Licenses and Permits

Now that you’ve registered your business name you may need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process). Connecticut’s state website has helpful information about obtaining a business license.

TIP: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.

Step 8: Hire Employees (if applicable)

If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.

Step 9: Obtain Business Insurance

There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection. Click here to view our preferred provider of business insurance online.

Step 10: Systemize and Organize

Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.

Step 11: Branding and Marketing

Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.

Step 12: Annual and Ongoing Requirements

DBA: Your Connecticut Trade Name should be valid for 5 years (unless you change company name or other information) at which point you’ll need to renew it with your Town Clerk.

LLC: Connecticut LLCs are required to file an annual report every year between January 1 and March 31. The filing fee is $80. You can file your annual report online.

Corporation: Every Connecticut Corporation must file an annual report by the end of the anniversary month that your corporation was filed. The filing fee is $150. You can file your annual report online.

Important Connecticut Contacts

Connecticut Secretary of State

Business Services (for Corporation and LLC filings)
30 Trinity Street
Hartford CT, 06106
Phone: 860-509-6200

Connecticut Taxation Departments

• Connecticut Department of Revenue Services

Connecticut Labor and Employment Departments

• Connecticut Department of Labor

Connecticut Startup Resources

Small Business Administration (SBA)

• Connecticut District Office

SCORE Connecticut

Connecticut Legal Statutes

• Connecticut Business Corporation Act – general corporate form for the conduct of lawful business.
• Connecticut Uniform Limited Liability Company Act – the specific act that applies to Connecticut LLCs.
• Connecticut Professional Service Corporations – this includes any type of service to the public that requires the members of the profession to obtain a license or other legal authorization.

Connecticut Chambers of Commerce

Connecticut Business Portal

• The Connecticut Business portal has lots of useful information including high-tech startup tools and financing to help you get started.

Angel.co Connecticut Startups

• A list of Connecticut Startups and Connecticut angel investors registered with Angel.co. Good research resource.

Connecticut Business News

• Hartfordbusiness.com
• Hartford Courant – Business
• Ctpost

Connecticut Department of Economic and Community Development

The Connecticut Small Business Development Center (CTSBDC) offers expert assistance at no cost to entrepreneurs and small business owners.

Connecticut Green Business Program

• The Connecticut Green Building Council (CTGBC)