When starting up an LLC there is a lot to consider. Among the concerns is naming the business, along with paying taxes and keeping everything properly insured. For people starting an LLC in Connecticut, there are specific state requirements that have to be followd. This protects the business and helps ensure that everything is legally processed the right way. Additionally, it also protects the public from companies that may not do business fairly. By carefully following the state’s requirements, an LLC can be created with little to no difficulty.

Getting Started

 

Naming the LLC

Connecticut has a tool to search online for LLC names. This allows anyone interested to see if a name has already been taken, or if they can use it for their LLC. There is more to the issue, however. The name must have Limited Liability Company or the abbreviation in it, and must also not use any prohibited words that are used by federal and state agencies. There are also restricted words, but these can be used with the filing of additional paperwork or if a licensed individual is a part of the LLC. When naming an LLC, it is important to also determine if the domain name is available, so the company can build its web presence.

Selecting a Registered/Statutory Agent

A registered agent is someone (either an individual person or a business entity) that can accept official correspondence for an LLC. In Connecticut that can be someone within the LLC itself, including the owner. It can also be a third party that is not otherwise connected with the LLC. NO matter who is chosen, though, there are requirements to meet. An individual must be a resident of the state, and any corporation used as a registered agent must be authorized to work in the state. People and entities that do not meet these requirements are excluded from serving in this capacity.

Filing Articles of Organization

The Connecticut Articles of Organization for a Domestic LLC can be filed online, which makes it convenient for companies wanting to form an LLC in that state. The fee to file is $120. By filing the Articles, the business is essentially declaring its intent to exist a an LLC, with whatever laws need to be followed to make that a reality. Every state requires some form of documentation regarding organization of an LLC, and the Articles of Organization are the most common choice.

Creating an Operating Agreement

Like most states, Connecticut is one that does not require an operating agreement for an LLC forming within its borders. Many LLCs create operating agreements anyway, simply for their value as company documents that provide valuable information on the company. Any LLC can do that, but there is no requirement from the state to ever produce such a document. That makes the creation of a company in Connecticut easier than in some other states.

Running Your Business

Getting Your EIN

What’s an EIN?

An EIN is an employee identification number, issued by the Internal Revenue service. Sometimes it is also called a Federal Tax Identification Number. It’s a unique number issued to each business.

You’ll need an EIN to

  1. Open a business bank account.
  2. File Federal and State Taxes
  3. Hire employees.

Before you get your EIN:

  1. Make sure your new business has been properly formed before applying.
  2. Be wary of paid sites. EINs are free direct from the IRS.

How do I get an EIN?

  1. Apply online: The easiest way is to apply online for an EIN. Note, the IRS website has office hours, and is only available Monday through Friday, 7am to 10pm. Yes, we also agree this is one of the most ridiculous things we’ve ever seen.
  2. Call: You can call 1-800-829-4933, between 7am to 7pm of your time zone, Monday to Friday.
  3. Snail Mail – You can download the form and mail it in.

Keep Business and Personal Accounts Separate

  1. Get a business bank account for your business. This will help you protect your personal assets from potential creditors and lawsuits, and will also make life A LOT easier come tax time.
  2. Get a business credit or debit card. This will help you keep your expenses separate and easier to track.

Accounting

No matter what business you run, accounting software and processes is a must for any small business. If you have an accountant, ask them which software they work with and recommend.

A good accounting system is necessary to:

  1. Track income and expenses, so you can easily see if you’re making money
  2. Makes filing income taxes so much easier.

Always try and find something that will:

  1. Sync with all of your bank and credit card accounts automatically – not just downloads, but auto sync.
  2. Automatch vendors, customers and other accounts.
  3. Let you accept credit cards and ach drafts with ease.

Setting Up for Taxes in Connecticut

There are a number of things an LLC in Connecticut needs to set up for, including taxes and any needed permits.

Unemployment

The unemployment insurance tax is one of the LLC requirements for doing business in Connecticut.

Income

Connecticut also requires an employee withholding tax, to ensure income taxes are being correctly paid.

Sales Tax

Sales tax generally only applies to an LLC that is selling goods or services that are considered taxable, so that may not be necessary for every LLC. The permits that are needed are also variable, depending on the type of business the LLC is running and how customers may be affected by what the business does. Additionally, an LLC will need an EIN so it can open a bank account, pay taxes, and hire employees legally.

Getting Insurance for your LLC

Connecticut requires Workers’ Compensation insurance for every LLC. This is used to protect the business, and also to protect the employees if someone is injured on the job or as a result of it. But Connecticut doesn’t require other types of insurance for its LLCs, so companies may be at risk. In this case, only following the regulations may not be enough. Instead, it may be a better choice to focus on what actual insurance needs the LLC has, in addition to what the state requires.

Keeping Your LLC Compliant

There are hiring requirements set out by the state, along with the requirement for an annual report which can be filed online. The annual report is due every year, by the end of the month in which the LLC was created. The fee to file this report is $20.  LLCs can also get a Certificate of Good Standing.

How to File a Foreign LLC in Connecticut

A foreign LLC wanting to operate in Connecticut can be registered online for a fee of $120.