How to Start an LLC in Connecticut

Business hand put wooden block stack with LLC - Limited Liability Company text on white background. Visual concept for legal blog discussing forming an LLC in Connecticut.

Are you interested in starting a business? Have you chosen Connecticut as your home base? If you are ready to take the next step in business ownership, you will need a guide to show you how to start an LLC in Connecticut, and to point out and protect against future risks. By working with an LLC attorney near you to negotiate, prepare, and file your LLC paperwork, you can rest comfortably, knowing that your company is off to a great start.

What is a Connecticut Limited Liability Company?

A Limited Liability Company, or LLC, is a business structure designed to protect the company’s founders, owners, and other members, from personal liability in lawsuits and collections related to the business. While creditors and customers will still be able to sue the business entity, but in some cases they will not be able to collect any settlement or judgments from the members’ personal assets or bank accounts. If it is set up and operated properly, an LLC can protect its owners from contractual liability (for example, lawsuits on business loans) although not from personal liability (for example, a “slip and fall” on business premises). Still, that can be significant.

A “single-member LLC” is a company of one. While a business like this can have employees, there is only one owner involved. It functions like a “sole proprietorship” and is a “pass-through entity” for tax purposes, but it still provides the business owner with the same legal protections, no matter how small the company.

Larger LLCs can have many members all of whom have an interest in the company. These LLCs function more like partnerships or corporations, depending on their level of formality. They require separate tax treatment and may have more detailed reporting requirements.

Do You Need a Lawyer to Create an LLC?

There are a handful of web companies that invite new business owners to DIY their business formation. When reviewing those websites, you may believe that you don’t need an LLC lawyer. While it can be relatively easy to fill in names and addresses on a form, that is only a small part of what you need to set your business up for success. As is often the case, your company needs an LLC lawyer not so much to fill out the forms as to know which forms are necessary, and where and how they are filed.

It is also vitally important that you work with an LLC attorney in creating the contracts that will control how you do business in the future. In the business formation stage, it can be easy to assume you and your partners will work things out together as you go along. However, a lack of clarity on each member’s rights, roles, responsibilities, and compensation, could result in costly shareholder disputes in the future. Working with an LLC attorney to thoughtfully prepare your business formation documents can “future-proof” your operating agreements, and ensure that all your members are on the same page about how business will be done.

How to Start an LLC in Connecticut

Starting an LLC in Connecticut is mostly a process of completing and filing the necessary paperwork with the state. Your LLC attorney can ensure that the right documents are completed and filed with the right state offices, and can “future-proof” your company’s formation documents to avoid future conflict as the company grows and disputes arise.

Choosing a Name

Your LLC must have a unique name, different from any other LLC in the state, and it must include the words Limited Liability Company or the abbreviation LLC as part of it. Choosing a unique and marketable name is sometimes complicated, especially if you are entering a crowded industry. It can be difficult to find a name that has not already been claimed that will be easy to market to future customers. Your LLC lawyer can help you come up with options, determine if the names have been claimed, and lay claim to the name you choose.

The Operating Agreement

You will need an operating agreement that lays out the rights and responsibilities of each member, and defines how their shares will be calculated when the business starts earning profits. If your company opens for business without an operating agreement, the state could treat it like a sole proprietorship, exposing all your members to personal liability and risk. Banks may require an operating agreement to open a business account, even for a single member LLC. The terms of the operating agreement may set forth the capital contributions required of the members and authorize their draws. And if the business ends the terms of the operating agreement may control the distribution of its assets and set forth preconditions for the company’s dissolution or bankruptcy.

Articles of Organization

Connecticut law requires every LLC to keep an updated Articles of Organization on file with the Secretary of State, and pay a filing fee. Your Articles of Organization will list:

  • The LLC’s name and business address
  • The identity, address, and signature of the company’s registered agent (for service of process)
  • The names and addresses of your members (even if only one)
  • A statement of whether the LLC will be operated by its members or a manager

Articles of Organization need to be refreshed every year to ensure your company remains in compliance and registered with the State.

Employer Identification Number (EIN)

A company’s Employer Identification Number (EIN) is a unique number assigned by the federal government for use on employee forms and tax returns. There is a form to request an EIN. Once issued, it operates like a Social Security Number for your business.

Licenses and Permits

Depending on the nature of your business, and its location, there may be other licenses or permits that you will need to obtain before opening for business. Your LLC lawyer can help you review your business plan and identify the necessary licenses and permits, such as zoning permits for your business location, business licenses, liquor licenses, and safety inspection permits.

Get Help Starting a Business from An LLC Lawyer Near You

At Lawrence & Jurkiewicz, we focus our practice on helping people. We know how to help entrepreneurs and business owners start an LLC in Connecticut, and protect against future disputes and legal challenges. We will meet with you to review your business plans and financial circumstances and help you choose the right business structure for your new venture, and will make sure your LLC paperwork is completed and filed properly. We want to help you make the right decision for you and your business. Please call (860) 264-1551 or contact us for a consultation.

Categories: Business Law