Even if it seems like a hassle, forming a limited liability company may be a wise choice for a small business owner.An limited liability company limits the owner's personal liability for the actions of the company, which could save you a lot of money and legal troubles down the road.The process for forming an limited liability company in Connecticut is the same as in most other states.The process is not beyond the reach of the average person and you could rely on an attorney to do the work for you.
Step 1: You can choose a business name.
Like a person, each limited liability company needs a legal name for identification purposes.If you want to avoid confusion, you need to choose a unique name.The Secretary of the State of Connecticut has an online database of existing business names.To register as a limited liability company, you have to use those three words.The end of your business name is where Liability Co. must appear.If you want to make sure your preferred name is not snatched up while you file your application materials, you can request a name hold for 120 days by filling out a form and paying $60.
Step 2: You should file your articles of organization.
The State of Connecticut requires this form in order for you to create an limited liability company.It is a short and straightforward application form that is available for download.The form requires you to enter the name, address, and signature of the registered agent for the limited liability company, which can be your home address.
Step 3: A registered agent can be appointed.
In most states, you have to name a person or business entity that will accept legal papers on your behalf if you are sued.The registered agent for service of process in Connecticut must be either a resident of the state or a business that is certified to do business in another state.Make sure your registered agent agrees to the appointment.The Articles of Organization must be signed by your chosen individual or representative of the business.
Step 4: You can mail your application and fee.
The Secretary of the State Office in Connecticut states that it is working on developing an e-file capacity, but at the moment you have to apply to form an limited liability company by mail.Attach the filing fee to your application.The fee and application should be sent to the Commercial Recording Division, Connecticut Secretary of the State.The box is in Hartford, Connecticut.
Step 5: You need to apply for tax numbers.
The tax man will call for your new company.It is wise to apply for tax identification numbers regardless of the nature of your company.It is required by federal law to have an Employer Identification Number from the IRS if you have more members than you alone.If you are a sole proprietor, you can still apply for an EIN.If you want to do business in the state, you need to apply for a Connecticut tax registration number.
Step 6: Determine if you need other licenses.
Depending on the nature of your limited liability company, the type of business it conducts, and its location within Connecticut, you may need to file for additional permits, licenses, or registration.Check with the Connecticut Department of Consumer Protection to determine if you need an occupational or trade license.Check with the Department of Energy and Environmental Protection for permits for certain types of business activity.The Business Response Center (BRC) for the Connecticut Economic Resource Center can help you determine if your company requires additional registration, permits or licensure.Although many small businesses are not required to do so, you may need to register your company with the Connecticut Department of Labor.If you want to trademark the name.You can either fill out a form and pay $50 or register with the U.S. Patent and Trademark Office.
Step 7: Prepare for continuing obligations.
Business entities in Connecticut are required to file an annual report with the office of the secretary of state.A bi-annual Business Entity Tax must be paid by your limited liability company.You can file your Annual Report online.Each year, it is due during the anniversary month of the establishment of your limited liability company.The Business Entity Tax is due on April 15 of every other year, and currently stands at $250.If your company will be selling goods and collecting sales tax, you must register it with the state Department of Revenue Services.
Step 8: An operating agreement is a good way to protect your company.
You should create an operating agreement once you have completed all of the requirements for your company.This document is not required in the state, but it is smart to have one.If it has multiple members with varying levels of investment and/or interest in operations, an operating agreement is important.It will be used by the courts when there are problems with your company.Without one, the default rules for LLCs dictate that all members share in profits and losses equally, regardless of investment or activity level.The operating agreements usually include sections about the members' percentage interests, rights and responsibilities, voting powers, allocation of profits and losses, management structure, and rules for holding meetings and votes.The agreement should be tailored for your company.You can find templates to help you write an operating agreement, but it is important that it complies with the legal requirements in your state.When dealing with legal matters relating to your limited liability company, you may want to hire an attorney to draft the operating agreement for you.
Step 9: A business plan is needed to guide your new company.
This is not required but it is very important.As an operations guide, a good business plan is needed.A business plan is a valuable document for any new business.Title Page and Table of Contents are included in the detailed article How to Write a Business Plan for extensive information on the process of creating one.You summarize your vision for the company in the executive summary.An overview of your company and the service it provides to its market is provided in the general company description.You describe your unique product or service in detail.You describe how you will bring your product to consumers in your marketing plan.You describe how the business will be run on a day-to-day basis in the operational plan.You describe the structure and philosophy of your organization in Management and Organization.You show your model for finances and your need from investors in a financial plan.The U.S. Small Business Administration can provide guidance on developing a business plan.