The advantages that the limited liability company (LLC) structure offers make it a popular choice for new entrepreneurs. Among its most known benefits are the limited liability that protects the assets of the owners against the debts or actions of the company and the flexibility in management and taxation. Once you have made up your mind about starting a Connecticut LLC, you will have to prepare for various responsibilities. Aside from managing the day-to-day operations of your company, you should also make sure that it remains compliant with state obligations. To do this, you will have to file formal paperwork and pay the corresponding LLC fees.
Business Formation
Among the expenses that you have to prepare for are the fees during the early stages. Those include payments you have to make during the registration process.
- Business Name – The state has naming requirements for business entities. Aside from using the right designator, you have to make sure that the name you choose is unique. If another entity in Connecticut is already using it, you can no longer have it. Use the Business Entity Search tool on the official website of the state to check if the name you want is already taken.
You have the option to reserve a name for 120 days by filing an Application for Reservation of Name with the Secretary of State. The filing fee is $60.
- Registered Agent – The state also requires all business entities transacting business in Connecticut to nominate a registered agent. You can appoint an individual or a third-party organization. The main job of your agent is to serve as your LLC’s point of contact with the state. They will receive all legal correspondence and other business documents on behalf of your company. To find out the qualifications, read our article on Connecticut Registered Agent.
Some entrepreneurs appoint an LLC member, friend, or relative because it can help them save money. However, hiring a commercial registered agent like DoMyLLC may be more beneficial in the long run. With a team of experts handling important documents, you can ensure compliance with the state. At the same time, their expertise can help streamline the process. If you choose DoMyLLC, you can have access to our registered agent services for as low as $99.
- Certificate Of Organization – Submitting a completed Certificate of Organization form to the Secretary of State will officially form your LLC. You can file online, in person, or by mail. The state filing fee is $120.
- Business Permits And Other Licenses – The industry your company is in and its geographical location may require you to obtain certain business licenses and permits. These may have corresponding fees. For state licenses and permits, check the Economic Resource Center of Connecticut. To find out more about county or municipality requirements, contact your local Chamber of Commerce.
Ongoing Compliance
The obligations and expenses of your company do not end with the registration process. Your LLC has to file annual reports. The state sends forms or notifications to the mailing address that you provided. You have to submit the report and pay the $20 filing fee not later than the end of the anniversary month of your company’s formation.
Tax Obligations And LLC Fees
The entity is treated as a pass-through entity by default, so there is no need to worry about federal income taxes at the corporate level. Instead, the members will report all profits and losses in their personal tax returns.
However, there will be LLC fees at the state level. Connecticut imposes a biennial Business Entity Tax, which amounts to $250. The deadline for this tax is on April 15 of every odd year. You can pay online by visiting the website of the Department of Revenue Services. If you choose to file on paper, use the Business Entity Tax Return form.
As stated earlier, LLCs have flexibility when it comes to taxation, so you can choose to be treated like a corporation in terms of taxation. If that is the case, you have to file a separate tax return for your company at the federal level.
Connecticut also imposes a corporation business tax. The flat rate for this tax is 7.5% of the net income. However, the tax cannot be less than the $250 minimum.
You may also need to acquire an Employer Identification Number (EIN) from the IRS, especially if you have employees. You will need the EIN for paying employer taxes. You can apply for an EIN online for free. You will also have to pay withholding taxes and state unemployment insurance taxes.
If your company plans on selling goods to customers in the state, you will have to collect and pay sales taxes.
Other Possible LLC Fees
If you have to make changes to your LLC, you may need to fulfill certain state requirements. These may require you to submit formal paperwork and pay the corresponding LLC fees.
- Assumed Name – If you choose to use a company name different from the legal name in your Certificate of Organization, you have to register your assumed name. The registration takes place at the local government level. You have to file in the town where your company transacts business. You can contact the office of the town clerk to find out more about the requirements and fees.
- Changing Your Registered Agent – File a completed Change of Agent form with the Secretary of State. The filing fee is $50. If you choose the 24-hour expedited service, you will have to pay another $50.
- Amendments To The Certificate Of Organization – Any amendments to your Connecticut LLC should be reported to the state using the Articles of Amendment form. It costs $120. If you want the 24-hour expedited service, you have to pay an additional $50.
When running a business in Connecticut, you have to be aware of your possible expenses. This way, you can prevent any legal issues or fines in the future.
However, ensuring compliance while handling various responsibilities can be a bit overwhelming for a business owner. If you need help in filing paperwork with the state or ensuring compliance with state obligations, contact DoMyLLC.
Business Filing Section