How Much Does an LLC Cost in Connecticut (Fees Revealed)
When setting up an LLC in Connecticut, you must file legal documents to the state and pay filing fees.
As a Mergers and Acquisitions specialist, I'll provide a detailed breakdown of the potential outlay of starting an LLC in this state and other expenses that you might need to cover.
I consulted with business experts in the state who spent weeks browsing through the official documents to provide you with the most accurate information about the cost you can expect when starting a Connecticut LLC.
However, if you don’t want to risk making costly mistakes, your safest bet is to get expert assistance from the best LLC formation services in Connecticut.
Quick Summary
- An LLC in Connecticut costs \$120 to cover the Certificate of Organization and \$100 to obtain a sales and use tax permit.
- Upon approval of the business, additional costs you may incur include a registered agent service, annual reports, taxes, and other pertinent documents.
- If your LLC is taxed as a corporation in Connecticut, you must pay the state's 7.5% corporate income tax on your business's turnover, according to the Connecticut Department of Revenue Services.
- Several of my colleagues with LLCs in the Connecticut have slowly shifted their businesses towards electronic and plastics, since it is one of the leading industries of the state.
Cost to Start an LLC in Connecticut
Before you can legally conduct business in the state, you'll have to cover the associated fees necessary to form an LLC.
1. LLC Formation Filing Fee (\$120 - Mandatory)
The Connecticut LLC filing fee is \$120, paid to the Connecticut Secretary of State. This fee covers the registration of your Certificate of Organization.
The standard processing time for mail applications is 3 to 4 weeks. For clients who want to start their businesses as soon as possible, I avail of the \$50 24-hour expedited service.
2. Sales and Use Tax Permit (\$100 - Mandatory)
The state of Connecticut requires businesses to get a Sales and Use Tax Permit (sometimes known as a seller's permit) if they intend to participate in any of the following activities:
- Taxable service sales
- Rental or lease business
- Hospitality management (lodging and motels)
This license costs a standard \$100 fee and is obtained through the Connecticut Department of Revenue Services. According to state laws, you cannot lawfully do business in Connecticut without it.
3. Registered Agent Service Fee (\$80-\$300 Annually - Optional)
The state requires all LLCs to designate a registered agent to receive service of process.
You have a few options for your Connecticut registered agent: you or another LLC member can act as the registered agent at no additional cost.
Also, you can appoint a reputable firm to act as a registered agent for your company. Depending on the agent service, the cost range from \$80 to \$300 per year.
I encourage new business owners to employ a registered agent service business for at least a year before acting as their own agents.
4. Name Reservation (\$60 -Optional)
Name reservation in Connecticut costs \$60. You must submit an Application for a Reservation of Name, or you may use a Company Name Reservation Service to have it done for you.
You should always run a Connecticut LLC name search to guarantee the name you choose is available, regardless of whether you secure your business name or not.
Expenses Following the Approval of Your LLC
Here's a breakdown of other filing costs of creating an LLC in Connecticut.
1. Annual Reports (\$80 - Mandatory)
The annual cost of the LLC Annual Report in Connecticut is \$80. Although the state does not impose late filing penalties, I file the document on time to remain compliant with state business regulations.
2. Taxes (Depending on Income Bracket - Mandatory)
If you set your Connecticut LLC to be taxed like a sole proprietorship, then you’re subject to pass-through taxation.
This means you will be required to pay taxes on your company revenue at the individual tax rates, typically between 3% and 6.9%, based on your income bracket.
Additionally, if your LLC is taxed as a corporation, you are obligated to pay Connecticut's 7.5% corporate income tax on your business's turnover, according to the Connecticut Department of Revenue Services.
3. Operating Agreement (\$100 - \$200 - Optional, but Recommended)
An operating agreement outlines an LLC's management structure, members' voting rights, and profit distribution to name a few.
There is no associated cost of drafting an operating agreement yourself, however, I advise new business owners and entrepreneurs to employ an attorney to ensure the document's validity or use an online LLC formation service that costs \$100 to \$200.
4. EIN (\$0 - Optional, but Recommended)
You can apply for an EIN free of charge on the Internal Revenue Service's website. An EIN is necessary for opening business bank accounts, obtaining financial assistance, and hiring employees.
5. Certificate of Good Standing (\$50 - Optional, but Recommended)
A Connecticut LLC Certificate of Good Standing demonstrates that your company is conducting itself in strict accordance with state regulations. This certificate costs \$50.
When creating an LLC bank account, financial institutions frequently demand this document in addition to the employer identification number.
In my profession, I make it a point to transact with LLCs that are compliant with the state and have a certificate of good standing.
6. Certified Documents (\$55 - Optional)
Connecticut LLCs can quickly get copies of every document related to establishing their business on the Secretary of State's website.
Typically, it costs \$40 per document for a simple, plain paper and \$55 for a state-certified copy.
Also, note that some legal papers' pricing may vary in Connecticut. For instance, if you want to register a foreign LLC, you'll need a certified copy of the long-form Connecticut Certificate of Existence, which costs \$100.
7. DBA Name (\$10 - Optional)
You can submit a \$10 Assumed Name Application if you decide to operate a business under a name different from your registered LLC name [1]. According to the Connecticut Department of Consumer Protection, approximately 30% of businesses choose to operate under an assumed name, also known as a "doing business as" (DBA) name.
"A DBA, also known as a trade name or assumed name, refers to any name under which a business operates that differs from its legal name; if you wish to use a name other than what's stated on your LLC's Certificate of Organization, you must register a DBA by contacting your local town clerk in CT."
- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter
FAQs
What is the Penalty for Paying Connecticut Taxes Late?
The penalty for paying Connecticut taxes late is 10% of the amount due on the first offense but not in excess of \$2,500.
What Payment Methods Can I Use To Pay Connecticut's State Fees For Filing My LLC?
The payment methods you can use to pay Connecticut's state fees for filing your LLC include credit or debit card, ACH, or checks payable to the Secretary of State.
References:
- https://business.ct.gov/manage/records/trade-name-certificate?language=en_US
