How to Incorporate in Connecticut (August 2024 Update)

Incorporating a business is an important step in the startup process that provides your company with significant benefits. Becoming a corporation creates a separate legal entity from its owners, providing liability protection for the owners' personal assets and often tax advantages as well. While incorporating requires commitment and maintenance, it can pay off greatly as your Connecticut business grows. This guide will walk you through the key steps for incorporating a for-profit business in the state of Connecticut.

Choosing a Business Name

One of the first steps for incorporating in Connecticut is deciding the official corporate name of your business. While you will likely already have a name you want to operate under, you'll need to check for any restrictions or conflicts at both the state and federal levels. Certain rules apply to business names in Connecticut:

• The name must contain a designation such as "Corporation", "Incorporated", "Company", "Limited", or an abbreviation of these - e.g. "Corp.", "Inc.", "Co."
• The name needs to be unique and distinguishable from existing business names in Connecticut's Secretary of State records.

You can search for name availability and reserve your desired name for 120 days by filing an “Application for Reservation of Name” with the state. While optional, reserving a name prevents anyone else from taking it before you incorporate. We recommend doing this as soon as possible once you settle on your business name.

Keep in mind that this is the official corporate name, which is separate from a "Doing Business As" (DBA) name. A DBA is an alternate name that your corporation operates under for branding or other business reasons. Using a DBA usually requires registering a trade name at the local level first. For example, the official name could be "Acme Holdings Incorporated" while it does business as "Acme Widgets".

Filing Certificate of Incorporation

To legally form your business as a Connecticut corporation, you need to file a Certificate of Incorporation with the Secretary of State's Commercial Recording Division. This can be completed:

• Online through the state's CONCORD filing system (recommended)
• By mail
• In person at the Hartford office when available

The Certificate requires quite a bit of key information, including:

• The corporation's name and business email
• The number and types of stock shares
• Details on the rights and preferences for stock classes
• NAICS industry code that matches your business activities
• Name and address of the registered agent
• Name and address of each incorporator signing the form

The standard filing fee in Connecticut is $250. Acceptable payment methods include checks sent by mail or credit card payments processed immediately for online filings.

If needed, you can also expedite the review process to 24 hours for an additional $50 rush fee. Otherwise, regular turnaround runs about 2-3 business days in Connecticut.

After incorporating, an initial report and franchise tax payment will also be due shortly after.

Appointing a Registered Agent

A major Certificate of Incorporation requirement is appointing a registered agent for your Connecticut corporation. This agent is an individual or business entity that is officially authorized to receive service of process and other important legal or tax documents on behalf of your company.

The registered agent must have a physical street address in Connecticut and be available at that address during normal business hours. Using a reputable registered agent service can help ensure anything delivered to your business gets handled appropriately in a timely manner.

It's possible to act as your own registered agent, but this means your personal home or office address will be on public record. Most business owners prefer to keep their information private by designating a registered agent service instead.

Preparing Bylaws and Company Records

While you aren't required to adopt corporate bylaws in Connecticut, creating internal bylaws is highly recommended for new corporations. Company bylaws establish operating rules and procedures for director elections, shareholder meetings, amending bylaws, officer duties, and more.

Having clear bylaws shows outside parties like banks that you have official policies in place to legitimately operate your corporation. Even if you are the sole shareholder, bylaws add structure and legal protections now and as your business grows.

In addition to bylaws, you will need to maintain standard corporate records - either physically or digitally - such as:

• Director & shareholder meeting minutes
• Stock ledger listing investors
• Annual reports and financial statements
• Copies of tax returns
• Signed resolutions & contracts

Proper documentation preserves important company history and tracks decisions, protecting both the business and individual shareholders from future liability issues.

Holding an Organizational Meeting

Shortly after incorporating, your new corporation should hold an initial organizational meeting. This is when bylaws get formally adopted, initial directors appoint officers, shares can get issued, bank accounts open, and any other startup business takes place.

The meeting minutes should get added to the corporate records as they document decisions made in this first official board meeting. Connecticut does allow some flexibility on timing, permitting organizers to hold this meeting before filing the Certificate of Incorporation in certain situations.

Obtaining an EIN from the IRS

Now that your Connecticut corporation formally exists, it needs to obtain its own Employer Identification Number (EIN) directly from the IRS. An EIN functions like a Social Security Number does for individual tax purposes.

Having your corporation's EIN is required for filing business tax returns each year and opening a bank account. Most banks will request the EIN when applying for corporate accounts as part of their due diligence.

As of 2023, applying for an EIN is free for both online or paper applications submitted through the IRS website. It typically takes just a few minutes to get your EIN if you apply digitally during business hours.

Staying Compliant After Incorporating

Remember that incorporating your small business creates ongoing legal obligations with both Connecticut and the IRS in order for your corporation to remain authorized to operate. Staying compliant is crucial for maintaining the liability protections incorporation provides.

In Connecticut, every corporation must file an annual report by their anniversary date to keep current with state records on directors, officers, shares issued and your registered agent. There is a $150 annual report filing fee each year due at the end of your incorporation month. For example, if your Certificate of Incorporation posted on March 15, 2023 - then each subsequent annual report must be filed by March 31 to avoid penalties.

On the tax side, Connecticut corporations may need to pay corporate income tax, sales taxes collected, and/or the state business entity tax. Consulting a tax professional can help you stay organized with the various federal and Connecticut tax requirements.

Lastly, certain business licenses, permits and DBA registrations may still be needed depending on your industry and local municipality rules. Verify what is required for your specific corporation's activities to remain legally compliant.

Conclusion

That covers the major steps for incorporating a new for-profit business in the state of Connecticut. Incorporating does take commitment to maintain, but forming a corporation protects your personal assets and opens up additional growth opportunities like attracting outside investors.

Connecticut offers fairly business-friendly incorporation rules and tax rates comparable to surrounding states. If tackling the paperwork alone seems overwhelming as a startup founder, don't hesitate to seek help from professionals like business formation services, lawyers and accountants along the way. Taking the right initial steps when starting your Connecticut corporation makes maintaining compliance easier year after year.