Forming a limited liability company, or LLC, is a popular way to start a business. Owners enjoy advantages in the way of taxes, flexibility, and legal protection for members. A Connecticut business lawyer will help you set up the organization and maintain it correctly. Here are the basics of how to start your LLC.
First, you need to pick a name for your business. You want a name that represents your company and what it does best. But you also want to make sure you’re following Connecticut naming requirements. Ensure you are not infringing upon any trademarks. The name must also include the phrase “limited liability company,” “LLC,” or “L.L.C.” There may be restrictions and additional paperwork requirements if you are using certain words, such as “Attorney.” Also, you cannot include words that could confuse your business with a government entity.
Your name must be sufficiently unique so as to distinguish it from other business names. Of course, the name must also still be available for use. The Connecticut Secretary of State’s website maintains a database you can search to make sure your desired name isn’t taken. Finally, be sure you consider website domains and email addresses in choosing a name for your LLC.
Your next step is to choose a registered agent. This is an individual or business entity whose role is to receive legal documents on behalf of your business. The agent must be a resident of Connecticut or a company authorized to engage in business in the state. Also, an individual within the business, including yourself, may serve as the registered agent.
After you have chosen a registered agent, you need to register your LLC. This is done by filing a Certificate of Organization with the Connecticut Secretary of State.
This document contains the following information:
- Name and address of the business
- Contact information of the registered agent (including the agent’s signature)
- Contact information for managers or members
- Statement regarding how you will run the LLC
The form will require you to state whether your LLC will be member-managed or manager-managed. Your Connecticut business attorney can explain the differences between these two options.
You will want to effectively govern your LLC. This is where an operating agreement comes in. Although they are not required, operating agreements are a good practice for any business. They are legal documents which contain ownership provisions and operating procedures for the LLC. The operating agreement is useful for avoiding and resolving disputes between members. A Connecticut business lawyer can assist with drafting an effective and comprehensive agreement.
The next step you should take is obtain an Employer Identification Number (EIN). The EIN is like a Social Security number for your LLC. It is a requirement to do any of the following:
- Open a business bank account
- File federal and state taxes
- Hire employees for the company
You can obtain an EIN for free from the IRS, online or by mail, after the business has been formed.
There is no statewide business license, but some localities in Connecticut require them. Regulated professions also have their own licensing procedures. If you’re unsure about whether you need to take these additional steps for your LLC, consult a business attorney.
Finally, be sure to file your annual report each year. The annual report updates the LLC’s contact and business information, and is filed online with payment of a $20 fee. Failure to file the annual report could cause your LLC to lose its good standing.
Contact a Connecticut Business Attorney Today
Limited liability companies offer an array of benefits to new businesses. But it is important that each step of the formation process is followed in accordance with Connecticut requirements. After your LLC is created, you also need to keep up with obligations such as filing the annual report. Aeton Law Partners has the experience you need to meet your business goals. Lastly, give us a call to speak with one of our professionals today.