Llc Law Offices: Connecticut's Legal Entity Option

When starting a new business, many owners opt to form a limited liability company (LLC) to benefit from limited liability for business debts, flexible management structures, and tax advantages. Connecticut imposes several requirements for LLC names, including the need to include “Limited Liability Company” or its abbreviations (LLC or L.L.C.) and to distinguish the name from existing businesses. While Connecticut allows professionals like doctors, lawyers, and engineers to form a Professional LLC (PLLC), it's important to note that Connecticut does not permit certain professionals, such as accountants, attorneys, and physicians, to form a PLLC. This article will explore the process of forming an LLC in Connecticut, the specific requirements for law offices, and the ongoing steps necessary to maintain compliance and limited liability.

Naming requirements

When forming an LLC in Connecticut, there are several naming requirements that you must follow. Firstly, your chosen name must be distinguishable from the names of any existing businesses that have been formed, registered, or reserved with the Connecticut Secretary of State. You can use Connecticut's business records search to check if your desired name is available.

Secondly, your LLC's name must include an entity designator. Specifically, it must contain the words "Limited Liability Company" or the abbreviations "LLC" or "L.L.C.". You can abbreviate "Limited" to "Ltd." and "Company" to "Co.".

If you wish to reserve a business name before filing, you can apply to the Secretary of State to reserve your desired name for 120 days. This costs $60.

Additionally, you should consider registering the domain name for a business website. You can check for trademarks on the United States Patent and Trademark Office (USPTO) website and the Connecticut trademark database. By registering a trademark, you can protect your company name and brand.

If your LLC wishes to operate under a name different from the one you have registered with the state, you must file a trade name, also known as a "fictitious name" or "doing business as" (DBA), with the county clerk in your area.

It is also important to follow any naming guidelines put in place by your industry's regulatory agency, as different industries may have slightly different requirements for business names.

Furthermore, the name you choose cannot imply a government association or an unlawful purpose. Certain words may also require additional documentation or licensure to avoid misleading the public about the nature of your business.

For a professional LLC (PLLC), instead of using the designator "LLC" or "limited liability company," you must end the name with "professional limited liability company," "PLLC," or "P.L.L.C.". Each member of the PLLC must be licensed or authorized to perform the professional services the LLC was created to provide.

Overall, choosing a unique and memorable name for your LLC is essential to making your business stand out from the competition.

Certificate of Organization

A Certificate of Organization is a document that establishes your LLC in Connecticut. It is filed with the Connecticut Secretary of State and can be submitted online, by mail, or in person. The fee for filing the Certificate of Organization is $120.

The Certificate of Organization requires specific information, including the name of the LLC, which must follow Connecticut naming guidelines. The name must include the words "limited liability company" or the abbreviation "LLC" or "L.L.C." and cannot include words that could be confused with a government agency. It must also be distinguishable from existing business names in the state.

In addition to the LLC name, the Certificate of Organization requires the names and addresses of each member or manager of the LLC. Connecticut law requires LLCs to have one or more members or managers, and each person's address must be a physical address, not a post office box. The Certificate of Organization must also state whether the LLC will be managed by managers or by its members.

After filing the Certificate of Organization, there are several additional steps to take. These include creating an operating agreement, which outlines the ownership structure and member roles of the LLC, obtaining an Employer Identification Number (EIN) if the LLC will have employees or open a business bank account, and registering a domain name for a business website.

It is important to note that Connecticut does not allow professionals such as accountants, attorneys, and physicians to form Professional Limited Liability Companies (PLLCs). However, if you provide a licensed professional service, you can form a PLLC, which can only offer one specific type of professional service and ancillary services.

Registered agents

To form an LLC in Connecticut, you must appoint a registered agent. This can be an individual or a company, but they must be listed on the LLC formation documents (Certificate of Organization) and their name and address will enter public records.

The registered agent acts as the point of contact for the business and must be available during regular business hours to accept important legal and tax documents. This means that the registered agent's address becomes the official place where any service of process and official mail for the LLC will be sent.

If the agent is an individual, they must be a resident of Connecticut and be over the age of 18. They must also maintain a physical street address in the state (no PO boxes).

Many business owners elect to hire a registered agent service to fulfil this role, as it can provide peace of mind that all documents will be received by a trusted company. It also provides convenience, as the business owner does not need to be tied to a desk and can go about their day as usual. Additionally, some documents that a registered agent receives, such as service of process papers, are best kept private and can be accepted at an off-site location by a registered agent service.

Registered agent services are affordable, with some companies offering rates as low as $49 or $50 per year.

Ongoing requirements

Once you have formed an LLC in Connecticut, there are several ongoing requirements that you must meet to maintain compliance and preserve the limited liability an LLC provides. These include:

Annual Reports

LLCs in Connecticut are required to file an annual report, which is due on the anniversary date of the LLC's incorporation. The annual report fee is $20, although one source suggests it is $80. This report is necessary to obtain a certificate of legal existence, which may be required for financial transactions. Failure to file this report could result in the Secretary of State dissolving your LLC.

Taxes

Connecticut LLCs must comply with various tax obligations. Unless your LLC is taxed as a corporation or is a single-member LLC, it will be considered a pass-through entity. As such, you must file Form CT-1065/CT-1120SI to report your income and pay income tax. Before filing the state form, you must complete federal Form 1065, U.S. Return of Partnership Income. Additionally, your LLC must make quarterly estimated payments, and members must report and pay their share of the LLC's income on their personal tax returns. These returns and payments must be submitted to the Connecticut Department of Revenue Services (DRS).

If your LLC has employees or plans to open a business bank account, you will need to obtain a Federal Tax Identification Number (EIN) from the Internal Revenue Service (IRS).

Business Licenses and Permits

Most businesses in Connecticut require business licenses and/or permits. These can vary depending on the industry and the type of services provided. It is important to research and stay on top of these requirements to maintain compliance.

Registered Agent

Your LLC must maintain a registered agent who is available during normal business hours to accept important legal and tax documents on behalf of the LLC. This agent can be an individual Connecticut resident or a business entity authorized to operate in the state, but they must have a physical address in Connecticut (no P.O. boxes).

Out-of-State Registration

If your LLC is based in Connecticut but conducts business in other states, you may need to register as an out-of-state LLC in those states. This is typically required if you have a physical presence, hire employees, or advertise directly to residents in another state. Each state has its own rules and requirements for out-of-state business registration, so be sure to review these before conducting any activities outside of Connecticut.

Taxation

LLCs in Connecticut must also obtain a Federal Tax Identification Number (EIN) if they will have employees, as most banks require this to open a business account. However, Connecticut does not require a state tax identification number.

Connecticut LLCs must also pay a $120 filing fee to submit their certificate of organization, and there are additional fees if any information in the certificate needs to be amended. There is also a $60 fee to reserve an LLC name before filing.

In terms of the tax implications of being a law office, Connecticut does not allow professionals such as attorneys to form a Professional Limited Liability Company (PLLC). However, other sources suggest that a group of licensed professionals, such as lawyers, can form a PLLC, and that each member of the PLLC must be licensed to perform the services the LLC was created for.

Frequently asked questions