- Choose a unique corporate name: The name should be distinguishable from other businesses registered with the Connecticut Secretary of State.
- File a Certificate of Incorporation: This is required to grant legal status to your corporation in Connecticut. The fee for filing is $250, including a minimum franchise tax of $150.
- Appoint a registered agent: Your corporation must have a registered agent for service of process in Connecticut, with a physical address in the state.
- Create a stock structure: Clearly define the number of shares, classes or series, and their associated rights and limitations in the Certificate of Incorporation.
- Develop corporate bylaws: Although not legally required, bylaws are important for establishing the corporation's rules and showcasing its legitimacy.
- Appoint initial directors and hold the first board meeting: Incorporators must appoint the initial directors, who will serve until the first annual meeting of shareholders.
- File an annual report: Domestic corporations must file an annual report online within 30 days of their organizational meeting, with a filing fee of $150 for domestic and $435 for foreign corporations.
- Obtain an Employee Identification Number (EIN): Apply for an EIN through the IRS website at no cost.
- Register foreign corporations: Foreign corporations must register with the Connecticut Secretary of State, appoint a registered agent, and file an Application for a Certificate of Authority, with a filing fee of $385.
- Check for required business licenses: Depending on the type of business and its location, your corporation may need local and state business licenses.
Opening a corporation offers tons of benefits. It offers liability protection to its owners, helping shield most of their assets against the corporation's financial obligations, debts, etc.
Owners can get liability protection as the corporation is a separate entity, and only the latter's assets can be used in case of debts and obligations. Opening your own corporation in Connecticut also comes with lucrative tax benefits.
Dive in to learn more about the steps required to start your own corporation in Connecticut.
What Are The Requirements For Opening A Corporation In Connecticut?
Starting your own corporation in Connecticut is relatively easy. However, entrepreneurs or business enthusiasts must complete these steps carefully to start their own company.
Create A Corporate Name
The first step to starting your corporation in Connecticut is creating a name. The name should be unique in nature. People should be able to set this name apart from names of other businesses registered with the Secretary of State.
One can visit the Connecticut Secretary of State business registry search to check what names are available.
Individuals can reserve a business name for 120 days by filing an Application for Reservation of Name. This application must be filed with the Secretary of State and the fee is $60.
Connecticut law requires businesses to have one of the following designations: corporation, incorporated, company, Societa per Azioni, or limited; or the abbreviation corp., inc., co., S.p.A., or ltd.
File Certificate Of Incorporation
A corporation gets legal status when the owner files the certificate of incorporation with the Secretary of State in Connecticut. The certificate must include the following details:
- Name of corporation
- Number and class of shares the corporation can issue if the corporation will have more than one class of shares
- The rights and limitations associated with each share class
- NAICS code
- The name, address, and signature of an agent for service of process
- The name, address, and signature of each incorporator, and
- If the corporation opts to benefit from corporation status
The certificate of incorporation can be filed online or via mail. The fee for filing the same is $250. This also includes a minimum franchise tax worth $150.
Equip Your Corporation With A Registered Agent
Every Connecticut corporation shall have a registered agent for service of process in the State. A registered agent refers to a person or a corporation that agrees to accept the legal papers of the corporation if they are sued. The agent shall have agreed to the same before the corporation names the agent.
Here are some requirements for a registered agent. The Connecticut business agent can be:
- The agent shall be a full-time resident of Connecticut. This agent can include an officer, director, or corporation shareholder.
- A Connecticut business entity
- A foreign business entity that has been equipped with a certificate of authority to carry out business transactions in Connecticut
It is also crucial for the agent to have a physical address in Connecticut. Generally, small corporations opt for a director or officer to serve as an agent initially. You can always name a different agent later.
Prepare A Stock Structure
The certification of incorporation filed with the Secretary of State must also state the total number of shares a corporation is authorized to issue. Stocks of a corporation can be divided into various classes or series. For example, certain sorts of stocks can offer voting rights in the company while other sorts of stocks may not.
In case of more than one class or series of shares, the certificate shall include the number of shares in each class or series. The certificate shall also provide a designation for each class or series. Before shares are issued, the certificate shall also state the terms, including that class or series's preferences, rights, and limitations.
Prepare A Set Of Corporate Bylaws
For the uninitiated, corporate bylaws refer to an internal corporate document. This document sets the rules for operating your own corporation. These bylaws are not filed with the state. There is no legal requisite for a corporation to be equipped with corporate bylaws.
However, it is crucial to adopt the same as they establish the corporation rules of your new endeavor. They can help showcase the legitimacy of your corporation to banks, creditors, and the IRS.
As a corporation owner, you must keep track of bylaws, articles, stock certificates, minutes of shareholders, director meetings, and other vital documents. A Corporate records book can help.
Choose Initial Directors And Hold Your First Ever Board Meeting
The onus is on the incorporator or the person who signed the articles to appoint the corporate directors for the board. The appointed directors will continue to serve on the board until the first annual meeting of shareholders takes place. During the annual meeting, the shareholders appoint the next set of board members as directors.
The incorporator must complete and sign an "Incorporator's statement" consisting of the names and addresses of initial directors. There is no need to file this statement with the Secretary of State. However, the incorporator must maintain a record of it in the corporate records book.
Once initial directors have been appointed, the first board meeting can occur. During this meeting, the directors appoint corporate officers, adopt bylaws, choose a corporate bank, set the fiscal year, greenlight the issuance of shares of stock, and adopt an official stock certificate form and corporate seal. It is pertinent to remember that share issuances by small privately held corporations are exempted from Federal and State Security Laws.
File An Annual Report
Any individual or people authorized to carry out business-related activities must file an annual report with the Connecticut Secretary of State. It is required for domestic corporations to file this annual report online within 30 days following the organizational meeting of the corporation.
The report is filed with the help of the Organization and First Report form. It shall include the corporation's name, the principal office, names, and addresses of directors and officers. All annual reports must be filed online via the Connecticut Secretary of the State Online Filing System.
For domestic corporations, the filing fee is $150. For foreign corporations, the filing fee is $435.
Obtain An Employee Identification Number
The corporation must also equip itself with an Employee Identification Number or EIN. You can obtain your EIN by completing an application on the IRS website. There is no filing fee required.
What Are The Costs Associated With Forming A Corporation In Connecticut?
Here are some of the costs associated with starting your own corporation in Connecticut:
- Register your unique business name with the Secretary of State in Connecticut for $60.
- You can file the Certificate of Incorporation with the Connecticut Secretary of State for $250.
- It is pertinent for businesses incorporated in Connecticut to file an annual report with $150.
- Foreign corporations have to pay a $435 filing fee.
How To Register A Foreign Corporation In Connecticut?
Registering or incorporating a foreign business in Connecticut is relatively simple. However, business owners must follow all the steps carefully.
All corporations outside Connecticut shall register with the Connecticut Secretary of State. It is also required for foreign corporations to appoint a registered agent for service of process. The agent must have a physical location or address in Connecticut.
The foreign corporation must also file an Application for a Certificate of Authority to complete its registration. There shall also be an authenticated certificate regarding the corporation's legal existence from its home state, which should be at least 90 days old.
The certificate of authority application can be filed online or via postal mail. The filing fee for the same is $385. Before filing, the foreign corporation must check whether the business name is available. To do so, they can check with the Connecticut Secretary of State's business registry search. The corporation must use a fictitious name for business transactions if the name is unavailable. The business must file a resolution by its board of directors that has been certified by its secretary. In this resolution, they will adopt the fictitious name and the Application for a certificate of authority.
If done carefully, the process of incorporating in Connecticut is relatively hassle-free. Once you have picked an appropriate business name and filed a certificate of incorporation with the Secretary of State, you can finish the other necessary steps. There are also specific costs associated with incorporation in Connecticut every step of the way. There are also certain state and federal income taxes to keep in mind. Teaming up with a professional to form a corporation in Connecticut can make the process even more efficient!
How Do I Know If My Business Name Is Available To Use In Connecticut?
To know if your business name is available to sue in Connecticut, you can take the help of the Secretary of the State’s website. On that website, you can check whether the proposed name of your business is available for usage or has already been taken up by another business.
Is It Mandatory To Create Corporate Bylaws In Connecticut?
Not all states mandate corporate bylaws for businesses. However, being equipped with the same is always a good idea. Corporate bylaws refer to an internal corporate document that provides the basic ground rules for running a corporation in Connecticut. They provide an outline of the board of director’s procedures and policies. These bylaws help prove the legitimacy of corporations before banks, creditors, and the IRS.
What Are The Steps For Registering An S Corporation?
The corporation must submit Form 2553 Election by a Small Business Corporation. All shareholders of the business should sign this form. It should be filed within two months and fifteen days from the beginning of the corporation’s first tax year.
Does A Corporation In Connecticut Require A Business License?
Based on the type of business or its location, your business may need to equip itself with local and state business licenses.
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