Did you know that every year, a little over 4,000 new businesses get started in the state of Connecticut? The state’s booming economy and wide range of industries make it a great place for anyone interested in opening a business to investigate.
If you’re thinking of forming an LLC in Connecticut yourself, you might want to consider creating an LLC operating agreement. Doing so can make your business opening process easier and provide you with legal protections.
Is an LLC Operating Agreement Required in Connecticut?
An LLC operating agreement is not required in Connecticut. However, that’s not to say that you shouldn’t make one.
A Connecticut LLC operating agreement is important for laying out the rules and regulations of your new company, as well as being critical for establishing legal credibility.
Connecticut Operating Agreement Laws
Even though LLC operating agreements aren’t required by the state of Connecticut, there are a few key laws surrounding these documents. These laws are outlined in Chapter 613a Uniform Limited Liability Company Act.
The act states that LLC operating agreements in Connecticut have to contain a few key topics. For one, they need to outline member relations as well as the rights and duties of members.
They should also clearly state the process that the company will take if it needs to make amendments to the operating agreement.
Aside from these aspects, operating agreements in Connecticut cannot unreasonably limit the rights of its members. They help protect the members from unfair treatment within the organization.
You also need to ensure that when naming your LLC it contains ‘Limited Liability Company’ or the abbreviations ‘LLC’ or “L.L.C.’ The word “Limited” may be abbreviated as “Ltd.” and the word “Company” as “Co.”
When filing your articles of organization, you need to make sure that your registered agent is one of three:
- an individual who is a full-time resident of Connecticut (including a member or manager of the LLC), or
- a Connecticut business entity, or
- a foreign business entity that has obtained a certificate of authority to transact business in Connecticut.
How Much Does it Cost to Form an LLC in Connecticut?
Anyone interested in forming an LLC in Connecticut should be aware that it will cost you $120 to file your articles of organization—these articles are what establish your company and allow you to legally begin operations.
In addition to that, you can file a name reservation application so that you can reserve your business name before opening the LLC. If you chose to do so, you can expect to pay $60 for the application.
How to Form an LLC in Connecticut?
If you want to form an LLC in Connecticut, here are the steps that you’ll need to take:
Step 1 – Download the Application
The first step toward forming an LLC in Connecticut is to download the applications from the Connecticut Secretary of State website. You’ll be able to download these on your computer and fill them out.
There are two different types of applications that you can choose from. One of these is a domestic application and the other is a foreign application. You’ll need to choose which type of LLC you’re forming before filling out the documents.
Step 2 – Pay Your Filing Fee
Once you’ve finished filling out your LLC application, you’ll need to actually pay to open it. The filing fee can either be paid via mail or by hand delivery to the Connecticut Secretary of State. Whichever way you choose, just make sure to include the application with your payment.
Step 3 – Operating Agreement
Once you’ve filed your application and paid any necessary fees, your LLC is ready to hit the ground running. At this point in time, it’s a good idea to write up your LLC operating agreement.
In your new operating agreement, you need to lay out how your business plans to manage and run its operations. You also need to specify the positions and duties of owners as well as their rights.
Step 4 – Get an Employer Identification Number (EIN)
The last step of the process is to get an Employer Identification Number, which is also known as an EIN. This is necessary for your business to perform financial transactions, hire employees, apply for loans, and open bank accounts.
The EIN is also important for tax purposes. The IRS uses the EIN to track your business transactions and ensure that you’re not over or under-paying your taxes.
Connecticut LLC Operating Agreement Template
Here’s a template that will get you started on writing up the perfect Connecticut operating agreement: