Incorporating a Business in CT: Everything You Need to Know
Abbreviations for these designations are also acceptable. The name you choose must be distinguishable from existing business entities in the state.3 min read
Incorporating a business in CT involves the following steps:
- Choosing a corporate name.
- Filing a Certificate of Incorporation.
- Appointing a Registered Agent.
- Setting up a records book.
- Preparing bylaws.
- Specifying incorporators.
- Appointing initial directors.
- Holding a board of directors meeting.
- Issuing stock.
- Filing annual reports.
- Complying with various tax requirements.
- Opening a business bank account.
Incorporating in Connecticut: First Steps
Legally, your corporation's name has to include a designator, such as one of the following:
Abbreviations for these designations are also acceptable. The name you choose must be distinguishable from existing business entities in the state.
You legally create a corporation when you file a Certificate of Incorporation with the Secretary of State.
Include the following on your Certificate:
- Corporation name and address.
- Purpose of the corporation.
- Agent for service of process's name, address, and signature.
- Each incorporator's name and address.
- Number and class of shares.
- Rights and preferences for shares.
It costs $250 to file your certificate online.
All corporations are required to have an agent for service of process, also known as a Statutory Agent, Resident Agent, or Registered Agent. This is a person or company that accepts legal papers on behalf of your corporation. No corporation may act as its own agent.
Agents may be any of the following:
- Full-time residents of Connecticut.
- A business entity in Connecticut.
- A foreign entity that's authorized to conduct business in Connecticut.
All agents are required to have a physical street address in the state. Post office boxes are not acceptable.
Recordkeeping and Important Documents
Start a corporate records book, where you'll keep the following:
- Director and shareholder meeting minutes.
- Stock certificates and stubs.
- All important corporate papers.
Draft bylaws, which are an internal document that lays out ground rules for running your corporation. You don't file bylaws with the state. While you're not legally required to have them, you should still adopt bylaws because they do the following:
- Demonstrate to banks, the IRS, and creditors that your business is legitimate.
- Establish your operating rules.
Your incorporator — the individual who signed the Certificate of Incorporation — delivers the Certificate to the state. This person also appoints the corporation's initial directors.
Meetings and Stock Shares
At the initial board of directors meeting, directors may do any of the following:
- Adopt corporate bylaws.
- Appoint corporate officers.
- Choose a corporate bank.
- Set the fiscal year.
- Authorize stock issuance.
- Adopt a stock certificate and corporate seal.
You'll issue stock to all of your shareholders. While it's not a legal requirement, small corporations typically issue paper stock certificates. In your stock transfer ledger, record each shareholder's name as well as his or her contact information.
Connecticut corporations are required to file an annual report with the state. Within 30 days of their organizational meeting, domestic businesses must file. The cost is $150 for corporations in the state and $435 for foreign corporations that do business in the state.
Corporations in Connecticut must register with the Department of Revenue Services. They're required to have a tax registration number before being allowed to operate. They can register online at the Department's website. In addition, all corporations must pay a yearly business entity tax of $250.
Your corporation will need an Employer Identification Number (EIN) from the IRS. It's free to obtain an EIN. You want to get your number as soon as possible because you'll need it to open a bank account for the corporation. You use an EIN much like a Social Security Number — it identifies your business to the IRS.
You may need to obtain certain business licenses. This depends on where your corporation is and the type of business you operate. Local and state licenses may be required. Check the Licensing Info Center website to see which licenses apply to you.
Before you can make any major financial moves, you must open a bank account for your business. This separates corporate finances from personal ones.
Because forming a corporation is more complicated than forming a simple business structure — such as a limited liability company — you may want to consult with legal and tax professionals when you start this type of business.
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