Opening a Company in Connecticut; LLC or Corporation

To open a company in Connecticut, whether an LLC or a Corporation, you must file a Certificate of Incorporation with the Secretary of State of Connecticut.

As required by CT Gen Stat § 33-660, every company in Connecticut must appoint a Registered Agent. It is not necessary to hire one if you have an address in Connecticut [office or residence]; you can perform this function yourself.

LLC Taxation

For those about to open an LLC in Connecticut, it is important to know that in Connecticut, LLCs, generally defined as "pass-through" entities like partnerships, for example, can benefit from increased federal deductions to offset the impact of the new limit on the federal tax return for the deduction of state and local taxes [SALT] which from 2018 is capped at $10,000. In Connecticut, the taxation of LLC income occurs at a rate of 6.99% — equal to the maximum marginal rate on individual income in Connecticut. Remember that in Connecticut, LLC incomes are taxed through transparency to the member using the rates for individual income taxation. LLC owners in Connecticut, therefore, receive a tax credit on their personal state taxation equivalent to about 93% of the tax share paid by the LLC. Moreover, they are entitled to a full deduction of the 6.99% tax paid in Connecticut as a business expense in their federal tax returns, as the taxation in question does not encounter limits in deductibility.

Below, we report the minimum information that must be included in the Certificate of Incorporation for Connecticut:

• Type of Business. Most companies fall under the Domestic Stock Corporation category
• Name of the company
• Number and class or category of Shares to be authorized
• Company email. This information is optional
• NAICS Code. It's the American equivalent of the ATECO codes
• Name and address of the Registered Agent
• Acceptance of the position by the Registered Agent
• Benefit Corporation status. Most companies are not benefit corporations
• Any other provisions 
• Name and address of the Incorporator. The Incorporator is the person or people who sign and file the Certificate of Incorporation.

Attention: All information included in the Certificate of Incorporation becomes permanently public.

Following confirmation by the Secretary of State of Connecticut that the company has been validly established, the first Shareholders' Meeting must be held and followed by the first Board of Directors meeting to appoint the company Officers and adopt the Bylaws [which correspond to the corporate statute of Italian companies] The corporate statutes are internal documents that do not become public and must be recorded and kept as with other company records, for example, the minutes of meetings and resolutions. For LLCs in Connecticut, the procedure may vary depending on the internal structure given to the LLC.

Filing the Organization and First Report and the Annual Administrative Report in Connecticut

The Organization and First Report require many of the same information already in the Certificate of Incorporation. This report is due once and must be submitted within 90 days of filing the Certificate of Incorporation.

Furthermore, companies must also submit an annual administrative report. The filing is due by the anniversary of the company's opening date in Connecticut. Therefore, if your company was incorporated on October 23, the annual report is always due by October 23.

C-Corporation Taxation in Connecticut

The taxation on company income in Connecticut has a minimum of $250 and is applied through the Corporation Business Tax, which applies only to C-Corporations. There are two taxable bases for calculating the income tax on companies: The net income, which is taxed at a rate of 7.5%, or the "Capital Base," which is taxed at a rate of 0.31%. The taxable base that generates the larger amount should be used.

Franchise Tax in Connecticut. Connecticut companies must also pay a franchise tax of $150 per year. For companies with over 20,000 authorized shares, the franchise tax increases. The first Franchise Tax is due when filing the Certificate of Incorporation.

The Sales Tax rate in Connecticut is 6.35%. Cities and Counties cannot add additional taxes to the state sales tax rate.

A Brief Overview of Connecticut's Economy

In 2022 (most recent data), Connecticut's Gross Domestic Product (GDP) was $322 billion, with an increase of 7.86% compared to 2021. The main companies headquartered in Connecticut, by number of employees, are Hartford HealthCare, Raytheon, and Amazon.Com, which in 2023 employed respectively 37,000, 17,000, and 15,000 people.

Connecticut has a population of 3,653,868 people [data for the year 2023] with an average annual growth of 0.4% over the last five years, ranking it 30th among all 50 states of the United States for population growth rate.

The number of employed in Connecticut in 2023 was 1,971,794, with an average annual employment growth over the last five years of -0.2%. Also, in 2023, the unemployment rate in the state was 4.0%