Start a Connecticut Corporation

Deciding to start a corporation can be overwhelming. There are countless articles online explaining pieces of the puzzle, but it’s hard to piece everything together. In this guide, we’ll cover the basics of incorporating your business in Connecticut. First, let’s review corporation types. 

There are a few common corporation types: C corporations, S corporations, professional corporations, and nonprofit corporations. In a C corporation, taxes are paid at both the corporate and individual level (known as “double taxation”). 

An S corporation avoids this double taxation issue with a C corporation and allows income to pass through to owners’ personal income without corporate tax rates. However, a C corporation can be better for getting investors to raise capital because S corporations are limited in their number of shareholders. 

Next, a professional corporation (sometimes called a professional service corporation or a PC) is a corporation that’s organized by certain professionals. For example, doctors, chiropractors, lawyers, accountants, and other licensed professionals can form a professional corporation in Connecticut.

Nonprofit corporations, on the other hand, can avoid taxation, as they can get a special exemption from the IRS. All of these corporation structures need to follow strict organizational rules and record all earnings. 

We’ll walk you through everything you need to know about forming Connecticut corporation, offering key insights and tips along the way.

The rules and regulations for incorporating your business vary from state to state. In this guide, we’ll cover the specific steps and guidelines that you must follow to incorporate your business in Connecticut. To simplify the process of forming a corporation in the state of Connecticut, we’ve put together 10 steps to form your business:

Step 1: Name your Connecticut corporation

The first step to starting a corporation in Connecticut is to name your corporation.

Follow the state naming requirements

In the state of Connecticut, corporations cannot have any language that implies that the corporation was organized for a purpose other than permitted in the Articles of Incorporation. All corporation names in Connecticut must include one of these words or their abbreviations:

• Corporation (Corp.)
• Societa per Azioni (S.p.A.)
• Company (Co.)
• Limited (Ltd.)
• Incorporated (Inc.)

Considerations for Naming a Professional Corporation

The rules for naming a professional corporation look just a little different. For one, you’ll use a slightly different designator; the main choices are the phrase “professional corporation” or its abbreviation, “PC.”

Connecticut state law also requires you to include a word or words that explain your professional service. For example, you might include “Law Firm” if you’re forming a PC for your legal company. Alternatively, you can include a name of one of your past or present shareholders.

Searching for and Reserving a Name

The Connecticut Secretary of State offers a business registry search service to help ensure that your corporation name is available in the state. You can search here to see if the name is available. If the name is available, but you’re not quite ready to register your business, you can choose to reserve the corporation name on the Secretary of State’s website. Submitting an application requires a filing fee. You’ll need to mail the form to:

Commercial Recording Division
Connecticut Secretary of the State
P.O. Box 150470
Hartford, CT 06115-0470

You may also deliver it to:

Commercial Recording Division
Connecticut Secretary of the State
30 Trinity Street
Hartford, CT 06106

Consider trademarks and DBAs

It might also be prudent to look into registering a trademark and/or a “doing business as” (DBA) name. Registering a trademark prevents others in the same or a similar industry from using your trademark. And a trademark at the federal level can offer broader protection, especially for businesses planning on doing business outside of Connecticut. 

Trademarks

Even if you choose not to trademark your corporation name at the federal level, your corporation is still subject to trademark infringement lawsuits, so it’s important to check the federal trademark database to ensure your corporation name doesn’t violate any trademarks.  

State trademarks are usually a lot easier to obtain. However, having your corporation name trademarked in Connecticut would only protect your corporation name in the state. You can check if a trademark is available in Connecticut online. If it is, you can fill out an Application for a Certificate of Registration of a Trade or Service Mark, which can be done online or mailed.

DBAs

A “doing business as” (Connecticut DBA) name doesn’t provide legal protection; it’s just a different name for your business. To use a DBA in Connecticut, you will need to register your DBA name with the county clerk. DBA names are useful for a corporation that wishes to run its business under a different identity than what is registered officially. DBA names tend to come with more leniency and less restriction, as multiple businesses can have the same DBA name in the state.  

Step 2: Appoint directors

All corporations have appointed directors who act as the corporation’s governing body. Overall, they manage the corporation’s business and are responsible for ensuring that its activities are running smoothly. 

Director Requirements and Considerations

Directors can be virtually anyone in the corporation. For instance, an owner might be a director. In Connecticut, every corporation must have at least one director, but there are no restrictions on who can serve as a director unless stated in your bylaws. If you’re starting a PC, keep in mind that all of your directors have to be licensed in your business’s profession.

Committees

Depending on the size and structure of a corporation, the board of directors can create committees with appointed members. All in all, the board of directors can vary from corporation to corporation, making it extremely important to set rules or restrictions for the board in the Articles of Incorporation or bylaws. 

Step 3: Choose a Connecticut registered agent

Connecticut requires that every corporation have a registered agent. A registered agent works as the point of contact for your corporation if it must be reached by the Secretary of State or a similar government body. The agent also receives legal notices, such as service of process for a lawsuit.

Registered Agent Requirements

The registered agent must be a full-time resident of Connecticut or a business authorized to do business in the state. The agent must also have a street address in Connecticut (P.O. boxes are not sufficient).

Can I be my own registered agent?

You can be the registered agent for your corporation in Connecticut; however, that is not always recommended. To qualify as a registered agent, one must be available during all normal business hours, able to be served any legal notices, and capable of quickly relaying any legal documents to the correct people in the corporation. 

Step 4: File the Connecticut Certificate of Incorporation

Connecticut requires that businesses file the Certificate of Incorporation. Connecticut doesn’t have a separate version of this form for professional corporations; both types use the same form.

Instructions for Completing the Form

In the upper left-hand corner is a box requesting the name and address of the person filling out the form. This is where the confirmation of certification will be sent after approval.

• Corporation name: Provide the name of the corporation, which must contain “corporation,” “incorporated,” “company,” “Societa per Azioni,” or the abbreviations “corp.,” “inc.,” “co.,” “S.p.A.,” or “ltd.” The name must be unique in Connecticut; it may not be the same or very similar to any other company name. The Secretary of the State’s office can direct you to a name search page, where you can search for your chosen name. This step helps ensure it isn’t already taken. Once your chosen business name is approved, you may reserve it for 120 days.
• Total number of authorized shares: The company can authorize as many shares as it wants. The number of shares or stocks above 20,000 is subject to the franchise tax.
• Shares: If the company plans to issue more than one class of shares, it must be noted on the Certificate. Also, note the number of shares in each class. In addition, describe the terms and limitations, if applicable.
• Email address: Enter the corporation’s email address. If it doesn’t have one, select “NONE.” This is an important detail because the Secretary of the State uses the email address for correspondence related to the incorporation.
• NAICS code: Enter the six-digit NAICS code. This is a code issued by the North American Industry Classification System. It’s used by federal agencies and other companies to classify, analyze and publish business-related data.
• Appointment of a registered agent: The agent receives notices, documents, and legal processes at its physical address and forwards them to an officer of the corporation. The agent must be available at the location during standard business hours. This can be either an individual or another business, but it cannot be the business itself. Section 6A is applicable to an individual with a physical street address in Connecticut as well as a Connecticut mailing address. A P.O. box isn’t permitted for the physical address but is acceptable for the mailing address. If the agent is a business, Section 6B, a signature is required to indicate acceptance of the appointment as the agent.
• Benefit corporation: A benefit corporation, in addition to its primary statement of purpose, also has the purpose of creating a public benefit. If the benefit corporation has one or more specific public benefit(s), in addition to the required general public benefit, then specific public benefits must be set forth in Box 8 “OTHER PROVISIONS,” below Box 7 on the form.
• Other Provisions: Use this space or add an attachment for any information a corporation is permitted but not required to provide. If you have a benefit corporation, list any specific public benefits beyond the required general public benefit here.
• Section 9 is a table in which incorporators’ names, addresses, and signatures are written. You must list at least one incorporator.

File online or by mail

Once you have the required information for the Certificate of Incorporation, you can file online or by mail. To file the Certificate of Incorporation, you will need to pay a $250 fee (which is the same if you file online). After you’ve made the check payable to the Secretary of the State, send the finished Certificate of Incorporation to this address: 

Business Services Division
Connecticut Secretary of the State
P.O. Box 150470
Hartford, CT 06115-0470

Step 5: Create corporate bylaws

Although Connecticut does not require corporate bylaws, it’s still a good idea to have them. When done correctly, corporate bylaws can explain everything from your corporation’s leadership structure to the shareholder agreement. Bylaws should be specific and outline operational procedures and standards for every owner of the corporation to follow. Additionally, they dictate the duties of the corporation’s directors and officers.    

Bylaw Inclusions

Bylaws may include: 

• The corporation’s name
• The official address
• The number of corporate officers/directors that the corporation must appoint
• Meeting procedures
• Rules for corporate record-keeping 
• Procedures for amending bylaws and the Certificate of Incorporation 
• The type and number of shares 

Using a Template

Corporate bylaws can be tedious to create, especially if it’s your first time creating them. Using a corporate bylaw template can help ensure that your corporation outlines some of the most critical information. 

Step 6: Draft a shareholder agreement

A shareholder agreement provides shareholders with the opportunity to settle disputes and compromise on critical decisions within the corporation. A well-written shareholder agreement should prevent future arguments from escalating into anything more than simple disagreements. Simply put, a shareholder agreement outlines shareholders’ rights and obligations in the corporation.

What should a shareholder agreement include?

In addition to a business plan that should have a unified vision, a shareholder agreement should include:

• Protection to minority shareholders 
• Restriction on disposal of shares 
• Director limitations 
• Steps to resolve disputes among shareholders
• The right to remove directors  

Step 7: Issue shares of stock

Issued shares are the authorized shares that are sold and held by company shareholders. Corporations can only issue a share once. After it is issued, investors can sell the share to other investors. 

Record shares of stock

Issued shares must be recorded on the company’s balance sheet. They should be recorded as owners’ equity or capital stock. A private company circulates its reports among its closed group of stakeholders and doesn’t have to share them with the public.

Financial Reports

A private company must file financial reports with the Securities and Exchange Commission (SEC) when it has more than 500 common shareholders and $10 million in assets, as set by the Securities and Exchange Act of 1934.

Why are shares of stock important?

Why are issued shares important? Company shares not only help the corporation turn a profit, but they also help analysts and investors measure what the company is worth. For measuring market capitalization and earnings per share (EPS), analysts use the number of issued shares to calculate. Both of these figures help them to determine the company’s worth.

Issuing Stock as a Professional Corporation

According to Connecticut state law, professional corporations can only issue shares of stock to professionals who are licensed in your chosen industry. While this does somewhat limit your company’s ability to raise startup capital, it’s an essential requirement to uphold.

Step 8: Apply for necessary business permits or licenses

Your Connecticut corporation might be subject to a variety of federal, local, and statewide regulations. To see whether you need to apply for industry-specific Connecticut business licenses or permits, visit AdvanceCT’s license search.

In addition to state and local licensing, your business could require federal permits and licenses. Not all business activities warrant a federal permit; however, you should still check whether your corporation needs one. 

Typically, businesses handling agriculture, firearms, commercial fisheries, mining and drilling, radio and television broadcasting, and more will require federal licenses or permits.

Step 9: File for an EIN and review tax requirements

An Employer Identification Number (EIN) is needed to pay federal taxes, hire employees, open a business bank account, and apply for federal business licenses and permits. Applying for an EIN is done through the IRS website. You should apply for an EIN after you register your business. 

A corporation must have an EIN before they can file taxes. In addition to federal taxes, Connecticut has a corporation business tax on businesses that file as a C corporation. Some corporations are exempt from this tax. Visit this page to see if your corporation is exempt. Additionally, Connecticut requires all corporations to register with the Connecticut Secretary of State. You’ll also likely need to register for taxes with the Connecticut Department of Revenue Services.

Step 10: Submit your corporation’s first report

The Connecticut Secretary of State requires corporations to file their first report within 90 days of the initial meeting. The first report, or initial report, helps keep your business in good standing once incorporated. 

This report can be completed online with a fee of $150. Corporations can submit their first report on the Business Services Division Online Filing System through Connecticut’s Secretary of State website.

How much does it cost to start a corporation in Connecticut?

At a minimum, incorporating your business will cost $250 when filing your Certificate of Incorporation. Additional fees may include:

• Name reservation: $60
• Domain name registration: $25
• Federal, state, and local permits/licenses
• Initial report: $150

Bear in mind that fees are always subject to change, so check the CT Secretary of State website for the latest fee schedule.

Incorporating your business can be time-consuming, which is why ZenBusiness is here to help. If anything is filed incorrectly, it could set back your schedule to become a corporation and cost you more money in the long run.

What are the benefits of a corporation in Connecticut?

Incorporating your business comes with many benefits. First and foremost, incorporating your business protects your personal property. If an accident were to happen at your business, legal claimants would go through the corporation and not you in most cases.

Additionally, it sets you apart from other businesses by marking your business as a state-compliant corporation. Aside from possible business deals and added customer credibility, incorporation will give you recognition outside of the U.S. This opens the doors to business endeavors outside of the country and more opportunities to grow.

Although there are many benefits to incorporation, there are some drawbacks. To begin, corporations have additional paperwork, are more beholden to federal, state, and local compliance, and have a rigidly structured corporate hierarchy. For a company going from a small business to a corporation, it can be challenging to adjust to this change.

How is a Connecticut corporation taxed?

Depending on the corporation structure that your business chose, you will face different taxes. S corporations, C corporations, and nonprofit corporations have different tax structures in Connecticut. Here is a breakdown of taxation:

• S corporations: In Connecticut, S corporations must have 75 or fewer shareholders. By being registered as an S corporation, they avoid the double taxation of a C corporation.
• C corporations: A C corporation is a business entity owned by shareholders. C corporations file federal income tax returns and pay income taxes. As a result, the dividends paid to shareholders are “double” taxed.
• Nonprofit corporations: A nonprofit corporation must register with the Department of Consumer Protection Charities Unit. The Connecticut Secretary of State requires that nonprofit corporations contact its office to file the appropriate paperwork. Tax filing status varies according to which nonprofit organization type the corporation is considered.

Corporations in Connecticut must pay federal and state payroll taxes. Connecticut state payroll tax is considered high when compared to the rest of the country. It is a progressive income tax, which means that it ranges in percentage depending on an individual’s income. The state payroll tax can be as low as 3% or as high as 6.99%.

As a corporation, you will also have to factor in state unemployment insurance (SUI). An employer is responsible for paying the state of Connecticut SUI somewhere between 1.1% to 7.8% in tax as of 2024.

We can help!

Starting a business can feel like an overwhelming process, but it’s not one you have to navigate alone. While we don’t offer formation services for a professional corporation, we can help you form a standard corporation. Plus, we’ve got a variety of other services to help you stay compliant through the formation process and beyond.