Connecticut Business Guide
How to Start a Business in Connecticut
Everything you need to form your Connecticut LLC, corporation, or sole proprietorship, with exact fees, timelines, and step-by-step instructions.
An LLC in Connecticut costs $120 to form and $80 annually to maintain, making it an affordable business structure for new founders. Connecticut imposes no franchise tax or annual privilege tax on LLCs, and the state sales and use tax is a flat 6.35% with no additional city or county taxes anywhere in Connecticut.
This guide covers every step from choosing a business structure to obtaining the licenses and permits your business needs.
Choosing Your Connecticut Business Structure
This is the first decision and it affects everything: taxes, liability, paperwork. If you are unsure, an LLC is the right default for most Connecticut small businesses.
| Entity Type | Liability Protection | Taxation | Connecticut Filing Fee | Annual Cost | Best For |
|---|---|---|---|---|---|
| LLC | Yes | Pass-through | $120 | $80 Annual Report | Most small businesses |
| Corporation | Yes | Double (C-Corp) or pass-through (S-Corp) | $250 | $150 Annual Report | Raising investment, stock options |
| Sole Proprietorship | No | Pass-through | $0 | $0 | Freelancers, side hustles |
| Partnership | No | Pass-through | $0 | $0 | 2+ owners (consider an LLC instead) |
8 Steps to Start Your Connecticut Business
- 1
Choose your business structure
LLC, corporation, or sole proprietorship. Each has different costs, tax treatment, and liability protection.
- 2
Pick and reserve your business name
Search the Connecticut Secretary of the State, Business Services Division database. Reserve for $60 (120 days).
- 3
Appoint a registered agent
Must have a physical Connecticut street address. Can be yourself (free) or a service ($100 to $300 per year).
- 4
File your formation documents
Certificate of Organization (Domestic Limited Liability Company) ($120) or Certificate of Incorporation (Domestic Stock Corporation), followed by the Organization and First Report at $150 ($250) with the Connecticut Secretary of the State, Business Services Division.
- 5
Get your EIN from the IRS
Free, online, takes about 5 minutes. Do not pay anyone for this.
- 6
Register for a sales tax permit if you sell goods
Through the Connecticut Department of Revenue Services (DRS). State sales tax rate: 6.35%.
- 7
Get required licenses and permits
Connecticut has no single general state business license.
- 8
Register for Connecticut taxes
Personal income tax: Progressive, seven brackets ranging from 2% to 6.99%.
How Much Does It Cost to Start a Business in Connecticut?
| Item | Cost | Notes |
|---|---|---|
| LLC filing fee (Connecticut Secretary of the State, Business Services Division) Required | $120 | Most filings submitted online through Business.CT.gov are accepted automatically, so the state says expedited service... |
| Corporation filing fee Required | $250 | If forming a corporation instead |
| Annual Report Required | $80 | Filed every year with the Secretary of the State. |
| Name reservation | $60 | 120 days |
| Registered agent service | $0 to $300/yr | Free if you serve as your own |
| EIN (IRS) Required | $0 | Always free |
| Business license | Varies | Connecticut has no single general state business license. |
| Operating agreement | $0 to $500+ | Free template or attorney-drafted |
| Realistic LLC total (year 1) | $120 to $500 |
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Connecticut Business Guides
Formation & Entity Types
- How to Start an LLC in Connecticut
- How to Start a Corporation in Connecticut
- Sole Proprietorship in Connecticut
- Connecticut S Corp
- Connecticut Foreign LLC Registration
- How to Start a Nonprofit in Connecticut
- How to Dissolve an LLC in Connecticut
- Connecticut Certificate of Organization
- How to Change Your Registered Agent in Connecticut
- Connecticut LLC Reinstatement
Licenses, Permits & Registrations
- Connecticut Business License
- Connecticut LLC Annual Report
- Connecticut Trade Name Certificate
- Connecticut Business Name Search
- How to Get an EIN in Connecticut
- How to Get a Resale Certificate in Connecticut
- Connecticut Home-Based Business Laws
- Connecticut Certificate of Legal Existence
- Connecticut County Business License
- Connecticut Town Business Requirements Compared
- Connecticut Town Business Requirements Compared
- Connecticut Liquor Permit Guide
- Connecticut DCP Occupational Licensing
- Connecticut Business Search
- Connecticut Short-Term Rental Laws
- Connecticut License Lookup
- Connecticut Cottage Food License
- Connecticut Local Health District Food License Guide
- Connecticut Home Occupation Rules by Town
- How to Become a Notary in Connecticut
- Connecticut License Renewal and Continuing Education
- Connecticut Adult-Use Cannabis Licenses
- Connecticut Business Registration Step by Step
- Connecticut Zoning and Building Permits for a New Business
- Connecticut Peddler and Vendor Licenses
Taxes & Compliance
- Connecticut Payroll Taxes and Withholding for Employers
- Connecticut Business Taxes Explained for New Owners
- Connecticut Workers' Compensation Requirements for Employers
- Connecticut Unemployment Insurance for Employers
- Connecticut LLC Taxes
- Connecticut Sales Tax Permit
- Connecticut Employer Requirements
- Connecticut Meals Tax and Room Occupancy Tax for Restaurants, Hotels and Rental Hosts
- Connecticut Minimum Wage and Labor Laws for Employers
- Connecticut Pass-Through Entity Tax
- Connecticut Income Tax for Business Owners
- Connecticut Business Personal Property Tax
- Connecticut Paid Leave
- Connecticut Sales Tax
- Connecticut Corporation Business Tax and the 10% Surtax
Costs, Money & Services
Why Start a Business in Connecticut?
- An LLC costs $120 to form in Connecticut and $80 a year to keep in good standing through the annual report.
- A stock corporation costs $250 for the Certificate of Incorporation plus $150 for the Organization and First Report, then $150 a year.
- Connecticut charges no franchise tax or annual privilege tax on LLCs; the $250 Business Entity Tax was eliminated after the 2019 legislative session.
- The state sales and use tax is a flat 6.35% with no additional city or county sales tax anywhere in Connecticut.
- Expedited 24-hour review costs $50 per transaction and is available only online, and most Business.CT.gov filings are accepted automatically without it.
- Connecticut has roughly 3.69 million residents and about 360,000 small business owners, concentrated between the New York and Boston metro areas.
Connecticut Business Resources
Connecticut Secretary of the State, Business Services DivisionEntity filing, name search, online filingportal.ct.gov →Connecticut Department of Revenue Services (DRS)Sales tax permits, business tax registrationportal.ct.gov →Connecticut Small Business Development Center (CTSBDC)Free business counseling and trainingctsbdc.uconn.edu →SBA Connecticut District OfficeFederal loans, programs, and mentoringwww.sba.gov →
Frequently Asked Questions
- How long does it take to form an LLC in Connecticut?
- Most filings submitted online through Business.CT.gov are accepted automatically. If you request expedited review, processing takes 24 hours and costs $50 per transaction; expedited service is available only for online filings.
- What does it cost to form an LLC in Connecticut in the first year?
- Formation costs $120, and the annual report costs $80, totaling $200. If you need a sales and use tax permit, add $100 for the registration fee.
- Can a non-resident form an LLC in Connecticut?
- Yes. You can file a Certificate of Organization through Business.CT.gov regardless of whether you reside in Connecticut.
- What is the cheapest way to start a business in Connecticut?
- An LLC is cheaper than a stock corporation. An LLC costs $120 to form, while a stock corporation costs $250 for the Certificate of Incorporation and $150 for the Organization and First Report.
- Is an operating agreement required for an LLC in Connecticut?
- No. Connecticut does not require an operating agreement to form or operate an LLC. Many business owners create one to clarify management roles and how profits will be distributed.