How to Start a Business in Connecticut

Connecticut offers four ways of forming your business, which we'll cover in detail below. Review these closely and pick the one that fits your business best.

Make a list of names that you like and perform a basic Google search to find any conflicts with other Connecticut business names. Follow this with a trademark search to ensure that the business name has not already been trademarked.

After you have confirmed that your business name is not trademarked, visit the Connecticut Secretary of State website and conduct a name availability search to ensure that your business name is not the same or similar to another corporation registered in Connecticut.

Nearly all businesses will need to register for federal taxes by applying for an employer identification number.

When you've chosen a legal structure and name, you can go ahead and register your business with Connecticut's official state website. Depending on the type of legal structure you chose, you will need to complete specific application forms.

For instance, those starting an LLC in Connecticut would first need to complete and file a Certificate of Organization, whereas those forming a corporation would need to complete and file a Certificate of Incorporation. You will need to pay a filing fee.

There is no general business license required in the State of Connecticut. Instead, general business licenses are dispensed locally, and they’re not needed for all business types.

For instance, those working in the construction industry would need to obtain a building permit. If you fail to obtain the appropriate licensing and permits, you will be held liable and required to pay a penalty fee.

Common Licenses & Permits Needed in Connecticut:

• Sales and Use Tax Permit: Businesses must obtain a Sales and Use Tax Permit if they intend to engage the sale, rental, or lease of products, the sale of taxable services, and the operation of a hotel, motel, lodging, or B&B establishment. There is a $100.00 one-time permit fee.

• Zoning & Land Use Permit: Zoning permits are issued at a local level by boards and commissions that are made up of local, elected residents. While the filing fee varies by county, you can expect to pay between $40.00 - $200.00.

• Signage Permit: A signage or sign permit allows you to publicly display information that presents and advertise your business. There is a $25.00 filing fee.

For a more comprehensive list of the types of permits and licenses you need to start your business, use the business checklist tool provided on the CT.gov business website.

Each business has different types of tax obligations. The taxes you pay is determined by the type of business you own and various other labor, safety, and tax obligations that need to be met. You can visit the Connecticut Department of Revenue or the Taxpayer Service Center for more information on the type of tax you qualify for.

In Connecticut, the statewide rate of 6.35% applies to the retail sale, lease, or rental of most products and services.

You can file and make payments with the Connecticut Department of Revenue Services (DRS) myconneCT online center or over the telephone with the Business Telefile System. If you choose to register online, it's important to note that the fee must be paid through your savings or checking account. No credit card payments are accepted. Your registration could take up to ten days to complete.

For those looking to obtain a seller's permit fast, we recommend registering through your local offices. If you visit during business hours, you will immediately receive a temporary permit.

An employer is required to withhold tax if the employee is a resident of Connecticut or completing services in the state. You can file electronically with the myconneCT online center, via the telephone with the Business Telefile System, and through the Federal/State Employment Taxes (FSET) program.

Corporation Business Tax is required from businesses that file as C corporations for federal income tax purposes. Certain businesses are exempt from Corporation Business Tax.

Business owners must file their Corporation Business Tax Return and make payments electronically by using the myconneCT online center.

All employers are required to report new hires to the Connecticut Department of Labor within 20 days of hiring them. This does not apply to independent contractors. Employers can report new hires using the Department of Labor's online new hire reporting system.

All business owners who hire employees are required to obtain workers' compensation insurance. The Connecticut Workers' Compensation Act ensures that all employees who experience a work-related injury, illness, or death receive medical care, protection against income loss, and survivor benefits.

In the state of Connecticut, all employers are mandated to display posters that highlight employee benefits, compensation, wages, and workplace safety information. All posters must be displayed in a populated area to ensure that employees have easy access to the information.