How to Form a C Corporation in Connecticut

Introduction

If you’re looking to start a business, there are a lot of options out there. But one of the most popular is to incorporate your new venture as a corporation. Forming a corporation is not the same thing as forming a limited liability company (LLC), which has its own set of rules and regulations—and it’s important to know how your business will be structured from the start. This article will walk you through how to form a C corporation in Connecticut, including what forms you’ll need and how long it takes to get started.

Choose a business name.

To form a corporation in Connecticut, you must choose a business name. You should choose a name that is not already in use, is distinguishable and easy to remember, does not mislead the public about your product or service and does not imply government endorsement of your product or service. Additionally, the name cannot be too long (more than 30 characters) or too short (less than one character).

File the Certificate of Incorporation.

• File the Certificate of Incorporation. After you’ve been given the go-ahead to do so, you can file the Certificate of Incorporation for your corporation with the Secretary of State. This document is what officially establishes your business as a legal entity. The requirements include:
• Name and address of principal place of business where records will be kept
• Names and addresses of those who serve on its board (if any)
• Amount it’s authorized to issue in shares, which should be no more than 1 million shares at this point

Create and file the bylaws.

Once you’ve formed the corporation, you need to create and file bylaws. These are the rules that govern the internal operations of your corporation. Some of these rules include how directors are elected, how meetings are conducted, what procedures must be followed for buying or selling property, and more. Bylaws should be written in plain language so everyone understands them and they should always be filed with the secretary of state.

Appoint board members and officers.

• Appoint board members and officers.

The board of directors is the governing body of the corporation, which is responsible for overseeing the company’s activities and fiduciary duties. The board can appoint one or more officers to act on its behalf. The officers that a corporation may have will depend on its needs and activities, but it is always advisable to have someone who can serve as its secretary; some states require this officeholder in order to maintain corporate status. A president or CEO also may be required depending on your state’s laws.*

• Determine how many shares you’ll issue to shareholders, who will own them.*

In most cases, you will want your shareholders’ ownership interests to be represented by shares of stock (sometimes called “preferred” stock). These are somewhat similar in nature to non-voting preferred stock issued by publicly traded corporations—they represent ownership interest in a business but contain no voting rights—so they’re perfect for privately held businesses that want investors who won’t get involved with managerial decisions beyond their own financial stake.*

It’s also important that each shareholder hold exactly equal amounts of shares so that no one shareholder has more than another person would under any circumstances (and thus greater control over key decisions).

Hold the first board of directors meeting.

After you’ve created your corporation and filed the appropriate paperwork with the Secretary of State, it’s time to hold your first board of directors meeting.

• The board of directors is the governing body of a corporation. The board is responsible for establishing company policy and making major business decisions on behalf of all shareholders.
• The first meeting should be held as soon as possible after incorporation, but in no case later than 90 days after filing articles of incorporation with the state.
• In small corporations (fewer than 20 shareholders), it may be possible to hold an annual or special meeting instead of monthly meetings if both parties agree in writing by unanimous consent notice signed before each meeting date; however, you must still provide written notice at least 14 days before holding such an annual or special meeting.*

Issue stock to initial shareholders.

The next step is to issue stock to your initial shareholders. When you do this, it’s important to remember that the corporation must issue shares of the same class and amount to all shareholders. If you have multiple classes of stock available for purchase, then it’s possible for each shareholder to own a different number of shares in each class.

The final step is to file documents with the Secretary of State once you’ve formed your company. You can also file these forms electronically if they’re available in FileConnect through our Connect platform (this is only available if you opened your business online).

Obtain required licenses and permits.

To form a C Corporation in Connecticut, you must first obtain your Federal Tax Identification Number (EIN) from the IRS. You will also need to register for a State Sales Tax Number and pay sales tax on any purchases related to your business. For example, if you want to use office space for your business, rent it out or purchase equipment for it, then there will be sales tax associated with these transactions.

Once you’ve completed all of the above steps and established your records at the state level, there may be additional steps that apply specifically within Connecticut: For example, if you want to use an address other than where your business is located—say in case mail gets lost—you will need another permit called an Assumed Business Name Registration (ABNR). In addition, because C Corporations are required by law in Connecticut and some other states (such as California), they have stricter regulations regarding their formation process as compared with other types of corporations like S Corps or LLCs.

Forming a corporation can be daunting, but it’s not that hard!

The process of forming a corporation isn’t much different from forming an LLC. In fact, it’s essentially the same—you’ll just need to take on some additional steps. However, given that you’re creating a legal entity with its own tax obligations and rights (like limited liability), it’s important to do your research and make sure that it’s right for you.

If you’re looking for more information about how to form a C Corporation in Connecticut or other states, check out this article by our friends at BusinessDictionary!

Conclusion

A corporation is a great way to start any business, especially if you’re looking to protect yourself from liability. If you’re ready to get started on forming a C corporation in Connecticut, contact our office today! We can help guide you through each step of the process and make sure that everything is filed correctly so there are no delays down the road.