How to Incorporate in Connecticut – Formation Guide
How to Incorporate in Connecticut
Complete Connecticut Corporation Formation Guide – C-Corp, S-Corp & Professional Corporations
Connecticut Corporation Overview
🎯 Quick Facts: Connecticut Corporation
- Formation Fee: $250 (stock corps) / $50 (nonstock/nonprofit)
- Annual Report Fee: $150/year
- Business Entity Tax: $250/year minimum
- Processing Time: 5-10 business days
- Online Filing: Available via CONCORD system
- Statute: Connecticut Business Corporation Act (Conn. Gen. Stat. § 33-600 et seq.)
- S-Corp Election: ✅ Available (IRS Form 2553)
Connecticut Corporation Types
| Corporation Type | Governing Statute | Best For |
|---|---|---|
| C-Corporation | Conn. Gen. Stat. § 33-600 et seq. | Standard for-profit businesses, startups raising capital, companies planning to go public |
| S-Corporation | C-corp + IRS election | Pass-through taxation for profitable small/medium businesses (tax status, not entity type) |
| Professional Corporation (PC) | Conn. Gen. Stat. § 33-182 et seq. | Licensed professionals: doctors, lawyers, CPAs, engineers, architects |
| Benefit Corporation | Conn. Gen. Stat. § 33-1350 et seq. | Mission-driven businesses balancing profit with social/environmental impact |
| Nonprofit Corporation | Conn. Gen. Stat. § 33-1000 et seq. | Charitable, educational, religious organizations (501(c)(3) eligible) |
| Close Corporation | Overlay on stock corp | Small, closely-held businesses with relaxed governance (max 35 shareholders) |
When to Choose Connecticut Corporation
✅ Form in Connecticut If:
- Your business operates primarily in Connecticut
- You’re a Connecticut resident starting a company
- You’re a licensed professional needing a professional corporation
- You want to avoid foreign qualification complexity/costs
- You need straightforward corporate governance under modern statute
🤔 Consider Delaware If:
- Raising VC funding: VCs typically require Delaware C-Corp
- Planning IPO: Delaware overwhelmingly preferred for public companies
- Complex cap table: Multiple share classes, preferred stock, anti-dilution provisions
- Want Court of Chancery: Specialized business court with 200+ years of precedent
Connecticut vs Delaware vs Other States
| Factor | Connecticut | Delaware | Wyoming |
|---|---|---|---|
| Formation Fee | $250 | $89 | $100 |
| Annual Report | $150/year | $300/year (franchise tax) | $60/year |
| Business Entity Tax | $250/year minimum | $0 | $0 |
| Year 1 Total | $650 | $389 | $160 |
| Ongoing Annual | $400 | $300+ | $60 |
| VC Preference | Neutral | ✅ Preferred | Not typical |
⚠️ Connecticut Corporation Costs Are Higher
Connecticut has higher formation and ongoing costs than many states:
- Year 1: $650 ($250 formation + $150 report + $250 tax)
- Years 2+: $400/year ($150 report + $250 tax)
This is worth it if: You’re doing business in CT anyway (you’ll owe CT taxes regardless of where you incorporate). Avoid foreign qualification costs ($250) by incorporating here.
Official Connecticut Resources
C-Corporation vs S-Corporation in Connecticut
🔑 Key Concept: S-Corp is a Tax Election, Not an Entity Type
You form a Connecticut corporation under state law, then elect S-corporation tax treatment with the IRS using Form 2553. The entity is still a Connecticut stock corporation; “S-corp” only changes federal/state taxation.
C-Corporation (Default)
A C-corporation is taxed under Subchapter C of the Internal Revenue Code. This is the default status when you incorporate.
Taxation
- Federal: 21% flat corporate tax on net income
- Connecticut: 7.5% corporation tax on net income (for corps with $100M+ income, rate increases)
- Double taxation: Corporation pays tax, then shareholders pay tax on dividends
✅ When to Choose C-Corp
- Raising venture capital (VCs require C-Corp)
- Planning to go public (IPO)
- Want to retain earnings without shareholder tax
- Offering stock options / equity compensation plans
- Foreign shareholders (S-corp prohibits non-US owners)
S-Corporation (Tax Election)
An S-corporation elects pass-through taxation under Subchapter S by filing IRS Form 2553.
Taxation
- Federal: No corporate tax; profits pass through to shareholders’ personal returns
- Connecticut: S-corps pay 7.35% entity-level tax (not full pass-through like federally)
- Avoid double taxation: Income taxed once (at shareholder level federally; entity + shareholder level in CT)
- Self-employment tax savings: Owners can split income between salary (FICA subject) and distributions (not FICA subject)
S-Corp Eligibility Requirements
- 100 shareholders or fewer
- Only U.S. citizens/residents as shareholders (no foreign owners)
- One class of stock (voting/non-voting OK; different distribution rights NOT OK)
- Not a financial institution, insurance company, or DISC
✅ When to Choose S-Corp
- Profitable small/medium business (want to avoid double taxation)
- Save on self-employment tax (FICA)
- All owners are U.S. individuals
- No plans to raise VC funding or go public
Side-by-Side Comparison
| Factor | C-Corporation | S-Corporation |
|---|---|---|
| Federal Tax | 21% corporate + dividend tax | Pass-through (taxed at shareholder level) |
| CT Tax | 7.5% on net income | 7.35% entity-level tax |
| Self-Employment Tax | N/A (salaries subject to FICA) | Salary subject to FICA; distributions NOT |
| Ownership Limits | Unlimited shareholders, any type | Max 100, U.S. individuals only |
| Share Classes | Multiple classes allowed | One class only |
| VC Funding | ✅ Required | ❌ VCs won’t invest |
| Best For | Startups, VC-backed, IPO plans, complex cap tables | Profitable small businesses, family-owned, professional practices |
Connecticut Professional Corporations (PCs)
A Professional Corporation (PC) is a corporation organized under Conn. Gen. Stat. § 33-182 et seq. to provide professional services requiring a state license.
Eligible Professions
Connecticut allows the following licensed professionals to form PCs:
- Attorneys (lawyers)
- Physicians & surgeons
- Dentists
- Chiropractors
- Podiatrists
- Optometrists
- Psychologists
- Veterinarians
- Certified Public Accountants (CPAs)
- Licensed Professional Engineers
- Architects
- Land Surveyors
PC Requirements
- All shareholders must be licensed in the profession the PC practices
- All officers/directors must be shareholders (thus, also licensed)
- Corporate name must include: “Professional Corporation”, “P.C.”, “Professional Association”, or “P.A.”
- State board approval: Some professions require pre-approval from licensing board before formation
Formation Fee & Annual Costs
| Item | Cost |
|---|---|
| Certificate of Incorporation (PC) | $250 |
| Annual Report | $150/year |
| Business Entity Tax | $250/year minimum |
PC vs PLLC
| Factor | Professional Corporation | Professional LLC |
|---|---|---|
| Formation Cost | $250 | $120 |
| Annual Cost | $400 ($150 + $250 tax) | $330 ($80 + $250 tax) |
| Default Tax | C-corp (double tax) | Pass-through (partnership) |
| Governance | Formal (board, bylaws, meetings) | Flexible (operating agreement) |
| Best For | Multi-owner firms, equity comp, S-corp election | Solo practitioners, small groups, simplicity |
Connecticut Benefit Corporations
A Benefit Corporation is a for-profit corporation that elects benefit status under Conn. Gen. Stat. § 33-1350 et seq. to pursue general public benefit alongside profit.
Key Features
- Dual purpose: Create shareholder value AND general public benefit
- Stakeholder consideration: Directors consider shareholders, employees, community, environment
- Annual benefit report: Report on benefit performance against third-party standard
- Mission protection: Benefit purpose locked in Articles of Incorporation
Formation & Annual Costs
Same as standard corporations:
- Formation: $250
- Annual Report: $150
- Business Entity Tax: $250 minimum
- Benefit Report: Required (filed with annual report, no separate fee)
How to Form a Connecticut Corporation
1Choose a Corporate Name
Name must:
- Include “Corporation”, “Incorporated”, “Company”, “Limited” or abbreviation (Corp., Inc., Co., Ltd.)
- Be distinguishable from existing CT business names
- Not contain restricted words (bank, insurance, trust) without approval
2Appoint Directors
Connecticut requires at least one director. Directors don’t need to be CT residents or shareholders.
3File Certificate of Incorporation
File with Connecticut Secretary of State via CONCORD system.
Required Information
- Corporate name
- Number of authorized shares (must specify par value or no par value)
- Registered agent name and CT address
- Incorporator name and address
- Initial directors (names and addresses)
- Corporate purpose (can be “any lawful purpose”)
Filing Fee
- Stock corporations: $250
- Nonstock/nonprofit corporations: $50
4Create Bylaws
Bylaws govern internal operations. Must include:
- Board size, election, terms, removal
- Officer roles and duties
- Shareholder meeting procedures
- Stock issuance and transfer restrictions
- Amendment procedures
5Hold Organizational Meeting
- Adopt bylaws
- Elect officers
- Authorize stock issuance
- Adopt corporate seal (optional)
- Authorize opening of bank account
- Adopt fiscal year
6Issue Stock
Issue stock certificates to initial shareholders documenting their ownership.
7Obtain EIN
Apply for Employer Identification Number (EIN) at irs.gov (free, immediate).
8Register with Connecticut DRS
Register for:
- Business Entity Tax ($250/year minimum)
- Corporation tax (7.5% on net income)
- Withholding tax (if employees)
- Sales tax (if selling goods)
Register at CT Taxpayer Service Center.
Connecticut Corporation Annual Compliance
| Requirement | Deadline | Fee |
|---|---|---|
| Annual Report | Anniversary month of incorporation | $150 |
| Business Entity Tax Return | April 15 | $250 minimum |
| Corporation Tax Return (Form 1120) | March 15 (calendar year corps) | Varies (tax due) |
| CT Corporation Tax Return (Form CT-1120) | 30 days after federal deadline | 7.5% of net income |
Connecticut Corporation Taxes & Fees
Connecticut Corporation Tax (7.5%)
Connecticut corporations pay 7.5% tax on net income sourced to Connecticut.
Business Entity Tax ($250 minimum)
All Connecticut corporations owe Business Entity Tax:
- Minimum: $250/year
- For larger corps: 0.31% of gross income from CT sources (if over threshold)
Total Annual Tax & Filing Burden
Annual Report
$150
Business Entity Tax (minimum)
$250
Corporation Tax (on profits)
7.5% of net income
Minimum Annual Cost (profitable corps):
$400 + 7.5% of profit
Beneficial Ownership Information (BOI) Reporting
Under the Corporate Transparency Act, most Connecticut corporations must file BOI reports with FinCEN.
Who Must Report
- Connecticut corporations formed after January 1, 2024
- Existing corps must file by January 1, 2025
- Report beneficial owners (25%+ ownership or substantial control)
Filing Deadline
- Formed before 2024: File by January 1, 2025
- Formed in 2024: File within 90 days of formation
- Formed after 2024: File within 30 days of formation
File at boiefiling.fincen.gov (free).
Connecticut Corporation Formation Services
As a Connecticut-licensed attorney, I offer comprehensive corporation formation and ongoing legal support.
⚖️ Real Attorney, Not a Paralegal
When you work with me, you get:
- Direct access to a Connecticut-licensed attorney
- Bylaws and shareholder agreements drafted personally for your situation
- C-corp vs S-corp tax analysis and election assistance
- Professional corporation licensing compliance
- Benefit corporation benefit reporting setup
My Connecticut Corporation Formation Packages
📄 DIY Formation Support – $599
- Step-by-step Connecticut corporation formation guide
- Name availability check
- Certificate of Incorporation template & review
- Bylaws template
- Organizational meeting checklist & minutes
- Stock certificate templates
- EIN application guidance
Total
$599
⚡ Full-Service Formation – $1,699
- Everything in DIY package, plus:
- I file Certificate of Incorporation for you (includes $250 state fee)
- Registered agent service (1 year included)
- Custom Bylaws drafted by me personally
- Organizational meeting preparation
- Stock issuance & ledger setup
- EIN obtained on your behalf
- CT DRS registration assistance
Total
$1,699
🏆 Premium Formation + Tax Planning – $3,299
- Everything in Full-Service package, plus:
- 1-hour corporate tax strategy consultation
- C-corp vs S-corp election analysis
- S-corp election filing (Form 2553) if beneficial
- Capitalization table design
- Stock option plan setup (if needed)
- 6 months ongoing advisory support
Total
$3,299
📞 Ready to Get Started?
Book dedicated attorney time to map out your Connecticut corporation, from capital structure to tax elections.
Prefer email? I respond within one business day (Mon–Fri).
- Email: owner@terms.law