Business Types

Business Types in CT

There are numerous business types you can open and operate in CT. Following are five common business types:

LLC: This type of business may be better for you as a business owner if you require flexibility in how you will maintain and run your company. Other key highlights:

You don’t have to have a board of directors, and an unlimited number of members or owners are allowed.
You are not personally liable if someone starts litigation with your business.
You have to file quarterly taxes and cannot take your company public should it grow.
State law requires that every new Connecticut LLC designate a Connecticut registered agent that will be available during regular business hours at a physical address within the state.

Learn more about applying and filing fees.

S-Corporation (S-Corp): This type of business is usually ideal for smaller businesses that have no more than 100 owners. Other key highlights:

S-Corps can offer common stock so that equity can be passed around to those who help build your company.
Some business owners open an S-Corp so that they can offer stock incentives in the leaner, early years of their business' growth.
You are not personally liable if someone starts litigation with your business.
You are taxed only once a year. And shareholders only pay taxes on the profits they receive.
There are more strict rules in place for an S-Corp including keeping meeting minutes for shareholders, and all shareholders must be U.S. citizens.

Learn more about applying and filing fees.

C-Corporation (C-Corp): This business type is best for those who plan to take their company public one day. Other key highlights:

Shares of the company can be given to directors, owners, and employees.
C-Corps are recognized internationally, and owners do not have to be U.S. citizens.
You are not personally liable if someone starts litigation with your business.
You are taxed twice a year. The business pays corporate taxes and shareholders pay on their earnings.
With a C-Corp you must have a board of directors.
There are strict rules about keeping meeting notes for all shareholders and board members.

Learn more about applying and filing fees.

Sole Proprietorship (Sole prop): This business type can have only one owner and is a common company set-up for solopreneurs. Other key highlights:

You are on the hook if someone decides to sue you or your business is liable for property or personal damage.
You are taxed once a year on your company’s profits.
You can start with just a “doing business as name” often called a DBA.
In many industries, you don’t need a license to operate.

Learn more about applying and filing fees.

Non-profit (501(c)3: A non-profit is best for those who want to make an impact in their communities but aren’t as concerned about profits or going public. Other key highlights:

No one technically owns the non-profit. You can just oversee it.
You cannot be held personally liable for damages in a lawsuit.
Your business is tax-exempt if you choose to file for tax exemption.
There are strict rules to keep both accounting and meeting records.

Learn more about applying and filing fees.

Franchise: A franchise is a smaller business that may be nationally known that you can operate inside of Connecticut. Other key highlights:

You usually have to pay the franchiser fees to use their branding and notoriety, and often have to operate your business under rules and guidelines that the franchise sets up.
There are thousands of franchise business opportunities in CT.

Learn more about CT franchise laws. You can check sites like these to learn more:

Learn more about the Connecticut Business Opportunity Act.

Visit the Connecticut Department of Banking for more regulations on businesses including franchises, LLCs, corporations, and more.

Learn about small business lending available for Latin-owned business.

Business Types

Business Types in CT

Browse Categories

Related Articles