By Fernando Berrocal
Learn how to create a corporation in the southern New England state of Connecticut. This state is a mixture of coastal cities and rural areas dotted with small towns. This blog will inform you of the main steps necessary to form a business in this state including what forms you'll need, how much it will cost, and other important details.
The Advantages of Forming a Corporation
A corporation provides liability protection to its shareholders, allowing them to secure the majority of their assets from the business's financial commitments, debts, and liabilities. This is since a corporation is a distinct entity from its owners, and only the corporation's assets may be used to fulfill the corporation's debts and obligations. There may be financial benefits to forming a corporation.
Connecticut's Incorporation Requirements
Getting Ready to File Your Certificate of Incorporation
You must obtain a certificate of incorporation with the Secretary of State and pay a filing fee to form a Connecticut corporation. As soon as the certificate is filed, your corporation becomes legally recognized. Many requirements may be included in the Certificate of Incorporation, however, they must include the following:
- Name of the corporation’s registered agent.
- Names and addresses of incorporators.
- Details on the corporation’s stock structure.
In regards to the stock structure, the certificate of incorporation must state the total number of shares the corporation is authorized to issue. Different classes or series of stock can be used for different reasons; for example, certain types of stock may provide voting rights in the startup while others do not.
If there are many classes or series of shares, the certificate must include the number of shares in each class or series as well as a designation for each. Before shares in a class or series are issued, the certificate must contain the terms, including the class or series' preferences, rights, and limits.
Are you ready to start a corporation?
Choosing a Corporate Name
You should research the Secretary of State's website before filing a certificate of incorporation to ensure that your desired business name is available. By completing an application with the Secretary of State, you can reserve a name for your corporation for 120 days. The following factors must be followed while picking a name for your startup:
- The terms "corporation," "incorporated," "company," "Societa per Azioni," or "limited," or the acronyms "corp.," "inc.," "co.," "S.p.A." or "ltd." must appear in a corporation's name.
- The business name must be distinct from existing business names on the Secretary of State's records.
Incorporators must be specified
The incorporator is in charge of filing the certificate of incorporation with the Secretary of State. The names and addresses of the incorporators must be mentioned on the certificate of incorporation. The following conditions must be met when designating incorporators:
- At least one incorporator is required for your startup.
- A person must be an incorporator.
If the incorporators do not designate initial directors in the certificate of incorporation, they must conduct an organizational meeting to elect them. They can also establish bylaws and elect executives. The incorporators have no further responsibilities after the organizational meeting is completed.
Corporate directors are in charge of creating corporate rules and procedures as well as supervising the startup's administration. Directors must always prioritize the corporation's and shareholders' interests before their interests.
One or more directors can serve on a board of directors. Either the articles of incorporation or the bylaws should specify the number of directors. Although there are no limits on who can serve on a board of directors in Connecticut, your corporation's bylaws may include eligibility requirements for directors.
The Choice of a Registered Agent
A corporation must select a registered agent to receive legal procedures such as lawsuits and legal papers addressed to the corporation. You must meet the following conditions when naming a registered agent:
- Your registered agent must have a street address in Connecticut.
- By signing the certificate of incorporation, the agent agrees to function as a registered agent.
- A resident of Connecticut or a corporation, limited liability company, or limited liability partnership incorporated in or allowed to conduct business in Connecticut may serve as the registered agent.
- A corporation can't act as its registered agent.
Defining a Corporate Purpose
You are not required by Connecticut law to include a corporate purpose in your certificate of incorporation.
Choosing Bylaws for Incorporation
The bylaws of a corporation layout the startup's internal policies and processes. Bylaws are retained at the corporation's principal place of business rather than being filed with the Secretary of State. Bylaws typically include provisions such as the number of officers and directors, how voting is conducted, and how meetings are to be held. Connecticut does not specify any specific content for bylaws, but bylaws typically include such provisions as the number of officers and directors, how voting is conducted, and how meetings are to be held.
While Connecticut does not have any specific criteria for company bylaws, it does have the following:
- Bylaws must be adopted by the directors or incorporators.
- Nothing in the bylaws can be unlawful or contradictory to the articles of incorporation.
Incorporation Fees in Connecticut
Now that you know how to incorporate in this state you might want to know how to incorporate in other states near Connecticut such as New York, Pennsylvania, and Delaware. After all of this, are you ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page.