How to Move an LLC to Connecticut

An out-of-state LLC can change its state of organization to Connecticut through statutory domestication. Connecticut domestication is a legal transaction that changes an LLC’s state of organization, the state whose law primarily governs the company. An out-of-state LLC, also called a foreign LLC, that domesticates to Connecticut becomes a Connecticut LLC governed by the Connecticut Uniform Limited Liability Company Act (Conn. Gen. Stat. sections 34-243 through 34-283d).

The LLC is otherwise the same business entity before and after the domestication process. Whether the domestication can proceed also depends on the laws of the state the LLC is leaving. To find out whether your LLC qualifies and what the process involves, request a free analysis of your LLC move.

Some states use the name conversion for the legal procedure that changes an LLC’s state of organization, also called its domicile. In many of those states, a business can complete a conversion to change its domicile or to change its entity type. The same statutory process can accomplish either goal.

Connecticut has two distinct procedures for LLCs. A Connecticut LLC domestication changes a company’s domicile only. A conversion changes a business from one entity form to another. For example, a Connecticut corporation might convert to an LLC. This article deals with domestications that change an out-of-state LLC into a Connecticut LLC.

Why Business Owners Move LLCs to Connecticut

A Connecticut LLC domestication may make sense if a business owner moves to Connecticut or if the owners prefer to have Connecticut law govern the company. An owner might transfer an LLC to Connecticut for any of the following reasons:

• Owner convenience. An LLC domestication may be convenient for an owner who relocates to Connecticut. Administration of the business may be easier if it is governed by the state where the owner lives. It may also be more convenient to work with state agencies closer to the owner’s home.
• Decreased filing. An LLC that mostly does business in Connecticut but is organized in another state may need to file annual reports in both states. The business could reduce its annual reporting and fee requirements by changing its domicile to Connecticut if it no longer needs to file in the original state.
• Reduced taxes. An out-of-state LLC that mostly does business in Connecticut may be able to reduce its tax burden by domesticating to Connecticut. A state has the legal power to tax a business if there is a sufficient connection, called a taxable nexus, between the business and the state. An LLC may be outside the original state’s taxing authority if domestication to Connecticut removes the company’s taxable nexus with the former state. Thus, domestication may let the company avoid being taxed by multiple states.
• Improved legal framework. An out-of-state LLC that domesticates to Connecticut is governed by Connecticut law after the domestication. A Connecticut LLC domestication can be a good business decision if Connecticut law is a better fit for the company’s business plan or the members’ ownership or management arrangement.
• Networking benefits. A business owner in Connecticut can find reliable professionals more easily if the business is governed by Connecticut law. Local lawyers and accountants, for example, are more likely to be familiar with Connecticut’s business and tax rules. On the other hand, an owner will have a harder time finding professionals in Connecticut with expertise in another state’s laws.

Connecticut LLC Domestication Requirements

Connecticut LLC domestication under Conn. Gen. Stat. section 34-641(c) is not available for every out-of-state LLC. An LLC domesticating to Connecticut must comply with both Connecticut law and the current state’s law. Connecticut law controls the process and documents filed in Connecticut and determines the domestication’s legal effects.

The current state’s law governs whether the LLC can domesticate to Connecticut, the state must authorize domestication, the content of the written plan of domestication if required, the standard under which the LLC’s members or managers must approve the plan of domestication, and the effective date for the domestication.

Eligibility for Connecticut LLC Domestication

An LLC considering domestication to Connecticut must confirm that it is eligible for the process. The principal requirement is that the current state must authorize LLC domestications. Not all states do. The current state may call the process domestication, conversion, or another name. The important part is that the state must have a statutory procedure that lets an LLC organized in that state change its domicile to a new state.

An out-of-state LLC must also confirm that Connecticut lets LLCs engage in the company’s field of business. A Connecticut LLC cannot be a bank, telegraph company, gas, electric, or electric distribution company, water company, cemetery corporation, or any other company except a telephone company that requires the right to take and condemn lands or to occupy public highways in Connecticut. Connecticut law allows a Connecticut LLC to act as an insurance company, surety, or indemnity company under limited circumstances.

Before starting the Connecticut LLC domestication process, an out-of-state company should verify that its business is legal in Connecticut and can be engaged in by LLCs. Business owners must also review the LLC’s articles of organization and operating agreement to ensure there are no provisions that prevent domestication to a new state. If any restrictions are present, the LLC may need to formally amend the documents to allow the procedure.

Connecticut Professional Limited Liability Companies

Some states do not allow LLCs to provide professional services, which generally means services that a professional must have a license or equivalent legal authorization to provide.

Connecticut lets LLCs provide professional services only if the company’s name identifies it as a “professional limited liability company” or “PLLC,” each member has the required license or equivalent authority, the company provides services in Connecticut only through members with the necessary Connecticut licenses, and the company offers only one specific type of professional service, subject to an exception for LLCs with members who provide two or more healthcare-related services.

An out-of-state LLC that provides services that meet Connecticut’s definition of professional services should confirm that it holds all required licenses and satisfies all of Connecticut’s other requirements before domesticating as a Connecticut PLLC.

Required Documents for Connecticut LLC Domestication

The Connecticut LLC domestication process involves preparing and adopting several domestication documents that must satisfy both Connecticut’s requirements and the law of the state the LLC is moving from. The domestication documents memorialize the terms of the domestication and control the company when the domestication takes effect.

• Plan of Domestication. If required by the LLC’s current state, a Plan of Domestication designed to comply with the requirements of both Connecticut law and the law of the state that the LLC is moving from.
• Connecticut Statement of Domestication. The Connecticut Statement of Domestication with all information and any related documents needed for filing with the Connecticut Secretary of State’s Business Services Office.
• Domestication Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, statement of conversion, certificate of conversion, or a similar term.
• Connecticut Certificate of Organization. The Connecticut Certificate of Organization for filing with the Connecticut Secretary of State’s Business Services Office.
• Connecticut Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as a Connecticut LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Domestication. A resolution approving the transaction and adopting the Connecticut organizational documents as the LLC’s governing documents.

The Statement of Domestication and Certificate of Organization accept electronic signatures under Connecticut law. Filing through the Connecticut Secretary of State’s Business Services Office allows e-filing for electronically signed documents.

The LLC also completes several administrative tasks to implement the domestication. Conduct a preliminary name search with the Connecticut Secretary of State’s Business Services Office to determine whether the LLC’s name is available in Connecticut; if the name is unavailable, a slight name change may be required.

Obtain signatures on the Statement of Domestication and Certificate of Organization. File both documents with the Connecticut Secretary of State’s Business Services Office. File domestication documents with the Secretary of State or equivalent agency for the state that the LLC is moving from.

Cost of Moving an LLC to Connecticut

The cost of moving an LLC to Connecticut depends on the scope of work involved. The documents and filings described above require professional preparation to comply with both states’ requirements, and coordinating submissions with two separate state agencies adds further complexity. To find out what your specific move will cost, request a free analysis of your LLC move.

In addition to professional service costs, the Connecticut Secretary of State charges a filing fee of $100.00 for the Statement of Domestication and $120.00 for the Certificate of Organization. The total Connecticut filing fee for inbound domestication is $220.00.

• Standard Filing: $100.00 (Statement of Domestication) + $120.00 (Certificate of Organization) = $220.00 total.

The fees paid to Connecticut are in addition to any filing fees that must be paid to the LLC’s original state. Most states charge a separate fee for LLCs domesticating out of state.

An out-of-state LLC that domesticates to Connecticut will also incur labor costs and registered agent fees. Labor costs are the amounts charged by the service provider the LLC retains to manage the Connecticut domestication.

Service providers may charge a flat fee or charge by the hour, with fee amounts varying by provider. Work that goes into a domestication includes obtaining and organizing information, drafting the domestication documents, communicating with the business owners and state agencies, and filing domestication documents with state agencies.

Connecticut requires LLCs to appoint a registered agent with authority to accept service for the company. An LLC’s registered agent must have a place of business in Connecticut. A member or manager who lives in Connecticut can act as registered agent.

However, an agent’s name and residence address are listed with the secretary of state, so LLCs often hire commercial registered agents for privacy reasons. Commercial registered agents also help keep legal process organized and consistent. Commercial registered agents’ fees are typically around $100.00 to $200.00 per year.

Processing Time for Connecticut LLC Domestication Filings

A Connecticut LLC domestication proceeds in several steps. The length of the process depends on how long each step takes.

Each step depends on the responsible person’s turnaround time: the business owners’ time to organize the necessary information, the service provider’s time to review the information and prepare the domestication documents, the owners’ time to approve and sign the draft documents or request revisions, the service provider’s time to file the final domestication documents with state agencies, and the state agencies’ time to accept and process the filed documents.

The domestication becomes effective upon the date and time the certificate of domestication is filed with the Connecticut Secretary of State. For a detailed breakdown of each phase in the domestication timeline, see the guide to LLC domestication process.

Legal Effect of Connecticut LLC Domestication and Benefits of Domestication

Connecticut LLC domestication moves an out-of-state LLC to Connecticut with minimal disruption to the company’s day-to-day business. The process’s legal effects are designed to allow steady operations throughout the domestication. The advantage of the domestication process over other methods of changing states is that domestication involves minimal business disruption.

• Business identity. The company remains the same entity before, during, and after the domestication. It has the same Employer Identification Number and taxpayer history. An LLC that domesticates to Connecticut is the same entity before, during, and after domestication and can still use the same Employer Identification Number.
• Governing law. The LLC begins the domestication governed by another state’s law and ends as a Connecticut LLC governed by Connecticut’s Uniform Limited Liability Company Act. The new Connecticut certificate of organization and operating agreement bind the company and its members after domestication.
• Company assets and liabilities. The LLC owns all of the same property and other assets after domestication that it owned before domestication. There is no need to prepare deeds, assignments, or other documents transferring assets. The LLC also owes all the same debts and other liabilities. There is no need to open or close bank accounts as a result of domestication. The LLC can open new accounts with a Connecticut-based bank, but it does not have to.
• Contracts and employment relationships. The Connecticut LLC remains a party to all contracts that were in place entering the domestication with the same contractual rights and duties. Because the LLC remains the same entity with the same EIN, domestication has no effect on existing employment relationships. Employees still work for the same company, so firing and re-hiring is unnecessary. Business contracts are still valid and effective, so there is no need to renegotiate agreements with suppliers, vendors, or other third parties.
• Day-to-day operations continue as normal. The business’s day-to-day operations continue uninterrupted throughout the domestication process.
• Legal proceedings. Any legal actions or administrative proceedings in which the LLC is involved are not affected by the domestication. If the company’s name changes, it can simply substitute the new name for the old name.
• Ownership interests. Members’ ownership interests in the out-of-state LLC become ownership interests in the Connecticut LLC in the same proportion, unless the members agree otherwise in the plan of domestication.
• No dissolution. Domestication does not involve dissolution of the LLC. Business agreements sometimes have provisions that automatically terminate the contract if one of the parties begins winding up affairs or dissolves. Domestication does not trigger those provisions. An out-of-state LLC that domesticates to Connecticut need not register as a foreign LLC in the current state unless the company will continue doing business in that state.

Moving an LLC Out of Connecticut

Connecticut permits outbound LLC domestication under Conn. Gen. Stat. section 34-641(b). A Connecticut LLC can domesticate to another state’s jurisdiction, provided that the destination state also authorizes the procedure.

Connecticut Outbound Domestication Requirements

A Connecticut LLC that domesticates to another state must approve a written Plan of Domestication and file a Statement of Domestication with the Connecticut Secretary of State’s Business Services Office.

The plan of domestication must include.

• the Connecticut LLC’s name and entity type
• the LLC’s name and jurisdiction of organization after domestication
• the manner of converting the interests in the Connecticut LLC into interests
• securities
• obligations
• rights to acquire interests or securities
• or other property or any combination thereof
• the LLC’s proposed articles of organization or equivalent to be filed in the new state
• the full text of the LLC’s proposed written operating agreement if any after domestication
• other terms and conditions of the domestication
• any other provision required by Connecticut law or the LLC’s governing documents

The outbound filing must comply with Conn. Gen. Stat. section 34-642(a) and include a plan of domestication approved by the LLC’s members or managers. Connecticut does not require a separate certificate of surrender. The Statement of Domestication completes the Connecticut side of the transaction. The destination state will require its own formation and domestication or conversion documents.

Filing Fees for Moving an LLC from Connecticut

The Connecticut Secretary of State’s Business Services Office charges a filing fee of $100.00 for an outbound Statement of Domestication. The destination state will charge separate filing fees for its formation and domestication documents.

Connecticut LLC Laws That Apply After the Move

The Connecticut Uniform Limited Liability Company Act (Conn. Gen. Stat. sections 34-243 through 34-283d) imposes ongoing requirements on all domestic LLCs, including those formed through domestication from another state. An LLC that domesticates to Connecticut becomes subject to these obligations immediately upon effectiveness of the domestication.

Connecticut Annual Report and Compliance Requirements

Connecticut requires domestic LLCs to file an Annual Report with the Connecticut Secretary of State every year between January 1 and March 31. The filing fee is $80.00 per year.

Connecticut LLC Operating Agreement Requirements

Connecticut refers to an LLC’s internal governance document as an “Operating Agreement” under Conn. Gen. Stat. section 34-243a(20). The Operating Agreement governs the LLC’s internal affairs, including the rights and obligations of members and managers, profit distributions, and management structure. The Operating Agreement is not filed with the state; it is maintained by the LLC as a private document.

Connecticut Member and Manager Protections

Connecticut law provides significant protections for LLC members and managers. Connecticut recognizes the charging order as the exclusive remedy for a creditor’s claim against a member’s interest in the LLC, meaning creditors cannot force the sale or liquidation of the LLC.

Connecticut law imposes fiduciary duties on members and managers, including duties of care and loyalty. Members also have protections against dissociation; members cannot be wrongfully expelled without cause, and wrongful dissociation may result in liability to the LLC and other members.

Connecticut requires LLCs to appoint or designate a registered agent with authority to accept service for the company. An LLC’s registered agent must have a place of business in Connecticut. A member or manager who lives in Connecticut can act as registered agent, or the LLC can hire a commercial registered agent for privacy and organizational purposes.

Alternatives to Connecticut LLC Domestication

When domestication is not available because the other state’s law does not authorize it, a merger-based reorganization achieves the same result. The reorganization involves forming a new Connecticut LLC and merging the out-of-state LLC into it, with the Connecticut LLC as the surviving entity. The surviving LLC succeeds to all property, contracts, and obligations of the original LLC by operation of law. For a detailed explanation of how the reorganization process works, see the guide to LLC reorganization.

For a state-by-state comparison of LLC domestication and conversion laws across all states, see the guide to LLC domestication and conversion by state.