Advantages of Incorporating a Business in Connecticut
Why should you register a new company in Connecticut? There is a reason why Connecticut is the proud home to 342,443 small businesses. The state has a positive business environment and this has been achieved through the implementation of several programs that provide short and long-term benefits to businesses. There are salient advantages of forming an LLC or Corporation in Connecticut and to add to that are state incentives, which are aimed at ensuring business growth and stability. Most of the incentive programs are being administered by the “Department of Economic and Community Development” (DECD).
Business Growth Incentive for New Businesses
As one of the top registered agents in the state, we can help you to register a new business in Connecticut as this will ensure you are able to leverage all types of business gains and state provided incentives and grants. Let’s take a quick look at why Connecticut is considered one of the best places for establishing a business:
Advantage#1: Salient benefits of Corporation or LLC formation
- Limited Liability: The shareholders in a Connecticut C Corporation will enjoy limited liability where the corporation’s debts are concerned.
- Long life: When you register a new business in Connecticut as a Corporation, you will be able to raise additional funds by selling stock.
- Connecticut public benefit corporation: You can also establish your business entity as a Connecticut public benefit corporation, which will enable long-term value creation. Such a corporation will also be able to benefit from several incentives laid out by the state.
- Limited Liability: As an owner of a Connecticut LLC, you will be able to enjoy limited liability protection quite similar to what a corporation enjoys.
- No Minutes of meetings: Unlike a corporation, an LLC startup company in Connecticut will not be required to maintain any minutes of the meetings or resolutions.
- Flexible Profit Distribution: An LLC startup company in Connecticut has the benefit of being able to select different ways of distribution of profits
- Flow through Taxation: When you register a new company in Connecticut as an LLC, it can benefit from the process of flow through taxation, which will ensure there are no double taxations.
Advantage#2: Benefits and Incentives
There are several benefits or incentive programs that you can benefit from if you register a new business in Connecticut. Some of these programs provide tax exemptions to businesses while others make grants and loans readily available to small businesses. Let’s take a quick look at some of the promising and popular benefits:
Enterprise Zone Program
This is a highly beneficial program for small businesses. Special zones known as “Enterprise Zones” have been designated by the Department of Economic and Community Development (DECD) across Connecticut. Some of the towns with enterprise zones include Bridgeport, Norwalk, Hartford, and Meriden among others. If a startup company in Connecticut is situated in one of these enterprise zones then they can benefit from a variety of tax incentives. If you locate your business in an enterprise zone, you can benefit from a 10-year corporate business tax credit and it will be 100% for the first three years and 70% for the next seven years. You will also be able to benefit from low-interest and flexible business loans.
There are several forms of tax exemptions that you can benefit from once you register a new business in Connecticut. Some of the tax exemptions that small and medium sized businesses can benefit from include:
- Corporate Business Tax Exemptions: This type of exemptions is aimed at domestic and foreign corporations.
- Real & Personal Property Tax Exemptions: This type of exemption is aimed at businesses that acquire or install manufacturing machinery and equipment. You can get 100% tax exemption for a period of 5 years on newly installed manufacturing machinery and equipment.
- Sales and Use Tax Exemption: A startup company in Connecticut can benefit from sales and use tax relief available on purchase of tangible personal property.
Apart from these, there are several tax credit programs as well as debt financing and investment capital programs, which businesses can benefit from.
Are there any Disadvantages of Incorporating in Connecticut?
When you register a new company in Connecticut, you can benefit from loans for creating business capital, locate your business in enterprise zones to get special benefits, and if you are a small business then there are plenty of tax incentives to leverage on. There are very few disadvantages and they are almost inconsequential as the benefits and incentives ensure long-term business growth.
Grow your business here in Connecticut!