If you own real estate properties that you would like to rent out, then forming a limited liability company (LLC) is a smart decision. An LLC offers many benefits to a landlord, including shielding personal assets from business liabilities. Connecticut, like most states, has specific guidelines and rules that landlords must follow when creating a rental property LLC. In this article, we'll explore the steps you need to take to create a rental property LLC in Connecticut.
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Step 1: Naming Your Rental Property LLC
The first step in creating your rental property LLC is to select a name for the company. Connecticut law requires that your LLC’s name include the words “Limited Liability Company” or the abbreviation “L.L.C.” or “LLC” at the end of the name. Your LLC's name cannot be the same or similar to another LLC or corporate name registered in Connecticut.
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Step 2: Selecting a Registered Agent
Connecticut requires that all LLCs have a Registered Agent to receive important legal documents, mail and notices on behalf of their LLC. You must designate a natural person who is a Connecticut resident, a foreigner with an active office and agent in Connecticut or another active Connecticut corporation for example, an attorney. Registered agent services provide several benefits likeregistering all their business and personal activities with the CT Secretary of State.
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Step 3: Filing Your Articles of Organization
The next step is to file the Articles of Organization with the Connecticut Secretary of State's office. This document includes the name of the LLC, address, directors/officers/members’ information and whether the business will be managed by its members or by a manager. Every Connecticut LLC must include the following provisions in its Articles.
- The purpose of the LLC:
- The LLC’s registered agent:
- The office address of the LLC:
- How your LLC will be managed:
Once you have completed and signed your LLC's Articles of Organization, you must submit them online or by mail to the state authorities and pay a nonrefundable fee. The turnaround time is five business days for online submissions and five business days for mail submissions.
Step 4: Entities’ Documents
Non-US citizens without a Social Security number will need to attach additional complete Entity-to-Entity Data Collection Form.
Upon completion of process, those of operating their LLC jointly with others will have to create an Operating Agreement for their LLC. Before doing so itis wise to consult with a legal professional with state-specific experience in contract and rent laws.
Step 5: Post-Organization Requirements
After the approval of a rental property LLC in Connecticut, get a Federal Employer Identification Number (EIN) and an LLC operating agreement, a legal and necessary action. The EIN is used to give your LLC an identity with the federal government is essentially the federal tax ID number for the business entity and is used for documents like W-9 forms.
The LLC’s registered agent is required to keep ten years’ worth of associated company records on top of being in constant operations with the CT State in order to track ownership and relevant amendments(forms) included, but not limited to; Change of agents, Name Amendments and Foreign LLC registration.
Doing initial business in Connecticut with your newly Integrated Business , obtaining a state tax IDs for excise tax or sales use tax and other steps to obtain a certificate to document the start and operations of a business unit add to eventual success.
Conclusion
Creating a rental property LLC in Connecticut is not a simple process. However, following the steps we've outlined, it should prove a simple and successful process if an appropriate path is chosen and a plan is created, those using property management software canto smooth implementation; resulting in separation of personal and business affairs, help individuals protect themselves against liability, minimize taxes, shield assets, and means of generating profit. With state authorities on your side, it can be well worth it.
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