Understanding Connecticut Limited Liability Company Act: A Comprehensive Guide

The Connecticut Limited Liability Company Act is a comprehensive law that governs the formation, operation, and dissolution of limited liability companies (LLCs) in the state of Connecticut. The act provides a framework for LLCs to operate in a way that is separate from their owners, known as members, and provides liability protection for the members.

The Connecticut Limited Liability Company Act is found in Title 34A of the Connecticut General Statutes, which is the state's business corporation and business organization law. The act is divided into several chapters, each of which deals with a different aspect of LLCs, including formation, management, ownership, and dissolution.

One of the key features of the Connecticut Limited Liability Company Act is its provision for liability protection. Under the act, the personal assets of the members are generally not at risk in the event of a lawsuit against the LLC. This means that the members' personal property, such as their homes and bank accounts, are protected from creditors of the LLC.

The act also provides for the management of LLCs, which can be managed by either the members or by a separate management team. The management team can be composed of one or more managers, who are responsible for making decisions on behalf of the LLC. The act also provides for the creation of operating agreements, which are contracts between the members that outline the rights and responsibilities of each member.

Another important aspect of the Connecticut Limited Liability Company Act is its provision for taxation. LLCs are pass-through entities, which means that the income of the LLC is only taxed at the individual level, not at the entity level. This can provide significant tax savings for LLCs, especially for those with high levels of income.

The act also provides for the dissolution of LLCs, which can occur voluntarily or involuntarily. When an LLC is dissolved, its assets are distributed to its members, and its liabilities are paid off. The act provides for the procedure for dissolution, including the filing of a certificate of dissolution with the Connecticut Secretary of the State.

In addition to the above, the Connecticut Limited Liability Company Act also provides for the creation of series LLCs, which are a type of LLC that allows for the creation of multiple separate LLCs under a single parent LLC. Series LLCs can provide additional liability protection and tax savings for LLCs.

Overall, the Connecticut Limited Liability Company Act provides a comprehensive framework for the formation, operation, and dissolution of LLCs in the state of Connecticut. It provides liability protection, management options, and tax savings, making it an attractive option for businesses and entrepreneurs in the state.

Key Takeaways:

• The Connecticut Limited Liability Company Act provides liability protection for LLC members.
• The act provides for the management of LLCs, including the creation of operating agreements.
• LLCs are pass-through entities, which can provide significant tax savings.
• The act provides for the dissolution of LLCs, including the distribution of assets and payment of liabilities.
• The act allows for the creation of series LLCs, which can provide additional liability protection and tax savings.

Conclusion:

The Connecticut Limited Liability Company Act is a comprehensive law that governs the formation, operation, and dissolution of LLCs in the state of Connecticut. It provides liability protection, management options, and tax savings, making it an attractive option for businesses and entrepreneurs in the state. By understanding the key provisions of the act, businesses and entrepreneurs can make informed decisions about forming and operating an LLC in Connecticut.