Connecticut LLC vs Delaware LLC (2026)
Compare Connecticut LLC vs Delaware LLC — filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.
| Factor | Connecticut | Delaware |
|---|---|---|
| Filing Fee | $120 | $90 |
| Processing Time | 5 day(s) | 7 day(s) |
| Annual Report Fee | $80 | $300 |
| Annual Report Due | March 31 | June 1 |
| State Income Tax | Yes | No |
| Anonymous LLC | No | Yes |
| Publication Requirement | No | No |
| Foreign LLC Cost (if forming out-of-state) | N/A — you're in your home state | ~$120 + registered agent ~$150/yr |
Verdict: Connecticut wins for most businesses
For most Connecticut-based small businesses, forming locally in Connecticut is the smarter choice due to lower total costs and simpler compliance. Delaware only makes sense if you need anonymous ownership, have outside investors requiring it, or plan to sell the business to a larger company.
Filing Fees & Formation Costs
Connecticut charges $120 to form an LLC while Delaware only costs $90 initially, making Delaware seem cheaper. However, if you operate in Connecticut but form in Delaware, you must also register as a foreign LLC in Connecticut for another $120. This means Delaware formation actually costs $210 total ($90 + $120 foreign registration) compared to Connecticut's single $120 fee. You'll also need a Delaware registered agent service costing around $150 annually, adding to your ongoing expenses.
Taxes: Connecticut vs Delaware
Connecticut LLCs must pay state income tax on profits, while Delaware has no state income tax for LLCs. However, Delaware charges a $300 annual franchise tax, significantly higher than Connecticut's $80 annual report fee. If you form in Delaware but operate in Connecticut, you'll still owe Connecticut income taxes anyway since that's where you conduct business. The Delaware tax advantage disappears if you're doing business in Connecticut regardless of where you formed.
Privacy & Asset Protection
Delaware allows anonymous LLC ownership by not requiring member names on public filings, while Connecticut requires disclosure of at least one member or manager. Both states offer strong asset protection through charging order protections that limit creditors' ability to seize LLC assets. Delaware's court system is highly regarded for business disputes, but Connecticut courts also handle LLC matters competently. For most small businesses, the privacy difference isn't significant enough to justify the extra costs.
Annual Maintenance Costs
Connecticut LLCs pay just $80 annually for their report due March 31st. Delaware LLCs face a $300 annual franchise tax due June 1st, plus around $150 for a required registered agent service. If you form in Delaware but operate in Connecticut, you'll pay both states' fees — $80 to Connecticut plus $300 to Delaware, totaling $380 annually. This makes Delaware formation nearly five times more expensive for ongoing compliance compared to staying in Connecticut.
When Delaware Actually Makes Sense
Delaware formation makes sense if you need anonymous ownership for privacy reasons, have investors who specifically require Delaware incorporation, or plan to raise significant venture capital funding. Large companies and those preparing for acquisition often prefer Delaware due to its specialized business courts and extensive case law. However, for typical small businesses, consultants, or local service providers operating primarily in Connecticut, the extra costs and complexity of Delaware formation aren't justified by the minimal benefits.