What Connecticut Businesses Need to Know About 2025 Legislative Changes

By Nancy A. D. Hancock | CSC, Pullman & Comley

Analysis of Selected 2025 Changes in Connecticut Law Governing Business Entities

Connecticut did not enact a 2025 public act that directly amended the core entity statutes in Connecticut General Statutes Titles 33 and 34, which govern corporations, limited liability companies (LLCs), limited partnerships (LPs), limited liability partnerships (LLPs) and statutory trusts.

However, the 2025 legislative session of the Connecticut General Assembly amended certain key Connecticut statutes of interest to the business community that corporations and other business organizations should consider as they begin the new year. The 2025 statutory changes will be operationally significant for certain Connecticut business brokers seeking clarity regarding the availability to them of an exemption from portions of the Connecticut Uniform Securities Act applicable to broker-dealers. The Connecticut Uniform Commercial Code has also seen changes that will affect borrowers and lenders perfecting security interests in Connecticut.

Read on for summaries of noteworthy laws enacted in 2025 that should be of interest to Connecticut businesses, together with their effective dates and compliance mechanics.

Connecticut Securities Law Amendments

Public Act No. 25-85 Amendments to the Connecticut Uniform Securities Act

Public Act No. 25-85, titled “An Act Concerning the Connecticut Uniform Securities Act” (House Bill 6875), was signed into law on June 23, 2025, and became effective upon passage.

§ 36b-6 Amended
Public Act No. 25-85 amended Section 36b-6 of the Connecticut Uniform Securities Act to add an exemption from the broker-dealer registration requirements under Sections 36b-2 through 36b-34, inclusive, of the act for certain intermediaries who are involved in mergers and acquisitions of “eligible privately held companies.” The amendment creates an exclusion tailored to “merger and acquisition broker-dealers” who facilitate changes of control in certain qualifying private companies. Both terms are defined in new replacement Section 36b-6(f).

This new Connecticut law exempts from the Connecticut broker-dealer registration requirements those who limit their activities to specified types of small private company merger and acquisition (M&A) transactions. The new exemption was created to parallel the federal exemption added to the Securities Exchange Act of 1934 (the “Exchange Act”) by the Consolidated Appropriations Act of 2023, which took effect on March 29, 2023.

Section 36b-6 governs the registration of broker-dealers, agents, investment advisers and investment adviser agents under Connecticut law. Before this 2025 amendment came into effect, intermediaries who limited their investment banking and broker-dealer activities to facilitating the purchase and sale of privately held operating businesses often faced the potential requirement to register with the Banking Commissioner as brokers if the transaction involved securities. Recent federal developments recognized a limited exclusion for “merger and acquisition brokers” who limit their business activities in securities to participating in transfers of ownership of privately held companies under defined conditions.
Connecticut’s 2025 amendment aligns state law with this federal statute by establishing a state-level exclusion from broker-dealer registration for qualifying M&A transactions, while preserving investor protection through scope limits and disclosure-based safeguards.

The amendment introduces an express exclusion from broker-dealer registration for M&A broker-dealers whose activities are confined to securities transactions incident to the transfer of ownership of an “eligible privately held company.” The statute defines an eligible privately held company by reference to its non-reporting status under the Exchange Act and by placing size constraints keyed to the company’s most recently completed fiscal year.

Specifically, the company must not have securities registered, or required to be registered, under Exchange Act Section 12 and must not be required to file periodic reports under Exchange Act Section 15(d). In addition, the company must meet at least one of two financial thresholds: the company’s EBITDA must be less than $25 million or its gross revenues must be less than $250 million in the fiscal year immediately preceding the broker’s engagement.

A second requirement is that the broker-dealer must reasonably believe that, when the transaction is consummated, any person acquiring securities or assets of the eligible privately held company, acting alone or in concert with others, will control the eligible privately held company or the business conducted with its assets. The broker-dealer must also reasonably believe that the acquirer or acquirers, directly or indirectly, will be active in the management of the eligible privately held company or the business conducted with its assets.

“Control” is implicated through the power to direct management and policies, and “active management” is defined with a non-exclusive list of examples, including electing or serving as executive officers, approving budgets or otherwise exercising managerial oversight. These elements are required to differentiate the excluded M&A adviser in business combinations from a broker’s involvement in trading investment securities for passive ownership.

The amendment also adds pre-closing disclosure obligations designed to ensure informed decision-making by the acquirer. Before consummating the acquisition, the acquirer must have reasonable access to the target’s most recent fiscal year-end financial statements, a balance sheet dated within 120 days of the exchange offer or sale and material information regarding management, business operations and loss contingencies.

The amendment clarifies that qualifying deal brokers for smaller, non-reporting companies can proceed without state broker-dealer registration when the statutory conditions are satisfied. Because the exclusion is based on the activities in which business intermediaries engage, intermediaries should be aware that if they stray beyond the permitted scope, such as by engaging in general solicitation for passive investors, taking custody of customer funds or securities or arranging financing in a manner inconsistent with the statute’s boundaries, they risk losing the protection of the exclusion.

§ 36b-15 Amended

The Commissioner of the Connecticut Department of Banking may censure or impose a bar for the same reasons existing law allows the Commissioner to deny, suspend or revoke a registration or restrict or condition securities or investment advisory activities, such as statutory noncompliance, certain criminal convictions, federal orders, insolvency or supervision failure. The Commissioner’s expanded authority also covers registrants’ partners, officers and directors and any person who directly or indirectly controls them.

§ 36b-31 Amended

The legislation created a filing requirement for securities offerings made pursuant to Regulation A Tier 2. Regulation A, promulgated under the federal Securities Act of 1933, provides a federal exemption from securities registration. Under Securities and Exchange Commission rules, offerings made pursuant to Tier 2 of Regulation A to “qualified purchasers” are preempted from state review under Section 18(b)(3) of the Securities Act of 1933. However, states retain authority to impose notice filing requirements and fees for Tier 2 offerings.

The Connecticut legislation added notice filing and fee requirements for offerings made pursuant to Tier 2 of federal Regulation A. An issuer that wishes to rely on the Regulation A Tier 2 exemption must file, within 21 calendar days before the initial sale of the securities in Connecticut:

• A Regulation A – Tier 2 notice filing form and, if requested by the Commissioner of the Department of Banking, copies of all documents filed with the SEC related to the form
• A Consent to Service of Process
• A $250 filing fee

Initial filings are effective for 12 months and may be renewed. For each additional 12-month period that continues the same offering, the issuer may renew its notice by filing a renewal notice filing form and paying a $250 renewal fee by the notice filing expiration date.

Connecticut Uniform Commercial Code

Public Act No. 145, §§ 86–101 Adding Amendments to the Connecticut Uniform Commercial Code

Connecticut’s 2025 adoption of new Article 12 to the Uniform Commercial Code aligns Connecticut law with the 2022 UCC amendments that modernize commercial rules for digital assets and related payment rights. “Controllable electronic records” are digital assets, including cryptocurrency and nonfungible tokens. A new article in the Connecticut UCC was created in 2025 establishing rules for transactions involving these assets related to negotiability, transfer and payment rights and secured lending.

New Article 12 articulates a comprehensive framework for transactions in a class of digital assets called “controllable electronic records” (CERs) and for certain payment rights tethered to such records. Article 12 coordinates with Article 9 on secured transactions. It defines the asset class, establishes a control standard, sets rules for good-faith acquirers and provides choice-of-law rules intended to reduce title and priority uncertainty in digital asset commerce.

A CER is defined as an electronic record susceptible to control. The definition also expressly states what assets are not CERs. CERs do not include controllable accounts, controllable payment intangibles, deposit accounts, electronic copies of records evidencing chattel paper, electronic documents of title, electronic money, investment property or transferable records as defined under certain federal or Connecticut laws. The amendment excludes asset types already comprehensively covered elsewhere in the UCC.

This definition captures assets such as virtual currencies, tokenized instruments and nonfungible tokens where technical features enable exclusive control. The act also revises the rule for control of chattel paper to align with a revised definition of that term.

“Control” is defined as the digital analog to possession. A person has control of a CER if the person can derive substantially all benefits from the record, exercise exclusive power to prevent others from enjoying those benefits and to transfer control and be readily identifiable as the person with those powers, such as by name, identifying number, cryptographic key, office or account number. The framework recognizes custodial structures, smart contracts and multi-signature arrangements and clarifies that embedded protocol constraints do not defeat exclusivity.

The act provides that a purchaser of a CER, controllable account or controllable payment intangible acquires all rights that the transferor had or had the power to transfer. A qualifying purchaser, meaning one who buys in good faith, for value, with control and without notice of adverse claims, takes the CER and, in some cases, linked payment rights free of property claims. Persons who acquire a CER unlawfully or in bad faith are excluded from this take-free treatment.

If an account or payment intangible is evidenced by a CER and the account debtor agrees to pay the person in control, the right becomes a controllable account or controllable payment intangible. Transfers of control of such a right to a qualifying purchaser may also carry take-free benefits for the embedded payment right.

The addition of CERs as Article 9 collateral may benefit secured lenders. CERs remain within existing collateral categories as general intangibles, but Article 12 and revised Article 9 expressly permit a lender to obtain perfection by control as an alternative, and often superior, method to filing. Before Article 12, most digital assets were considered general intangibles perfected by filing. The revisions authorize and prioritize perfection by control, similar to deposit accounts and investment property. A secured party’s priority generally follows first to control, with control prevailing over filing.

The amendments include a hierarchy of choice-of-law rules for CERs and related take-free, perfection and priority issues. The act generally applies the local law of a CER’s jurisdiction to matters covered by Article 12 but allows another jurisdiction’s law to apply if there is an effective agreement for a CER that evidences a controllable account or controllable payment intangible in matters involving an account debtor’s discharge of an obligation.

If a conflict exists between Article 9 and Article 12, Article 9 controls. A transaction subject to Article 12 is also subject to any other law that sets a different rule for consumers, laws regulating rates, charges, agreements and practices for loans, credit sales or other extensions of credit and consumer protection laws or regulations.

For more information on how these legislative updates may affect your organization, check out CSC publications on the LexisNexis Store.

This title, along with many others, is available on the LexisNexis Digital Library.