Summary
In the 2025 Connecticut legislative session, the General Assembly 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, it amended some key Connecticut statutes of interest to the business community that corporations and other business organizations should note going forward. The 2025 statutory changes were indirect but will still be operationally significant for certain specific areas affecting entity governance and compliance. The affected areas include Connecticut state contracting; anti‑discrimination and set‑aside compliance; and privacy protections and data governance.
In addition, the 2025 statutory changes will be operationally significant for certain Connecticut business brokers looking for clarity as to whether they qualify for an exemption from the 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.
Please read on for summaries of noteworthy laws enacted in 2025 that should be of interest to Connecticut businesses, together with their respective effective dates and compliance mechanics:
- Public Act 25‑168 (Budget Implementer): State Contracting, Set‑Aside/MBE Spending Allocations, and Prevailing Wage Adjustments
PA 25‑168, which is the “budget implementer” passed every two years in Connecticut, changes how Connecticut entities contract with the state or participate in state‑assisted projects. Section 160 exempts Internal Revenue Code (IRC) Section 501(c)(3) not-for-profit entities and Section 501(c)(6) chambers of commerce from prevailing wage requirements for projects receiving at least $1 million in Department of Economic and Community Development (DECD) assistance. The statute also narrows the prevailing wage coverage on DECD‑assisted remediation to only the portion of the contract described in the financial assistance contract between the organization and DECD. Section 161 requires contractors on DECD or renewable‑energy prevailing wage jobs to adjust wage and benefit contributions annually on July 1 to reflect prevailing wage changes.
The act also overhauls portions of the Small and Minority‑Owned Business Set‑Aside framework by replacing a single 25% set‑aside target with new annual spending‑allocation goals for goods and services and for contract‑specific allocation goals for public works based on the percentage of available businesses in the relevant industry and geographical area. The act imposes new withholding and reporting obligations for large contracts (e.g., requiring the awarding agency to withhold 2% of the total contract price monthly for contracts over $1 million until compliance reporting is approved). The implementer also broadens the definition of what contracts are to be considered “public works contracts” by including those with municipalities and quasi‑public agencies. It ties eligibility thresholds to the amount of state funding, while adding new enforcement touchpoints (e.g., treating failure to pay a subcontractor on a timely basis as a discriminatory employment practice subject to investigation by the Connecticut Commission on Human Rights and Opportunities).
Thus, while PA 25‑168 does not alter corporate forms, it materially changes compliance risk and board‑level (or manager-level, for LLCs) oversight for Connecticut entities that bid on or perform state‑assisted work. Affected businesses should expect enhanced compliance reporting, potential withholding on large contracts, and annual mid‑contract wage and benefit contribution resets for prevailing‑wage projects beginning July 1 of each year. This would likely require tighter controls among the entity’s legal, payroll, human resources and project management sectors.
For not-for-profit entities and chambers, the Section 160 exemption can alter bid pricing and risk allocation models. Boards of directors and managers should revisit their contracting playbooks and internal compliance certifications accordingly.
PA 25‑168 became law at the end of the Connecticut legislature’s 2025 regular session, with the prevailing wage adjustment obligation pegged to July 1 each year during covered contracts. Connecticut state agencies will implement the new allocation and withholding mechanics through contracting processes following enactment. Contractors should calendar July 1 as the annual adjustment point for covered projects and implement documentation workflows now.
- Public Act 25‑174 (Bonding Bill): Extends Prevailing Wage to Off‑Site Custom Fabrication for Public Works
PA 25‑174 expands the prevailing wage requirements to “off‑site custom fabrication” for covered public works projects, which are defined to include off‑site fabrication (within Connecticut) of mechanical systems tailored to the specific project, such as plumbing, heating/cooling, pipefitting, ventilation, and exhaust duct systems, but not readily available shelf items.
Fabricators and their parent entities performing project‑specific off‑site builds will now face prevailing wage compliance obligations that have traditionally been associated with on‑site work. Boards of directors, managers and compliance officers should update their subcontractor due diligence, bid pricing, and wage documentation controls to reflect that custom, project‑specific off‑site builds can trigger prevailing wage exposure.
The expansion became effective upon the enactment of PA 25‑174; therefore, entities should assess their contract pipelines immediately and incorporate prevailing wage terms into off‑site fabrication scopes that qualify as project‑specific under the statutory definition.
- Public Act 25‑166: Amendments to the Connecticut Unfair Trade Practices Act (CUTPA)
Several sections of the Connecticut Unfair Trade Practices Act (CUTPA)[1] were updated, effective October 1, 2025, broadening enforcement and remedies that can reach entity conduct in commerce. While these amendments do not alter entity charters or organizational documents, these changes expand the legal risks to which Connecticut entities are exposed across sectors by modifying the statutory framework for unfair trade practices.
Boards of Directors of Connecticut corporations (and their counterparts at other Connecticut business entities, such as LLC managers) should align their compliance programs and internal controls (in their marketing, sales, consumer practices, and vendor management) to CUTPA’s updated provisions and ensure that whistleblowers, investigations, and remedial protocols are calibrated to the heightened risk environment. Audit and risk committees may consider elevating CUTPA to the level of a monitored compliance domain alongside privacy and data security. Entities should complete policy and training updates and document board‑level oversight.
- Senate Bill 1295 (Enacted June 24, 2025): Significant Amendments to the Connecticut Data Privacy Act (CTDPA)
SB 1295 materially expands the scope of the Connecticut Data Privacy Act (CDPA), which is codified in Title 42, consumer protection provisions, and imposes significant additional obligations on those who process consumer data. The amended law lowers and reconfigures the thresholds for the statute’s applicability, so it now covers controllers processing at least 35,000 consumers’ data; controllers processing sensitive data; and those offering personal data for sale.
The amendments remove the entity‑level Gramm-Leach-Bliley Act (GLBA) of 1999 exemption that previously exempted financial institutions, replacing it with a different GLBA-based exemption based on the type of data being handled. The CDPA applies to data subject to Title V of the GLBA, which is primarily “nonpublic personal information” (NPI) obtained by financial institutions about consumers for personal, family, or household purposes. NPI includes personally identifiable financial information, such as application data, account balances, transaction history, and credit report information. The amendments also broaden the definition of “sensitive data” to include additional categories of data (for example, the individual’s disability/treatment status, nonbinary/transgender status, neural data, and certain financial/government ID data). The amendments strengthen access rights, while limiting disclosure of high‑risk identifiers in responses, and expand opt‑out rights for profiling by eliminating the “solely automated” qualifier.
The amendments add requirements for impact assessments for covered profiling and tighten the data minimization and purpose‑limitation rules, including requiring separate consent to authorize the sale of sensitive data. With respect to minors, the CDPA now categorically prohibits targeted advertising or sale of minors’ data (regardless of consent), restricts design features that significantly increase, sustain or extend any minor’s use of such online service, product or feature, and imposes additional profiling and assessment requirements. Upon the effective date, privacy notices must disclose profiling and any use of personal data to train large language models, must be accessible and multilingual, and must provide notice and opportunities to withdraw consent for material retroactive changes.
Although SB 1295 does not amend Titles 33/34, it imposes board‑relevant obligations that directly affect how Connecticut business entities (and foreign entities doing business in Connecticut) handle data, AI, and consumer‑facing operations. Boards should form and allocate oversight to data privacy and AI committees or expand their existing risk charters and approve a revised data‑governance framework. Entities should reassess, in light of the expanded definitions, their sensitive data inventories, their controls and limitations on data collection purposes, and the impact of any profiling. Businesses operating in Connecticut should ensure that their privacy notices and consumer‑rights workflows (access, opt‑outs, appeals) comply with the new disclosures and timing. Cross‑functional alignment across legal, IT/security, product, and HR will be necessary, particularly for minors’ protections and large language model training disclosures.
Most of the CDPA amendments take effect July 1, 2026, with the impact assessment requirements applying to processing activities created or generated on or after August 1, 2026. Governance planning and program workstreams should commence sooner to meet these later‑dated obligations, with board‑level tracking of milestones.
- Key Takeaways for Deal and Governance Counsel
For mergers and acquisitions or venture transactions involving Connecticut entities or assets, practitioners should update their due diligence checklists to: (1) flag state‑assisted project exposure to new prevailing wage and set‑aside allocation mechanics (PA 25‑168; PA 25‑174), and (2) evaluate the target company’s privacy and data‑governance posture under the amended CDPA, particularly if profiling or minors’ data are in scope.
Boards and compliance leaders should treat the 2025 session as a warning to fortify their contracting compliance and data governance, both of which are areas that, while not altering entity charters, are increasingly material to fiduciary oversight and enterprise risk in Connecticut.
Securities Law Amendments and Changes to the Connecticut Uniform Commercial Code
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.
Public Act No. 25-85 amended sections of the Connecticut Uniform Securities Act, Section 36b-6, 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 adopted to create a state exemption to parallel the federal exemption that was added to the Securities Exchange Act of 1934 (the “Exchange Act”), by the Consolidated Appropriations Act of 2023 that 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 for having 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 the assets of the eligible privately held company. The broker-dealer must also reasonably believe that the acquirer(s), directly or indirectly, will be active in the management of the eligible privately held company or the business conducted with the assets of the eligible privately held company. “Control” is implicated through the power to direct management and policies, and with “active management,” 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 advisor in business combinations from a broker’s involvement in trading in investment securities for passive ownership.
The amendment also adds pre-closing disclosure obligations designed to ensure the acquirer’s informed decision-making. 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. This is intended to differentiate transfers that are fundamentally business transfers from securities placement activity. Because the exclusion is based on the activities that business intermediaries are engaged in, intermediaries should be warned 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.
The Commissioner of the Connecticut Department of Banking may censure or impose a bar for the same reasons that existing law allows the Commissioner to deny, suspend, or revoke a registration or restrict or condition securities or investment advisory activities (e.g., certain statutory noncompliance or criminal convictions, subject to certain federal orders, insolvency, or supervision failure). The Commissioner’s expanded authority also covers the registrants’ partners, officers, and directors, and any person who directly or indirectly controls them.
The legislation created a filing requirement for securities offerings made pursuant to Regulation A Tier 2. Regulation A, which was promulgated under the federal Securities Act of 1933, is a federal exemption from securities registration. Under Securities and Exchange Commission (SEC) rules, an offering made pursuant to Tier 2 of Regulation A to “qualified purchasers” is preempted from state review under Section 18(b)(3) of the Securities Act of 1933. However, states retain the authority to impose notice filing requirements and fees for Tier 2 offerings.
The Connecticut legislation added a notice filing and fee requirements for offerings made pursuant to Tier 2 of federal Regulation A. Specifically, an issuer that wishes to rely on the Regulation A, Tier 2 exemption is required to file, within 21 calendar days before the initial sale of the securities in Connecticut: (i) a Regulation A – Tier 2 notice filing form and, if the Commissioner of the Department of Banking (DOB) requests them, copies of all documents filed with the SEC related to the form; (ii) a Consent to Service of Process; and (iii) a $250 filing fee.
Initial filings would be effective for 12 months, after which they are eligible to 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.
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 (the UCC) 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 (NFTs). A new article in the Connecticut UCC was created in 2025 setting 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. New Article 12 coordinates with Article 9 on secured transactions. Article 12 defines the asset class, establishes a “control” standard, sets rules for good-faith acquirers, and provides choice-of-law rules. This is designed to reduce title and priority uncertainty in digital-asset commerce.
A CER is defined as an electronic record “susceptible to control,” but the definition operates by also expressly stating what assets are not CERS. CERs do not include controllable accounts, controllable payment intangibles, deposit accounts, electronic copies of a record evidencing chattel paper, electronic documents of title, electronic money, investment property, or transferable records as defined under certain federal or Connecticut laws. The amendment expressly excludes asset types that are already comprehensively covered elsewhere in the UCC (e.g., investment property, electronic chattel paper, deposit accounts, and most electronic documents). This definition captures assets such as virtual currencies, tokenized instruments, and non-fungible tokens (NFTs) where technical features enable exclusive control. The act revises the earlier rule for control of chattel paper generally to align it with a revised definition of that term.
“Control” is defined as the digital analog to possession. A person has “control” of a CER if she can: (a) derive substantially all benefits from the record, (b) exercise exclusive power to prevent others from enjoying those benefits and to transfer control, and (c) be readily identifiable as the person with those powers (e.g., by name, identifying number, cryptographic key, office, or account number). The framework recognizes real-world mechanics, such as custodial structures, smart contracts, multi-sig arrangements, and clarifies that embedded protocol constraints do not defeat exclusivity.
The act gives a purchaser of a CER, controllable account, or controllable payment intangible all the rights the transferor had or had power to transfer. A purchaser of a CER acquires the transferor’s rights; and a “qualifying purchaser” (one who buys in good faith, for value, with control, and without notice of adverse claims) takes the CER (and, in some cases, the linked payment rights) free of property claims, which enhances negotiability. Those 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 a “controllable payment intangible.” Transfers of control of such a controllable account or controllable payment intangible to a qualifying purchaser can also carry the “take-free” benefits for the embedded payment right.
The addition of CERs as Article 9 collateral can be a boon for secured lenders. CERs remain within existing collateral categories (as they are general intangibles), but Article 12 and revised Article 9 expressly permit a lender to obtain perfection by “control” as an alternative (and often practically superior) method to filing. Before Article 12, most digital assets were considered “general intangibles,” with routine perfection by filing. The revisions authorize and prioritize perfection by “control,” analogous to deposit accounts and investment property. This substantively shifts the priority landscape for secured parties in digital assets. A secured party’s priority generally follows “first to control,” with control besting filing. Much like the control regimes, long established for perfecting security interests in deposit accounts and investment property, controlling a CER can provide the secured lender with a level of certainty over the perfection process. (However, it does not make establishing or valuing the borrower’s (and therefore the lender’s) rights in the collateral any easier.)
The amendments include a unique hierarchy of choice-of-law rules for CERs and their related take-free and perfection and priority issues. The act generally applies the local law of a CER’s jurisdiction to matters covered by the new Article 12, but also allows for another jurisdiction’s law to apply if there is an effective agreement for it to do so for a CER that evidences a controllable account or controllable payment intangible in a matter involving an account debtor’s discharge of an obligation.
If a conflict exists between Article 9’s requirements for secured transactions and those of the new Article 12, Article 9 controls. It is also important to note that a transaction subject to new Article 12 is also subject to any other law that sets a different rule for consumers; a law or regulation regulating rates, charges, agreements and practices for loans, credit sales, or other extensions of credit; and a consumer protection law or regulation.
[1] Title 42, Chapter 735); Connecticut Public Act 25‑166 §§ 5, 6, 44, 45.
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