Connecticut Convertible Promissory Note Overview
A convertible promissory note in Connecticut is a debt instrument commonly used in startup financing that converts into equity upon a triggering event. As a security, it must comply with both federal regulations (SEC Rule 506 under Regulation D) and Connecticut's state securities laws. The primary state exemption is: Section 36b-21 exemption.
Connecticut requires Form D filing required when issuing convertible notes. The state provides enhanced protections for note holders through its securities regulatory framework. The interest rate must comply with Connecticut's 12% usury limit, though most convertible note rates (2-8%) fall well below this threshold. Companies should work with an attorney familiar with Connecticut securities law to ensure full compliance.
Available
Securities exemption
Required
SOS filing
12%
Usury rate
Enhanced
Investor protections
Connecticut Requirements
Connecticut has specific requirements for convertible promissory notes that both parties should understand before entering into the agreement.
- Interest Rate: Must not exceed Connecticut's usury limit of 12%
- Written Agreement: Must be in writing and signed by the borrower (maker)
- Clear Terms: Principal amount, interest rate, payment schedule, and maturity date must be clearly stated
- Default Terms: Late fees, grace periods, and acceleration clause must comply with Connecticut law
- Governing Law: The note should specify Connecticut as the governing jurisdiction
How to Create a Connecticut Convertible Promissory Note
Follow these steps to create a Connecticut-compliant convertible promissory note using our template.
Enter Party Information
Provide the full legal names and Connecticut addresses of both the lender (payee) and borrower (maker). Include the date the note is being executed.
Define Loan Terms
Specify the principal amount, interest rate (within Connecticut's 12% usury limit), payment schedule, and maturity date. Our template calculates the payment breakdown automatically.
Set Default and Late Payment Terms
Define the grace period, late fee amount, acceleration clause triggers, and notice requirements. Our Connecticut template includes compliant default language.
Sign and Execute
The borrower must sign and date the note. Consider notarization for added legal protection. Both parties should retain a copy. If secured by collateral, file the appropriate security instrument with Connecticut's recording office.
Securities Compliance in Connecticut
When issuing convertible promissory notes in Connecticut, you must comply with the state securities exemption (Section 36b-21 exemption), file the required Form D filing required, ensure the interest rate stays within the 12% usury limit, and follow Connecticut's investor protection requirements (enhanced protections). Federal Form D must be filed with the SEC within 15 days of the first sale. Our Connecticut-specific template ensures compliance with both state and federal securities regulations.
Connecticut Usury Warning
Connecticut's usury limit is 12%. Charging interest above this rate can render your promissory note unenforceable and may subject the lender to penalties under Connecticut law. Our template automatically validates your interest rate against Connecticut's current limits.
Connecticut Convertible Promissory Note FAQ
Answers to common questions about convertible promissory notes in Connecticut.
Official Connecticut Resources
Use these official resources to verify Connecticut requirements for your convertible promissory note.
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Create your Connecticut Convertible Promissory Note in under 5 minutes.
Answer a few questions and download a Connecticut-compliant document, ready for the state agency.