Start a Vermont LLC

To register a business in Vermont, you need to decide what to call it. One of the most important parts of forming an LLC in VT is to choose a name that will describe your business and help you stand out from other businesses like it. Selecting a name is also the first step required to register a business in VT.

Search VT LLC business names

When you start a Vermont LLC, the Secretary of State’s rules say you need to have a unique name. That means you’ll need to search all the other business names in Vermont to make sure the one you picked is different. Our VT business search page can help. The Secretary of State also has a few rules about what needs to go into your business name. Those rules include:

• Including the words “limited liability company,” “LLC,” or some other designation identifying your company as an LLC in the name of your business.
• Using terms that reverse words or change words in other names, like Bennington Public House LLC and Public House of Bennington LLC (some states do not allow this). 

You may want to review Vermont’s naming guidelines, since being well-prepared is the best way to start an LLC in Vermont.

Reserve a name for your business

If you’ve come up with the perfect name but haven’t ironed out the details for filing your Articles of Organization, that’s okay. You probably want to know how to get a Vermont LLC name reserved. Filing online to reserve your chosen LLC Vermont name holds the name for 120 days for a fee. Our business name reservation service can handle it for you. 

Filing for a DBA for your VT LLC

If you have a multi-location business or have plans for multiple locations but want to keep your business entity format simple, you might consider getting a “doing business as” (DBA) name. While a DBA name — sometimes known as a “fictitious name” — is not mandatory to have for your LLC, Vermont business owners can get one quickly if they need one. Our VT DBA service can help you file.

Vermont trademarks

The intellectual property (IP) for your LLC in Vermont is more valuable than you may realize! Federally trademarking your intellectual property can save you lots of headaches and heartache down the road. Checking the United States Patent and Trademark Office (USPTO) website to see whether your business name or logo is federally trademarked can help ensure that your IP is unique and eligible for a trademark. It’s also a good idea to check the Vermont Department of State Business Services Division website to confirm there are no marks similar to yours that have been registered exclusively with the State of Vermont.

Next, to form your LLC in VT, you’ll need to choose a registered agent. A “registered agent” is someone who is authorized to receive legal notices on behalf of your business. This can be either an individual or a company, and Vermont requires that all LLCs have a registered agent. You’ll need to identify them on the VT LLC form you file with the Secretary of State. Your registered agent needs to be a Vermont resident, and they must be qualified to conduct business within the state. They’ll need to be physically located in Vermont — no P.O. boxes are allowed.

Should I be my own registered agent?

In Vermont, you are allowed to serve as your own registered agent. However, it’s not recommended. Business owners don’t want to be served even routine legal paperwork in front of clients or employees. Additionally, your registered agent needs to confirm that they’re always available to receive papers for you during normal business hours. If you’re acting as your own registered agent, running your own business may prevent you from doing that. 

The third step in the process to register a business in VT as an LLC is to file your Articles of Organization with the Secretary of State. We understand that when you go to register a business in VT, it can be intimidating, especially for first-time entrepreneurs. That’s why we offer business formation plans to help you feel confident and get the paperwork done correctly. We can also serve as your LLC Organizer. Organizers aren’t LLC members — they do the heavy lifting and then take a step back so you can run the business!

Information needed for Vermont Articles of Organization

Have the following information on hand before you complete your Articles of Organization:

• Your chosen business name
• The registered agent’s name and contact details
• The LLC’s address
• The type of LLC you’re forming (regular, professional, low-profit) 
• The end of your proposed fiscal year 
• A business description using your NAICS code
• The names of the members of the LLC

Having this information handy can make getting your documents completed and filed a breeze. You can also purchase our Expedited Filing Service for a small fee. While this doesn’t impact how quickly the State of Vermont will process your documents, it helps us prioritize your Vermont LLC.

Store all your LLC documents in one digital dashboard

One of the many perks of working with us to get your documents filed is that if we file your Articles of Organization, we can help keep you organized as well. Once the state approves your LLC, your paperwork will be available from your ZenBusiness dashboard. The ZenBusiness dashboard is a great tool for business owners to keep their Articles of Organization and other important paperwork digitally organized.

Next, you’ll want to create a Vermont operating agreement. This agreement isn’t required by law, nor do you need to file it with the state. However, an Operating Agreement is a governance tool for your small business that spells out how your business will be organized and operated. Having one can make your company very attractive to potential investors, too. Operating Agreements also allow you to set the rules and regulations for your LLC (within reason and in alignment with state laws), so most companies prefer them to relying on one-size-fits-all state corporate laws when resolving internal disputes.

Benefits of Vermont LLC Operating Agreements

The benefits of having an operating agreement in place include:

• Listing out the powers and privileges of each LLC member
• Customizing your business’s rules and procedures to serve your LLC’s interests instead of binding you to boilerplate state rules
• Describing your desired management structure and governance
• Specifying how you are separating your business assets from your personal assets
• Spelling out the procedures to add or remove LLC members
• Creating a clear succession plan for the business, even in single-member LLCs

When you begin drafting your operating agreement, you’ll undoubtedly find additional benefits for your company. You’ll also find more items to include in your governance procedures. Often, LLCs have unique rules to codify so they can run properly. An operating agreement is a terrific place to do that.

What should I include in my LLC operating agreement?

Here are some basic items you may want to include in your LLC’s operating agreement:

• Ownership percentages: Include each owner’s amount, especially if the company is not divided evenly.
• Type of management: In Vermont, an LLC can be managed by its members or a manager — Articles of Organization should specify which it is — but your operating agreement should list some basic rules for how to manage the business.
• Authority to act: Your operating agreement allows you to outline each individual’s responsibilities and authorizations.
• Admitting and removing owners: If you want to admit new members into your LLC or remove members from your rolls, your agreement can lay out the requirements and processes for this. You’ll also want to lay out the procedure for buying out removed members’ interests and repaying them for any remaining debt.
• Dissolution and winding up: Your operating agreement can make closing your business easier by spelling out how you want a wind-up to go. You’ll also need to file Articles of Dissolution with the Secretary of State.

We offer a customizable template to help get you started with drafting your operating agreement. 

Once your VT LLC is formed, you can apply for your Employer Identification Number (EIN). A Federal Employer Identification Number (FEIN) or Federal Tax Identification Number, is a number granted by the Internal Revenue Service (IRS). It’s like a Social Security number for your business. You’ll need an EIN before you can hire employees, apply for a business bank account, and pay taxes. 

It’s possible to file for your LLC’s EIN through the IRS website, by mail, or by fax. But to save you time, we can get it for you. Our EIN Service lets you run your business while we deal with the IRS.

Register for Vermont business and payroll taxes

They say that one of the only things that’s certain in life is taxes, and that’s true with your LLC as well. You’ll need to register your business with the VT Department of Taxes. You can do so online. Once you’re on the website, you can follow the instructions to open an account and register your business. If you hire employees, you’ll need to register for payroll taxes, pay unemployment tax, and provide workers’ compensation insurance for your employees. You’ll be able to pay your taxes through this account as well.

Open a business bank account with your EIN

With your EIN, you’ll be able to open a business bank account. Having separate accounts for your business and your personal banking is not only critical for keeping your day-to-day finances straight, but it will also be a huge help at tax time. It also protects you from liability by preventing you from mixing your business and personal funds.

Manage your VT LLC’s finances and payments

We offer a discounted bank account for your new business. Our online banking system allows for transactions, online banking, a debit card, and more. When you want to authorize others in your business to use the account, we offer a banking resolution template to simplify the process.

For further help managing your new business’s finances, try ZenBusiness Money. Our app can help you create invoices, receive payments, transfer money, and manage clients all in one place.

There’s no central place to check to see every license or permit you might need, so you’ll have to do some research. Depending on factors like your profession, industry, and location, you may require other federal, state, and local business licenses and permits to operate. Our Business License Report Service can do the work for you, saving you precious time and letting you focus on your company.

The fee for starting an LLC in Vermont is $125. Fees can change over time, so confirm with the Vermont Secretary of State. Our fees are an additional cost, depending on which services you select. However, we can save you a ton of time and be a huge help as you form your business. 

LLCs combine the liability protection of a corporation with the tax savings of a sole proprietorship. These features make them very popular with both new and experienced business owners. Some key Vermont LLC benefits include:

• Protection of your personal assets from the liabilities of your business and collections on business debt
• Flexible management and ownership structures tailored to your specific business and industry
• Few maintenance requirements, and only a $45 Vermont annual fee for filing your annual report
• Flexible taxation options to suit your business goals

While you have many different structures to choose from when starting your business, an LLC can provide you with the personal and professional flexibility you need to achieve your personal and professional goals.

LLCs provide the benefit of avoiding “double taxation.” The business pays no federal income tax, instead passing the income straight through to the LLC’s owners. Then, each business owner pays taxes on the earnings as regular income. This is unlike most corporations, in which profits are taxed twice — first at the business level and again at the individual shareholder level.

The IRS administers federal taxes based on each member’s share in the LLC. Members also might be required to pay self-employment tax to the IRS to make up for the fact that they don’t pay employer withholding taxes like those related to Medicare or Social Security from their paychecks. 

The LLC tax structure can save business owners a significant amount of money compared to a traditional C corporation. However, LLCs can elect to be taxed as a C corporation. Talk to your tax professional if you think this might be right for your business.

Some LLCs elect to be taxed as an S corporation. An S corp has more restrictions and greater scrutiny from the IRS, but it can save members a lot in self-employment taxes. It also avoids the double taxation you would have from being taxed as a C corporation. Our S corp service can help you set up an LLC with S corporation status. But before you decide how to have your LLC taxed, we highly recommend consulting a tax professional.

The State of Vermont also taxes businesses. Your LLC business taxes may include:

• State employer taxes (if you have employees)
• State sales tax (if you sell goods)
• State unemployment tax (if you have employees)
• Taxes related to certain products (such as liquor or tobacco)
• Taxes for using certain minerals or other public resources

In addition to the above taxes, you might need to pay taxes based on your city. Check your municipal website for more information. To better understand your state tax burden, visit the VT Department of Taxes website for more information.

When filing online, it takes about 3-7 business days to confirm your filing and form your LLC. If you choose to file by mail, it can take more than two weeks.

No, you don’t need to file your LLC’s operating agreement with the state or any government agency. If someone claiming to be from a government agency demands you file your operating agreement with the state, be sure to call and confirm their identity after independently checking their phone number.

Most entrepreneurs elect pass-through taxation at the state and federal levels. A qualified accountant can explain the benefits and drawbacks of S corp and C corp elections and how they can impact your personal and professional tax burdens.

Vermont state law doesn’t permit the series LLC business structure. A series LLC is one in which several separate LLCs operate under one LLC entity.

If you want to dissolve your business, you’ll need to file the Articles of Dissolution with the Vermont Secretary of State. First, you’ll need to pay off any business debts, sell off assets, and distribute any remaining profits among the members. Your operating agreement can provide a clear roadmap and instructions in the case of dissolution. In the absence of an operating agreement, VT’s LLC laws can help. To learn more, see our page on Vermont business dissolution.

The process for transferring ownership of your Vermont LLC is typically in your Operating Agreement. You’ll likely need a purchase agreement where the previous owner sells their LLC interests to the buyer. Next, the Articles of Organization are amended to reflect the change in ownership. You’ll want to file these amended Articles of Organization with the state.

A “doing business as” name isn’t mandatory in Vermont. However, if you have several business locations or would like to use a DBA, filing a Fictitious Business Name Statement is a straightforward process. You can also use our VT DBA service to file.

Not everyone foresees that members will leave your LLC, or die, or simply disappear when they are first launching a business. Fortunately, your operating agreement will typically detail your LLC’s procedures for removing members from the business. Additionally, you’ll need to follow your agreement’s procedures outlining how the removed member’s share will be distributed.
Finally, you’ll need to file Vermont Articles of Amendment to update your LLC’s Articles of Organization with the state. 

Yes, Vermont requires LLCs to file an annual report. You’ll need to file through the Secretary of State’s online system and pay a $45 fee. 

You don’t need a business plan to form your LLC, but having a business plan can put you ahead of the game. A good plan also contains information on the business’s founders, market research, and potential financing sources. Having a business plan can make your business very attractive to potential investors as you navigate the start-up period.