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A limited liability company (LLC) is an easy and cost-efficient business structure to get off the ground. As a business owner, it also helps protect your assets. This is why many entrepreneurs consider forming an LLC in Vermont.
The Green Mountain State offers an affordable startup process for ambitious small business owners. If you’re ready to start a Vermont LLC, we’re here to help. We can form your LLC in minutes, starting at just $49 + state fees. Simply click the “Start Your LLC Now” button below to get started. To handle it on your own, keep reading and learn how to create an LLC in Vermont.
To form an LLC in Vermont on your own, follow our guide for a detailed breakdown on how to do it. Creating your LLC in Vermont is a five-step process. First, you need to choose an acceptable business name. Your business’s name must be in line with the state’s business naming requirements. Then you have to select a Vermont registered agent that will accept legal paperwork on behalf of your business.
Then you can file your Vermont LLC Articles of Organization. This application will establish your LLC as a formally recognized business entity in the state. You should also create an operating agreement for your company.
After you file your Articles of Organization, you’ll need to figure out what tax obligations apply to your Vermont LLC. Both state and federal tax requirements need to be considered. As part of this step, you should apply for your federal Employer Identification Number (EIN). This is your company’s unique ID number for all future tax paperwork.
Choosing a name for your LLC in Vermont is an important first step. Pick one that’s easy to remember and fits what your company offers.
Your Vermont LLC’s name must also meet certain legal requirements:
The Vermont Secretary of State has a guide to choose an appropriate name. The SOS recommends not to spend money on marketing materials, like signs or business cards, until your business name has been approved. It may seem obvious, but naming your LLC is an important first step when learning how to create an LLC in Vermont.
If you come up with the perfect LLC name and want to reserve it, apply to the Vermont Secretary of State. The SOS will reserve the name for you for 120 days. The LLC name will be safe while you prepare the other steps to file your Articles of Organization. We have a business name reservation service that can handle it for you. We also check to see if your LLC name is available.
Keep in mind that you can also use a “Doing Business As” name. A Vermont DBA, sometimes called an “assumed business name” or “fictitious name,” is just another name to call your business. Businesses can use a DBA when they want to open a different kind of store or roll out a new product line.
Visit the United States Patent and Trademark Office website to see if your name or logo is federally trademarked. Trademarks can also happen at the state level. To find out if your business name is trademarked or to apply for a trademark, visit the Vermont Secretary of State’s website.
If you’re going to start an LLC in Vermont, the registered business must have a physical address where legal documentation can be delivered. This is where a registered agent comes in. This person will accept any legal documents naming the business. This is important because legal papers, like lawsuits, need to be delivered in person.
According to Vermont law, the registered agent can be an individual that lives in the state, a domestic corporation, or another limited liability company. A foreign corporation or foreign LLC permitted to do business in the state is also allowed.
However, keep in mind that the registered agent must be on hand during standard business hours to accept legal notices. You can’t use a P.O. box address for a Vermont registered agent.
You can be your own registered agent, but many people hire a registered agent service in Vermont. They will be your contact that accepts any legal notices. Some additional benefits of a registered agent service include:
Now you can file the Articles of Organization needed to register your LLC with the Vermont Secretary of State.
To file official government documents like this can intimidate anyone. With our business formation plans, we can file for you to make sure it’s done quickly and correctly the first time. Although we can handle this for you, we’ll show you how the process works below.
Vermont prefers that you file online, but if you prefer to mail your Articles of Organization, you’ll need to submit a form for a physical copy to fill out. You’ll also need to submit a filing fee.
The form requires you to provide:
Ready to file your Vermont Articles of Organization? Follow our step-by-step guide on how to file your Vermont LLC Articles of Organization.
You must also say whether the LLC will be member- or manager-managed in the Articles of Organization. A member-managed model is best if there aren’t many members and the members plan to be actively involved in daily operations. A manager-managed model is better for larger LLCs with many members who might not be available to participate in daily business activities.
You can submit the Vermont LLC Articles of Organization in person, via mail, or online. Hand-delivered or postal submissions must be sent to:
Vermont Secretary of State
128 State Street
Montpelier, VT 05633
They must have a check or money order payable to “VT SOS” and be accompanied by a self-addressed, stamped envelope. Allow seven to 10 business days for processing. The faster option is to apply online. Electronic processing usually takes one business day or less. In this case, you can pay the filing fee by credit card or eCheck. If we file your Articles of Organization, then once approved, your paperwork will be available from your ZenBusiness dashboard. You can keep it and other important paperwork digitally organized.
Once you get your physical paperwork back from the state, you’ll want to keep it in a safe location. Include it with your Vermont LLC operating agreement, member certificates, contracts, compliance checklists, transfer ledger, etc. We offer a customized business kit to keep these important documents organized and looking professional.
Vermont LLCs are not required to submit an operating agreement along with the Articles of Organization. But there are several benefits to having one.
An operating agreement defines LLC members (owners) and their duties and responsibilities. It also lays out the procedures to make changes to the LLC, like bringing in a new member. Have these details set in writing before your business operations begin to decrease the likelihood of conflict.
Additionally, an operating agreement can distinguish the LLC, a business entity, from the members who own it. This offers additional protection for LLC members in case of lawsuits or similar liability claims. Members’ private assets are better safeguarded.
An Employer Identification Number (EIN), also known as a Tax ID Number or Federal Tax Identification Number, is used to identify your business on tax paperwork for the Internal Revenue Service. No two EINs are the same. It’s like a Social Security number, but for a business instead of a person.
Federal law requires you to provide an EIN if you hire employees or have multiple members. Even if you do not plan to hire people, there are advantages of an EIN. If you want to open a business bank account, you will likely need an EIN. You can also use your EIN to register on Vermont’s myVTax portal to file and pay taxes easier.
You can get your Vermont LLC’s EIN through the Internal Revenue Service website, by mail, or by fax. We can also get it for you. Our EIN service is quick and eliminates the hassle.
Once you have an EIN, you’ll be able to open a business bank account. Separate accounts for your business and your personal banking is critical to sort out your finances at tax time, and to keep those personal and business expenses separate. It also helps you avoid commingling funds. This can make your taxes more difficult and be used against you if someone takes you to court to challenge whether you and your LLC are truly separate entities.
We offer a discounted bank account for your LLC in Vermont. This allows unlimited transactions, online banking, a debit card, and more. We offer a banking resolution template if you want to authorize others in your business to use the account.
To better manage your new business’s finances, try the ZenBusiness Money App. It can help you create invoices, receive payments, transfer money, and manage clients all in one place.
The cost of establishing your Vermont LLC is relatively low.
The state fees for forming a Vermont LLC can range from $125 to $145, depending on factors such as whether you choose to reserve your business name. Note that filing fees change over time, so check the Vermont Secretary of State website for the most recent filing fee schedule.
You may need to apply for business licenses or permits, which will incur additional costs. This depends on what type of business you are operating. Businesses that often require additional licenses or permits include food services, plumbing, and construction, among others.
A Vermont LLC offers many advantages. Here’s an overview of how you benefit:
Your Vermont LLC tax obligations vary depending on whether you choose to be taxed as a corporation, multi-member LLC, or single-member LLC. If you choose to pay individual income taxes on the profits you take out of the LLC as a member, you will be subject to Vermont’s personal net income tax rates.
Be aware that all Vermont LLCs must file an annual report with the Vermont Secretary of State Corporations Division. This must be submitted within the last three months of the company’s fiscal year, as designated in your Articles of Organization. You can file online or by mail. There is a filing fee for a Vermont-based LLC.
Your business may also be subject to other types of taxes, depending on how it operates. If you have hired employees, for example, you must pay employer taxes. If your LLC will be selling a physical product, you’ll need to register for a seller’s permit through the Vermont Department of Taxes website; this will allow you to collect sales tax on taxable sales.
This depends on how you file your Articles of Organization with the Secretary of State. If you submit a paper application via mail or in person, expect to wait for seven to 10 business days. Online submissions are usually processed on the same day.
There is no legal requirement to submit an operating agreement when filing your Articles of Organization. Creating an operating agreement is highly advisable, however, as it sets distinct guidelines on who will manage the business and how.
LLCs typically elect the default tax status, which means that owners pay state and federal taxes on income earned from the business as part of their individual taxes. This is unlike most corporations, in which profits are taxed twice, first at the business level and again at the individual shareholder level. Larger LLCs sometimes find it advantageous to file taxes as a corporation. It’s best to consult with a tax professional on what model best suits your needs, however.
A Series LLC consists of multiple LLCs, which operate under the auspices of one larger LLC. Each LLC has its own assets, rights, and obligations. Series LLCs are not currently permitted in Vermont.
You’ll need to make sure your Vermont LLC has all the licenses and permits it’s required to have by law. Unfortunately, because licensing varies by industry and location and can occur on the federal, state, and local levels, there’s no central place to check to see if you have all the business licenses and permits you need. You’ll have to do some research.
If you don’t have the time or inclination to do all this research, or if you just want the peace of mind to know that your business has all the licenses and permits it’s legally required to have, our business license report service can do the work for you.
Before starting the dissolution process, the members of an LLC should vote to dissolve it. For the subsequent steps please refer to our Vermont business dissolution guide.