A Vermont professional limited liability company (PLLC) is a business form similar to an LLC. The difference is that a PLLC’s members are professional licensed service providers. It provides a level of protection from liability for its members. PLLCs offer flexible management, are easier to set up than a professional corporation, and its members may receive tax benefits. We’ll walk you through setting one up and a few common questions we get asked.
Who can form a PLLC in Vermont?
In Vermont, licensed professionals form PLLCs. There’s no definitive list of specific professionals that may form a PLLC in Vermont. Professionals can include doctors, dentists, accountants, veterinarians, and lawyers, as well as a range of others who require a license to practice.
There are several benefits for professionals who form a professional limited liability company, including:
What are the steps necessary to form a Vermont PLLC?
There are nine steps on the path to forming a Vermont PLLC:
1. Choose a name
Your PLLC’s name should reflect the professional group it represents. There are a few rules to keep in mind when naming it:
If you have a name you like but aren’t ready to incorporate, you can use our name reservation service to reserve it according to state law and give you more time to start your business. Next, you can check domain names to set your web pages. We can make things easier by helping you acquire a domain name.
2. Select a Vermont registered agent
The state of Vermont requires that PLLCs designate and maintain a registered agent and office to receive legal documents and other notifications. The agent must:
Forward changes in the agent’s address or name to the SOS office.
Our expert staff can help locate a registered agent with its registered agent service.
3. Complete and file Vermont Articles of Organization
The Articles of Organization document is the route to the formation of a PLLC with the Vermont Secretary of State. The document must include:
Articles of Organization can be submitted online, via mail, or hand-delivered.
4. Create a Vermont operating agreement
Although an operating agreement doesn’t have to be filed with the state in Vermont, it’s a valuable document to have on hand. It outlines the rules and policies to guide its membership and avoid confusion and conflict as it moves forward. It articulates the members’ responsibilities as well as those of the managers. The operating agreement describes the process for internal changes and how to dissolve the entity should the members feel it is necessary.
5. Handle tax obligations
A professional LLC in Vermont pays taxes at the federal, state, and local levels. Before it can file taxes, the PLLC will need an Employer Identification Number (EIN). Acquire EINs from the Internal Revenue Service. This is something you can apply for yourself, or we can help with its EIN number service. The number identifies your business and aids in filing state and local taxes.
A Vermont PLLC can choose to file taxes in a number of different manners. The IRS has a great overview of what these are. The PLLC has some flexibility in choosing which IRS designation they want to apply for taxation purposes. It’s wise to consult with a business tax attorney or other tax professional to help iron out the wrinkles.
The company needs to file a Business Entity Income Tax return (BI-471) with the Commissioner of Taxes. If a member receives income from the activities of the PLLC, they must also file a BI-471. The typical minimum tax for filing a BI-471 is $250. The form may be completed and filed online. Businesses are liable for other state taxes, including sales and use tax and meals and rooms tax. A tax professional or tax attorney will make identifying and filing state taxes easier and quicker.
Local taxes vary; check with the county and municipality in which your PLLC is located.
7. Obtain business licenses and permits
It is the PLLC’s responsibility to obtain all licenses and permits applicable to it. There isn’t one place that identifies all licenses and permits needed because they may have federal, state, or local origins. We can sort it all out and provide you with a report on which licenses and permits you need.
In Vermont, there isn’t a general business license. Individual towns and cities may require a license to operate or a permit for specific activities.
The U.S. Small Business Administration can provide information about federal and Vermont state licensing requirements.
8. Acquire insurance for your Vermont PLLC
There are three basic types of insurance most PLLCs will need:
9. Open a business bank account
A bank account that has no direct association with individual members’ accounts is important. It is used to pay employees, cover expenses, and perform the PLLC’s core practices. More than one person in the PLLC can have access to the accounts, and the bank must retain individuals’ signatures on file. These persons can be members, employees, or other authorized individuals.
The filing fee for a Vermont PLLC is $125.
While not required by the state, an attorney is useful. They can assist during the formation of your PLLC. A lawyer will explain complex requirements and help navigate the insurance, tax, and other steps mentioned in this article.
Yes, Vermont has a professional corporation (PC) entity. A PC typically carries strong protections against individual liability and may bring tax benefits, depending on the business.
No. PLLC members must practice within the same profession.
Start Your Professional Limited Liability Company
Start a PLLC in the Following States
Vermont Business Resources
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Ready to Start Your LLC?