Start Your LLC in Vermont

Quick facts about forming an Vermont LLC

Filing Fee	$125
Processing Time	1-3 business days online, 1-2 weeks by mail
Annual Report Fee	$35, due each year by March 15
Registered Agent Required	Yes, must have a physical Vermont address
State Franchise Tax	None for LLCs
Business License	No statewide general license, but many industries require state-level or local permits
Managing Authority	Vermont Secretary of State, Corporations Division

How to start an LLC in Vermont in 5 steps

Are you looking to start a business in Vermont? There are many ways to structure your business. Many business owners choose to create limited liability companies (LLCs).

An LLC structure in Vermont provides many benefits, especially regarding the possible protection of personal assets from creditors. Other reasons include management considerations, the impact of regulatory compliance issues, and favorable tax options. 

In this guide we’ll show you exactly how to start an LLC in Vermont, going through state essentials, best practices and tips.

There are five basic steps to establishing an LLC in Vermont:

1. Name your Vermont LLC
2. Choose your registered agent
3. File articles of organization
4. Create an operating agreement 
5. Apply for an EIN

Let’s dive in and understand each step or watch our easy to follow video:

Step 1: Name your Vermont LLC

Vermont state law requires businesses to be named such that they are “distinguishable in the records.” This law means business names must be significantly different from others filed with the Vermont Secretary of State. They cannot cause confusion. To make sure you meet this requirement, you need to start with a Vermont secretary of state business search.

Among the restrictions the state uses to determine if a name fails to be distinguishable in the records are the following: 

• Names that include the same keywords or numbers but in a different order
• Names in which the only difference is the inclusion, omission, or substitution of a keyword or number 
These include one or more words or numbers that are additional or different and words that have the same or similar meaning but use different words. This rule also applies to names in which keywords are homophones (words that sound the same but have different spellings or meanings)

Names are not distinguishable in the record if any of the following superficial alterations apply: 

• The addition, deletion, or substitution of special characters, spaces, or punctuation marks (with the exception of additions, deletions, or substitutions that change the meaning of a word or phrase within the business name)
• Articles, conjunctions, or prepositions such as a, an, and, at, by, for, in, plus, the, to, with, &, @, and + (with an exception for those that make different proper names)
• Prefixes and suffixes
• Identifiers and their abbreviations for business types
• Suffixes designating an internet domain
• Abbreviations, alternate spellings, or contractions
• Homographs (words that are spelled the same but have different meanings, regardless of how they’re pronounced)
• Arabic numbers for Roman numbers or word forms of those numbers
• The addition or omission of the word “Vermont,” the phrase “Green Mountain,” or their abbreviations

In addition to those guidelines, there are additional restrictions on selecting a name for your Vermont LLC related to vulgar language. Specifically, the name cannot include: 

• Discriminatory language that uses words or phrases that would defame, denigrate, or imply a lesser status based on race, color, ancestry, religion, sex, sexual orientation, national origin, place of birth, gender identity, disability, or age
• Indecent language that would use words or phrases in reference to sexual and excretory organs
• Obscene language that would depict patently offensive or threatening words or phrases related to sexual conduct

Other restrictions relate to deceptive language, including those that use: 

• Business entity identifiers such as Company, Co., Limited, or Ltd
• Words or phrases that imply a government affiliation
• A proper name of a person designated as the registrant of that name or who appears in the Secretary of State’s records as a member, partner, shareholder, officer, manager, or director of the business entity

Step 2: Choose a registered agent

A registered agent is an important consideration for any Vermont LLC. Every LLC that registers with the Secretary of State is required by law to have a registered agent. 

A registered agent is used to collect any documents served to the business in a legal filing. 

In order to be a Vermont registered agent, you must have a street and mailing address within the state. A registered agent can be a person, business, or nonprofit organization (not the business itself) that is also registered with the Secretary of State. 

Some people choose to act as their own registered agents. While this is a permissible allowance, it is not recommended. A registered agent must be available at all times during business hours, which would mean no time off, vacations, or work outside the office. 

Most LLCs in Vermont instead choose to use a business that specializes in acting as a registered agent. By using a separate business, you gain several advantages over acting as your own registered agent. A professional agent can also remind you of important compliance deadlines, such as filing your Vermont LLC annual report, so you don’t miss required submissions.

Here are some of the greatest benefits of using an external registered agent. 

Step 3: File articles of organization

Like many states, Vermont requires LLCs to file articles of organization. This process details some of the detailed information about the company, its contact information, and its purpose. 

State fees

As a new business, there are multiple fees you will need to pay. The state of Vermont outlines those fees for LLCs online. 

The Vermont LLC filing fee for the articles of organization is $155 and is just one of many costs you should budget for.

Other common fees for LLCs in Vermont are (not all are mandatory):

• Annual report—$35
• Amendment (foreign LLCs)—$25
• Statement of conversion—$20
• Name reservation—$20
• Merger—$50
• Registered agent or office change—$25

Requirements

Articles of organization must include the following information: 

• The Business name, including an appropriate LLC identifier, such as LLC or PLC
• The Business purpose 
This item is optional. It can include a brief statement of the primary goods and services that are provided under the business name
• The LLCs fiscal year
• Whether the LLC is member-managed or manager-managed
• The names and addresses of managers
• Whether the organizers are personally liable for the LLC’s debts
• The organizer’s addresses
• The principal office, which is the primary location where business is conducted, including the street and mailing address, city or town, state, and ZIP code
• Initial registered agent and office, which indicates the individual or corporation designated to receive any services of process for the company, including the registered agent’s name and office (the physical business location where service of process would be served)—specifically the physical address, city or town, state, and ZIP code, mailing address (if different), and email address
• Duration of the company – This optional field is used only if the company is a term company that will conclude its business by a date provided

How to file

The articles can be filed online at the same site used to register the business. In addition, you can submit the articles online at: 

• Vermont Secretary of State 
• Corporations Division 
• 128 State St. 
• Montpelier, VT 05633 

As with other documents, the state expects filing to take less than one business day and that the process is typically completed in 7–10 business days.

Step 4: Create an operating agreement

A Vermont operating agreement is not required by the state. However, having such a document is a wise thing to do. 

Is an operating agreement a must?

Most states, including Vermont, do not require an operating agreement. However, there are important reasons to have one. It documents how a business will be run, how profits are distributed, and what happens if a member joins or leaves the LLC. An operating agreement can also detail how disputes are resolved and what happens if the business dissolves. 

Here are some of the standard components of an operating agreement: 

• Formation – The agreement can detail how and when the company was formed and organized within the state of Vermont
• Company Name
• Registered Agent or Office
• Term – This section details how long the company will operate. Typically, the term is detailed as lasting until members vote unanimously to dissolve the business, the business becomes unlawful due to an event, or an event occurs that triggers dissolution due to the company’s bylaws
• Continuation (i.e., whether the company will continue under a sole member)
• Members – This section details membership and how members are determined. Single-member LLCs are companies where one person has full control. Multi-member LLCs have multiple members with equal or unequal ownership percentages of the business
• Admission – This section details how new members are added to the business
• Voting – This section establishes how members’ votes will be weighted on decisions regarding the business
• Initial and Additional Contributions – This section identifies how members may contribute property or taxes in exchange for membership in the LLC
• Profits and Losses – An operating agreement determines equity distributions, tax obligations, payments, dividends, and other distributions. In the case of profits or losses, the agreement determines how those funds are distributed or accounted for
• Management – There are two common membership structures for an LLC: In a member-managed LLC, all members are involved in core decisions related to the business. In a manager-managed structure, an appointed manager (or managers) is responsible for key business decisions

Step 5: Apply for an EIN

Every business that runs as an LLC in Vermont, has employees, or files tax returns should have an Employer Identification Number (EIN). The EIN is a requirement of the Internal Revenue Service and is used as part of tax filings and other business filings at the federal and state levels. It’s critical for any business that hires employees, wants to open a bank account, or has to file state taxes. 

Your EIN for your business is analogous to the personal use of your Social Security number. The EIN acts as a unique identifier for much work done at the federal and state level. It’s a way for agencies and others to monitor, track, and document your company and what it does. 

Applying for an EIN is easy. It can be done online via an IRS website or using fax or mail services, based on where you file your federal taxes. 

In addition to registered agent services, we offer EIN number services. We can complete the application for your EIN and ensure it is used correctly on relevant federal and state forms for forming and operating your Vermont LLC. 

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