Vermont LLC costs: summary
Hard to keep everything straight? We don’t blame you. Here’s a handy table of costs, so make sure to bookmark this page in your browser for future reference.
| Item | Cost |
|---|---|
| State filing fee (Articles of Organization) | $155 |
| LLC name reservation | $25 for 120 days (renewal $25) |
| DBA (trade name) registration | $70 per name |
| DBA reregistration (every 5 years) | $65 |
| Registered agent service (optional) | $50–$300 per year |
| Operating agreement (optional) | $0–$2,500 |
| Annual report | $45 |
| Foreign LLC annual report | $170 |
| Business license (varies by municipality) | Varies by town and industry (for example, Brattleboro’s business license is $100 per year) |
| Articles of Termination | $20 |
You’ve got a killer business idea. Maybe you’ve been working at it for a while. Possibly you even have a few sales under your belt.
Either way, you’re ready to start making real money, but there’s just one problem. You haven’t set up your LLC (limited liability company) yet.
Well, good news: It’s pretty easy to start an LLC in Vermont. All you need is the right know-how, and that begins with the monetary side.
So, just how much does an LLC in Vermont cost?
We’ve got more good news for you: Just as it’s not that difficult to launch your biz, it’s not that expensive either. Granted, the cost can vary depending on how you go about it, but Vermont has straightforward rules that streamline the whole process.
Plus, for a minimal extra fee, you can always use an LLC formation service to minimize your research and get you going faster.
In this article, we’ll go through the basic costs of LLC formation in Vermont, such as various filing fees and annual fees. We’ll also provide a handy table breaking down the costs by category, so you can make sure you’re fiscally ready to make the jump.
Lastly, we’ll give you a rundown of the general logistics, the better to get you organized and ready to take on the market.
General steps and costs when forming a Vermont LLC
First, let’s take a quick look at the steps involved in forming your LLC in Vermont. And seriously, the good news never ends, because there aren’t that many.
While they may seem daunting at first, the following steps are relatively uncomplicated. Just take them one at a time and you’ll be fine.
Naming your Vermont LLC
Before you get into the nitty gritty, you’ve got to pick a name.
As we’ve discussed before, you should spend some time on naming your LLC. This doesn’t cost anything if you name it at the time you file your Articles of Organization (more on that in a second).
However, if you want to reserve your business name ahead of time, you can do so for 120 days for $25. You can renew a reservation for another $25.
Before you commit, make sure your name is:
- Memorable, either dealing directly with your product or service, with your name, or with neither but possessing high brand awareness (think “Zillow”).
- Easy to spell.
- Able to withstand the test of time, e.g. still pertinent to your business in 5 years.
- Available in some form as a domain name for your website (i.e. a URL).
- Available, which you can check by conducting a Vermont business entity search.
In some cases, you might reserve both an LLC name and a Vermont DBA (doing business as) name, sometimes referred to as an assumed name.
The former is your LLC’s legal name. The latter is the name by which your clients and customers will know you, usually having higher brand awareness and expansion potential.
Each DBA costs $70 to register and must be renewed every 5 years ($65).
Filing articles of organization
In Vermont, it costs $155 to file your Articles of Organization with the Secretary of State. This is necessary at the time you form your LLC. Once you submit your articles, you may consider your business officially formed.
After you form your LLC, you’ll file an annual report within 3 months after the end of each fiscal year.
Appointing a registered agent
Every Vermont LLC must have a registered agent with a street and mailing address in Vermont. You can be your own agent if you’re a Vermont resident, or you can hire a registered agent service.
Many business owners choose a registered agent service because they worry about missing important legal and state notices. Registered agent services typically cost $50–$300 per year. Tailor Brands’ registered agent service is $199 per year.
Creating an operating agreement
While purely optional, it’s recommended you create an operating agreement.
Depending on whether you do it yourself, hire a lawyer, or use an operating agreement service such as Tailor Brands, this can range from $0 to $2,500 in Vermont.
Other annual and additional Vermont LLC costs
There are a few other annual or otherwise additional costs of operating an LLC in Vermont. Make yourself aware of them now and you won’t have to pay the price later!
Please note that fees do change along with state legislation. If you want to stay completely up to date, a registered agent can help.
Income tax
The state of Vermont does not charge an annual franchise tax. This is a fee, levied by some states, that is incurred whether or not the business makes a profit in that filing year.
LLCs taxed as partnerships or S corporations file a business entity income tax return and generally pay a minimum tax of $250. A single-member LLC’s profits are usually reported on the owner’s personal Vermont income tax return.
Vermont business returns are due on the same date as the federal return. A federal extension gives you until 30 days after the federal extended due date to file in Vermont, but any tax is still due by the original date.
Business licenses & permits
Licensing and permitting are normal parts of many businesses. Depending on what you do, you may need licenses or permits to:
- Practice in a specific field (e.g. law or tax)
- Inhabit a specific zone or building
- Perform certain activities (e.g. serve food or liquor to customers)
- Post signs
These vary by profession, so make sure to get the correct permits for you and seek expert advice where needed.
Annual report
Your Vermont annual report keeps your LLC’s information current with the state. It confirms or updates your LLC’s office address and registered agent details.
It costs $45 to file your annual report ($170 for a foreign LLC). You file online, and you can choose to print and mail it with a check at the payment step.
Filing your annual report is a critical business activity. If you do not file on time (usually March 31st, assuming your fiscal year ends on December 31st), your LLC’s articles of organization are terminated.
To reinstate, you file the missing reports and pay the $45 report fee plus a $35 reinstatement fee for each year you missed.
Certificate of good standing
A certificate of good standing proves that you are in complete compliance with Vermont law concerning business operations. It also proves that you have the right to do business under your LLC name.
You may find that a certificate of good standing is necessary to apply for loans, open a bank account, get investment funds, or otherwise conduct financial activities in Vermont.
A certificate of good standing (officially a Certificate of Existence) costs $35. Note that if you do not file your annual report on time, you will lose this certificate.
What expenses you can write off
The good news is that some of the LLC formation costs are tax deductible for federal tax purposes.
Many startup and organizational costs, such as state filing fees, can generally be deducted or amortized. Ask a tax professional what applies to your LLC.
You can also generally write off the following.
Self-employment tax preparation expenses
Tax preparation costs for your business, such as software or a tax preparer, are generally deductible.
Accounting fees costs
Paying an accountant is a deductible expense in Vermont. If you feel you need help with the ol’ books, this can help you offset the cost.
Registered agent costs
Likewise, you can deduct paying a registered agent, which makes it more affordable.
Attorney fees
Typically, your legal fees are deductible. They have to be considered ordinary and necessary for the business. No conducting personal biz on the same dime!
Vermont LLC state fees
The following fees are taken from the state’s fee schedule:
| Item | Cost |
|---|---|
| Domestic LLCs | |
| Application for Reserved Name | $25.00 |
| Application to Renew Reserved Name | $25.00 |
| Notice of Assignment of Reserved Name | $20.00 |
| Notice of Withdrawal of Reserved Name | $20.00 |
| Statement of Change | $35.00 |
| Statement of Resignation | $0.00 |
| Service of Process | $35.00 |
| Articles of Organization | $155.00 |
| Articles of Amendment | $35.00 |
| Restated Articles of Organization | $25.00 |
| Articles of Correction | $35.00 |
| Application for Certificate of Existence | $35.00 |
| Annual Report | $45.00 |
| Reinstatement | $35.00 |
| Articles of Termination | $20.00 |
| Statement of Abandonment | $20.00 |
| Statement of Conversion | $20.00 |
| Articles of Merger | $55.00 |
| Articles of Domestication | $20.00 |
| Any other document permitted or required to be filed under 11 V.S.A. chapter 25 | $20.00 |
| Foreign LLCs | |
| Certificate of Authorization (foreign good standing) | $35.00 |
| Annual Report | $170.00 |
| Application for Certificate of Authority | $155.00 |
| Amended Certificate of Authority | $35.00 |
| Certificate of Cancellation | $25.00 |
Conclusion
Vermont LLC formation costs are, as you can see, quite reasonable. The greater concern is making sure you fill out all your paperwork correctly and, in the case of annual reports and renewals, on time.
If you’re not sure that’s your bailiwick, don’t fret. Just hire an expert to help you out. That way, you can make sure you’re always above board, and go back to focusing on what you do best.
FAQ
Your name should be relevant to your business or easily branded. You may either use it for all business activities or only in official capacity. If you choose the latter, you will also need a DBA (doing business as) as your customer-facing name. If you want to reserve a name but aren’t ready to file your Articles of Organization, you can pay $25 to reserve your name for 120 days, and you can renew the reservation.
Assuming you do everything yourself, don’t reserve a name, and use no DBAs, the basic cost of forming an LLC in Vermont is the $155 state filing fee.
It doesn’t take long to form an LLC. Once you have your documents ready, it only takes as long as is needed for Vermont to receive your Articles of Organization paperwork and the $155 fee. Online filings are usually processed in less than 1 business day (7 to 10 business days by mail). If you’d rather not prepare the documents yourself, an LLC formation service can file them for you.
If you plan to have employees, you need an EIN (Employer Identification Number). The IRS will give you an EIN for free.
Your annual report effectively renews your LLC. You must renew all DBAs every 5 years, and you can reregister a DBA no sooner than 60 days before its registration expires.
To dissolve your LLC, file a termination form with the Secretary of State for a cost of $20.