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LegalZoom is your best resource to start your limited liability company online today. We provide a user-friendly service with hefty customer support to help you create an LLC in three easy steps. Protect your business and personal assets and organize your business with the help of experienced business formation experts.
When you form your Vermont LLC with LegalZoom, we prepare and file your articles of organization with the Corporations Division of the Vermont Secretary of State. We also conduct a name search for your Vermont LLC to assist you in the preparation of your operating agreement and other customized services corresponding to your needs. Once your articles of organization have been successfully filed, your Vermont LLC begins its existence as a legal business entity.
Names
Registering a LLC Name:Choosing a business name is one of the first steps in the process of forming your Vermont Limited Liability Company. The name that you choose:
• Must be distinguishable from (cannot be the same as or deceptively similar to) any other Vermont Limited Liability Company name or other business names used, registered or reserved with the Secretary of State
• Must contain, as the last words of the name, "limited liability company" or "LLC" or "L.L.C." or "limited company" or "LC"or "L.C." The word "limited" may be abbreviated as "Ltd.," and the word company may be abbreviated as "co."
However, an LLC can apply to choose a name that is not distinguishable from the Secretary of State records if either:
• The other entity consents to the use in a writing AND submits an undertaking in form satisfactory to the Secretary of State to change its name to a name that is distinguishable from the applicant's name
• The applicant delivers to the Secretary of State a certified copy of a court judgment giving the applicant the right to use the name
A LLC may also choose a name, including a fictitious name, of another domestic or foreign company already in use within the state if the other entity is organized or authorized to transact business in this state.
Reserving a LLC Name: A LLC may reserve a name by filing an application with the Secretary of State. A LLC name be reserved by a person intending to organize the LLC or a LLC already registered in the state.
A name can be reserved for a 120 day period and can be renewed for 1 additional period of 120 days. A LLC must wait to re-renew after the second renewal period for one calendar year.
A LLC can transfer a name reservation by delivering to the Secretary of State a signed transfer notice specifying the name and address of the transferee.
LegalZoom allows you to choose up to 3 names, in order of preference. We will conduct a name check for your Vermont Limited Liability Company before filing to see which names are available.
How to Register: Once you have chosen an available name, LegalZoom can help you register your name with the state.
Formation Requirements
Articles of Organization: In any Vermont LLC formation process, articles of organization must be delivered to and filed with the Secretary of State. State law requires that certain information be included in your articles of organization during the Vermont LLC formation process. This information must include:
• The company name
• The duration of the LLC (this period may be perpetual or for a set amount of time)
• The street address of the registered office and the name and street address of the registered agent (If you do not have a registered agent, LegalZoom can arrange to be your legal agent – see below for additional details)
• The name and address of each organizer
• A statement that the company will be managed by a manager or managers, if applicable, and the name and address of each initial manager
• A statement as to whether the members of the LLC are to be personally liable for the debts and obligations of the LLC, if applicable.
• The signature of a manager, member, organizer, fiduciary or trustee and the capacity of the signer.
Filing: Your LLC is considered organized once an original and a duplicate copy of the articles of organization are delivered to the Secretary of State with the proper filing fee and the Secretary of State determines that they are in compliance with state requirements. The Secretary of State endorses both copies but retains the signed original and returns the duplicate copy to the LLC or its representative. The document is effective as of the day and time it is filed or if a date and time is indicated the document is effective as of the date and time stated.
Additionally, Vermont LLC formation requires inclusion and/or consideration of the following:
Operating Agreement: Although not required, LLC members may adopt an operating agreement to regulate the affairs of the company, which may also be amended and repealed as allowed by the agreement or applicable law. The articles of organization may contain restrictions or prohibitions on the power of the members to adopt, amend, or repeal an operating agreement. If the operating agreement conflicts with the articles of organization, the operating agreement controls as to managers, members and members' transferees and the articles of organization control as to all other persons.
Membership: A limited liability company must have one or more members. Requirements:
• Minimum Number of Members: One or more
• Eligibility Requirements: A member must be an individual
• Procedure for Membership: The member may acquire an interest in the LLC with the consent of a majority of the members.
Resignation of Membership: A member can resign from a LLC; however, certain prohibitions exist surrounding the ability of a member to resign from the company.
• A member may not resign from a LLC except in accordance with the operating agreement or articles of organization
• A member may not resign from a LLC before a minimum term set for membership set out in the operating agreement or articles of organization
• A LLC may pursue certain remedies for any damages suffered by the LLC as a result of the resignation
Contribution: The contributions of a member to the limited liability company may be in cash, property, promissory notes, services previously rendered, or other obligation to contribute cash, property, or contracts for services to be rendered.
Registered Agent In Vermont
LegalZoom can also provide your business with a Registered agent in Vermont. Every Vermont LLC must always have a registered agent in Vermont – the person or office designated to receive official state correspondence and notice if the company is "served" with a lawsuit.
• Eligibility Requirements: The registered agent may be (1) an individual resident of Vermont, (2) a Vermont corporation or Vermont LLC or (3) an out-of-state corporation or LLC with an office in Vermont authorized to do business there.
Registered Office: The registered office may be a place of its business.
Vermont Secretary of State
Once a Vermont LLC has been created, the Vermont Secretary of State will require certain recurring obligations and duties. The most important of these duties are explained below. For further information, contact the Vermont Secretary of State office.
Continuing Obligations
Records: Each limited liability company shall keep the following records open to inspection at its office:
• Information regarding the status of the business and financial condition of the company
• Information regarding the amount of cash and a statement as to the agreed value of contributions made or to be made by each member and the date upon which each member became a member
• A copy of the federal, state, and local income tax returns, if any, for the last three years
• A current list of the full name and last known business, residence, or mailing address of each member and manager
• A copy of the filed articles of organization and any amendments thereto
• A copy of the operating agreement and any amendments thereto
• A copy of any written powers of attorney under which the operating agreement, articles of organization or amendments have been executed
• Any other information reasonably regarding the affairs of the LLC
Annual report: Each limited liability company shall file an annual report that lists the following information:
• The company name and state where organized
• The address of the registered office and the name of the registered agent
• The address of the principal office
• The names and business addresses of the managers
Dissolution
Acts Triggering Dissolution: A limited liability company is dissolved upon the happening of any one of the following events:
• Events specified in the articles of organization or operating agreement
• Consent by the specific number or percentage of members indicated in the operating agreement
• Event that makes it illegal for the LLC to continue
• When a member leaves the LLC, unless either of the following applies:
o Within 90 days, the remaining members agree to continue the business
o The company continues under a right specified in the operating agreement
• Judicial decree
Taxes
A LLC can offer certain tax advantages over a corporation, including the availability of more deductions. Additionally, a LLC is not required to be a separate tax entity like a corporation; instead it can be a "pass-through entity" so that the LLC owners report business losses or profits on their personal tax returns, like a partnership.
Federal Income Tax: Unless you elect to tax the LLC as a corporation, the IRS treats single-member LLCs as sole proprietorships for tax purposes. This means the LLC itself does not pay taxes and does not have to file a tax return. Unless you elect to tax the limited liability company as a corporation, the IRS treats multi-owned LLCs as partnerships for tax purposes. This means that LLC owners each pay taxes on their lawful share of the profits on their personal income tax returns, not the LLC itself. If you desire, by filing IRS Form 8832, you may elect corporate taxation if you regularly need to keep a substantial amount of profits in your LLC.
State Income Tax: The LLC tax rate for Vermont is variable, based on Vermont taxable net income.
Federal Tax Identification Number: Your LLC may need to obtain a federal tax identification number (also known as an employment identification number/ EIN), which is similar to an individual's social security number. Generally, you will not need a separate EIN number for your LLC as long as you are the sole owner and the LLC has no employees. However, if you are not the sole owner of the LLC or if the LLC has employees, your LLC will need a separate EIN number to open a bank account and for certain tax filing requirements LegalZoom can prepare your Federal Tax ID Application if you have not already done so.
Fees
Filings must be made with the Secretary of State along with the appropriate filing fee. When appropriate a check must accompany the document payable to the State of Vermont, covering all charges for the Secretary of State.
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