How to Start an LLC in Vermont

How to Start an LLC in Vermont

by Michael H. Cohen, Esq., September 2014

LLCs in Vermont are affordable and easy to form. And as with other states, the State of Vermont has some unique LLC requirements.

Interested parties must register with the Secretary of State by filing the necessary forms, paying the necessary fees and meeting all naming and formation requirements.

The specifications required of a Vermont LLC are:

Registration. LLCs are required to file Articles of Organization with the Secretary of State. The articles must include the following information:

  • LLC name and principal office address
  • Where the LLC was organized (foreign LLCs must include a certificate of good standing )
  • Business purpose of LLC
  • Registered agent’s name and address
  • When the LLC’s fiscal year ends
  • Duration of term, if applicable (otherwise, it will be designated an “at-will” company)
  • Type of management (member-managed or manager-managed)
  • Whether or not members are liable
  • Whether or not the company is a low-profit LLC, a new type of company called an L3C
  • Organizer’s name, address and signature

All forms must be submitted in duplicate and accompanied by the necessary fees.

Forms and fees. LLC registrants are required to submit Articles of Organization to the Secretary of State, along with the required filing fee.

Timeline. Processing time is usually between three to five business days excluding time for mailing. There are no expedited services available.

Naming requirements. LLC naming requirements can be confusing. However, the easiest way to ensure that your LLC name will be approved is to make it distinguishable from those of other LLCs and to include specific words required of LLCs. You may opt to have a preferred name checked for availability before filing your LLC formation documents.

Formation requirements. To form an LLC, a registrant must first file Articles of Organization with the Secretary of State, along with the filing fee.

An LLC with more than one member is also strongly advised to have a limited liability company operating agreement among its members.

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Starting an LLC in Vermont

Before you begin the registration process for an LLC in Vermont, it’s important to know what an LLC is and whether or not it is a viable business structure for your company, so be certain to read up on the definition and benefits of an LLC .

These steps will guide you through the LLC registration process with the Vermont Secretary of State:

1. Decide on a name for your business. You can choose any name for your LLC as long as it ends with “Limited Liability Company,” “Limited Company” or any variation of its abbreviation—e.g., LLC, L.L.C., LC, L.C. or Ltd. Co.

Names may be reserved for up to 120 days. You must file a name reservation application with the Secretary of State, along with the filing fee. The reserved name may be extended twice and may be transferred.

Prior to filing a name reservation application, you may check the availability of the preferred name on the Secretary of State’s website.

2. Assign an agent for service of process. This is also referred to as the resident agent.

3. Get an Employer Identification Number (EIN) from the IRS. If there are two or more members in your LLC, your company will need to obtain an EIN from the IRS, for tax purposes.

4. Create an operating agreement. Although LLCs in Vermont are not required to have a limited liability company operating agreement, it is wise to have one in place with other members should your LLC have more than one member. The State of Vermont recognizes limited liability company operating agreements as governing documents.

5. Familiarize yourself with the LLC’s continuing legal obligations, specifically annual reports. LLCs in Vermont are required to file annual reports with the Secretary of State. The report is due annually within 2.5 months after the end of the LLC’s fiscal year. Filing is done either online or by mail and must be accompanied by the filing fee.

Filing an LLC and Taxes

Following are the forms and fees that are required when starting an LLC in Vermont:

1. Forms. Those looking to form an LLC in Vermont must file their Articles of Organization with the Secretary of State, along with the required filing fee.

2. Limited liability company operating agreement. Although the LLC operating agreement is not filed with the Secretary of State, it is a good idea to have one in place for LLCs with more than one member. This document should be kept on file by the registered agent.

3. Taxes. LLCs in Vermont are treated as corporations, limited liability partnerships or single-member LLCs and are subject to federal income tax classifications. Depending on the type of taxation you opt to have for your LLC, you will have different federal tax responsibilities.

You should always make sure to acquaint yourself with the state laws regarding taxation. Your LLC may be subject to other taxes depending on the kind of services it offers.

Need help starting an LLC in Vermont? LegalZoom provides LLC formation and filing services, including providing a registered agent in Vermont.

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