How to Start an LLC in Vermont

Step 1: Name Your Vermont LLC

Choosing a company name is the first and most important step in forming your Vermont LLC. Be sure to choose a name that complies with Vermont naming requirements and is easily searchable by potential business clients.

1. Follow the naming guidelines:

• Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
• Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
• Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.

For a complete list of naming rules in Vermont, you can read the Business Naming Rules guidelines.

2. Is the name available in Vermont? Make sure the name you want isn't already taken by doing a Vermont LLC search on the Vermont Secretary of State website.

To learn more about searching for a Vermont LLC name, read our full guide.

3. Is the URL available? We recommend that you check to see if your business name is available as a web domain. Even if you don't plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.

Once you have verified your name is available, you may now select a professional service to complete the LLC formation process for you.

We reviewed and ranked the best LLC services. Find out which is best for you.

Step 2: Choose a Registered Agent in Vermont

You are required to appoint a Vermont registered agent for your LLC.

What is a registered agent? A registered agent is an individual or business entity responsible for receiving important tax forms, legal documents, notice of lawsuits, and official government correspondence on behalf of your business. Think of your registered agent as your business's point of contact with the state.

Who can be a registered agent? A registered agent must be a full-time resident of Vermont or a corporation, such as a registered agent service, authorized to conduct business in the state of Vermont. You may elect an individual within the company including yourself.

Step 3: File the Vermont LLC Articles of Organization

To register your Vermont LLC, you'll need to file Form LLC-1(D): Articles of Organization with the Vermont Secretary of State. This can be done online, by mail, or in person.

Now is a good time to determine whether your LLC will be member-managed vs. manager-managed.

For help with completing the form, visit our Vermont Articles of Organization guide.

If you’re expanding your existing LLC to the state of Vermont, you will need to form a foreign LLC.

Step 4: Create a Vermont LLC Operating Agreement

An operating agreement is not required for an LLC in Vermont, but it's a good practice to have one.

What is an operating agreement? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

Why are operating agreements important? A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.

For more information on operating agreements, read our Vermont LLC operating agreement guide.

Step 5: Get a Vermont LLC EIN

You can get an Employer Identification Number (EIN) from the IRS for free. It is used to identify a business entity and keep track of a business’s tax reporting. It is essentially a Social Security number (SSN) for the company.

Why do I need an EIN? An EIN number is required for the following:

• To open a business bank account for the company
• For federal and state tax purposes
• To hire employees for the company

Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.

FOR INTERNATIONAL APPLICANTS: You do not need an SSN to get an EIN. Learn more here.

Step 6: File the Annual Report

Vermont requires LLCs to file an annual report online within 2.5 months of the end of their fiscal year. The report fee is $35.

The Secretary of State charges a $25 reinstatement fee for reports submitted after the filing deadline. In addition, Vermont can revoke an LLC’s registration for failure to file an annual report.

Step 7: Keep Your Company Compliant

Vermont Business Licenses & Permits

To operate your LLC, you must comply with federal, state, and local government regulations. Fees and requirements for licenses and permits will vary depending on what sort of business license you need.

Find out how to get the necessary business licenses and permits for your LLC with our Vermont Business License guide.

Vermont LLC Tax Filing Requirements

In order to keep your business in good standing, it's important to stay up to date on your Vermont LLC taxes.

Depending on the nature of your business, you may be required to register for one or more forms of tax.

Sales Tax

If you are selling a physical product, you’ll typically need to register for a seller's permit online through the Vermont Department of Taxes website.

Vermont's sales and use tax rate is 6%. Local jurisdictions can choose to add an additional 1% sales tax.

Employer Taxes

If you have employees in Vermont, you will need to register for Unemployment Insurance Tax through the Vermont Department of Labor. You will also need to sign up for Employee Withholding Tax online through the Vermont Department of Taxes.

Business Entity Income Tax

Vermont requires LLCs to file a business entity income tax return with the Vermont Department of Taxes. The typical minimum tax is $250, but ultimately varies.

Individual Income Tax

State
Vermont's individual income tax ranges from 3.35% to 8.75%. Your bracket will depend on your LLC's income. 

State tax returns are due each year by April 18. To calculate your tax or determine your tax bracket, visit the Vermont Department of Taxes website. 

Federal
You’ll also need to report your federal income tax using either Form 1065 (multi-member LLC) or Form 1040 Schedule C (single-member LLC).

Hiring Employees

If you plan to hire employees for your business, stay compliant with the law by following these steps:

• Verify that new employees are able to work in the US
• Report employees as "new hires" to the state
• Provide workers' compensation insurance for employees
• Withhold employee taxes
• Print workplace compliance posters and place them in visible areas of your workspace

Find more information at the Vermont Department of Labor. 

Common Questions About Vermont LLCs

Vermont Business Resources

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State of Vermont Quick Links

• Vermont Secretary of State Corporations
• Vermont LLC Statutes