Start an LLC in Vermont with these Five Easy Steps
Starting an LLC in Vermont is Easy
To form a Vermont LLC, you will need to file your Articles of Organization with the Vermont Secretary of State, which costs $125. You can apply online, in-person, or by mail. The Articles of Organization is the legal document that officially creates your Vermont Limited Liability Company.
Follow the step-by-step guide below to form your Vermont LLC today and get your business up and running.
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.
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.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
FAQ: Naming a Vermont LLC
What is an LLC?
LLC is short for Limited Liability Company. It is a simple business structure that offers more flexibility than a traditional corporation while providing many of the same benefits. An LLC is one of several business structures, such as a sole proprietorship, partnership, and corporation (C corp and S corp). For more information, read our What is an LLC guide.
Watch our video: What is an LLC?
Do I need to get a DBA or Trade Name for my business?
Most LLCs do not need a DBA. The name of the LLC can serve as your company’s brand name and you can accept checks and other payments under that name as well. However, you may wish to register a DBA if you would like to conduct business under another name.
To learn more about DBAs in your state, read our How to File a DBA guide.
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.
Recommended: ZenBusiness provides the first year of registered agent service free with LLC formation ($39 + State Fees)
FAQ: Nominating a Registered Agent
Can I be my own Registered Agent?
Yes. You or anyone else in your company can serve as the registered agent for your LLC.
Read more about being your own registered agent.
Is a Registered Agent service worth it?
Using a professional registered agent service is an affordable way to manage government filings for your LLC. For most businesses, the advantages of using a professional registered agent service significantly outweigh the annual costs.
For more information, read our article on Vermont registered agents.
STEP 3: File the Vermont LLC Articles of Organization
To register your Vermont LLC, you will need to file the Articles of Organization with the Vermont Secretary of State. This can be done online, by mail, or in-person. Some states refer to the Articles of Organization as the Certificate of Formation or Certificate of Organization.
The Articles of Organization for an LLC (limited liability company) in Vermont is a legal document to officially form your business. You’ll be expected to include the name of your LLC, choose a registered agent, list the services your business will offer, and pay the Vermont LLC fees. After you file the Articles of Organization, we recommend you obtain an Employer Identification Number (EIN) if you plan to hire employees and open a business bank account.
When filing your Articles of Organization, you will need to state whether your Vermont LLC will be member-managed or manager-managed. Before you file, read our member-managed vs manager-managed guide to help you choose the best management structure for your LLC.
File the Articles of Organization
OPTION 1: File Online with the Secretary of State
- OR -
OPTION 2: Request an LLC Articles of Organization form and file by mail or in person.
State Filing Cost: $125, payable to the Secretary of State. (Nonrefundable)
Vermont Secretary of State
128 State Street
Montpelier, VT 05633
If you’re expanding your existing LLC to the State of Vermont, you will need to form a Foreign LLC.
FAQ: Filing Vermont LLC Documents
What is the processing time to form my Vermont LLC?
1 to 2 business days online, 7 to 10 business days by mail.
What is the difference between a domestic Vermont LLC and foreign LLC?
An LLC is referred to as a "domestic LLC" when it conducts business in the state where it was formed. Normally when we refer to an LLC we are actually referring to a domestic LLC. A foreign LLC must be formed when an existing LLC wishes to expand its business to another state.
Read our What Is a Foreign LLC article to learn more.
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.
Recommended: Download a template or create a Free Operating Agreement using our tool.
FAQ: Creating a Vermont LLC Operating Agreement
Do I need to file my operating agreement with the state?
No. The operating agreement is an internal document that you should keep on file for future reference. However, many states do legally require LLCs to have an operating agreement in place.
STEP 5: Get a Vermont LLC EIN
What is an EIN? EIN stands for Employer Identification Number. EINs are a nine-digit number assigned by the Internal Revenue Service (IRS) to help identify businesses for tax purposes. It is essentially a Social Security number for a business.
An EIN is sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN).
Why do I need an EIN? An EIN is required to:
- Open a business bank account
- File and manage Federal and State Taxes
- Hire employees
What if I already have an EIN for my sole proprietorship? The IRS requires that sole proprietorships get a new EIN when converting to an LLC.
Where do I get an EIN? You can get an EIN for free from the IRS. Getting an EIN is an easy process that can be done online or by mail.
FOR INTERNATIONAL EIN APPLICANTS: You do not need a SSN to get an EIN. For more information, read our How to Get an EIN as a Foreign Person guide.
FAQ: Getting a Vermont LLC EIN
How do I get an EIN if I don’t have a Social Security number?
A social security number is not required to get an EIN. You can simply fill out IRS Form SS-4 and leave section 7b blank. Then call the IRS at (267) 941-1099 to complete your application. Learn more about applying as an international applicant.
What tax structure should I choose for my Vermont LLC?
Do I need an EIN for my LLC?
All LLCs with employees, or any LLC with more than one member, must have an EIN. This is required by the IRS.
Learn why we recommend always getting an EIN and how to get one for free in our Do I Need an EIN for an LLC guide.
Have a question? Leave a comment!
Ask us a question, tell us how we're doing, or share your experiences.
Join the conversation in our Comments Section.
Considering Using an LLC Formation Service?
We reviewed and ranked the top 5 LLC formation companies.
Find out which is best LLC service for you.
Protect Your Business & Personal Assets
Business Banking for Personal Asset Protection
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your Vermont LLC is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
You can protect your Vermont LLC with these two steps:
1. Opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Need help finding your EIN for your loan application? Visit our EIN Lookup guide for help.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
2. Getting a business credit card:
- Helps you separate personal and business expenses.
- Builds your company's credit history, which can be useful to raise capital later on.
Recommended: Learn more about the best small business credit cards.
Get Business Insurance
Business insurance helps you manage risks and focus on growing your LLC. The most common types of business insurance are:
- General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
- Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers claims of malpractice and other business errors.
- Workers' Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. In Vermont, businesses with one or more employees, excluding business owners, are required by law to have workers' compensation insurance.
Find out how much it will cost to keep your business protected.Get Your Free Quote Today
Properly Sign Legal Documents
Improperly signing a legal document as yourself and not as a representative of the business can leave you open to personal liability. When signing legal documents on behalf of your Vermont LLC, you could follow this formula to avoid problems:
- Formal name of your business
- Your signature
- Your name
- Your position in the business as its authorized representative
See the image below for an example.
This ensures that you are signing on behalf of your Vermont LLC and not as yourself.
Learn more on how to protect your business & personal assets by reading our article - How to Maintain your LLC Corporate Veil.
Join the Conversation
We are here to guide you through your entrepreneurial journey, and are always looking at your feedback. Share your experiences in our comment box, chat with other entrepreneurs, or simply let us know how we're doing.
Keep Your Company Compliant
Vermont Business Permits & Licenses
Do I need business licenses and permits?
To operate your Vermont LLC, you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
The details of business licenses and permits vary from state to state. Make sure you read carefully. Don't be surprised if there are short classes required as well.
Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.
Find out how to obtain necessary Vermont business licenses and permits for your LLC or have a professional service do it for you:
- Federal: Use the U.S. Small Business Administration (SBA) guide.
- State: Use the Business Section of Vermont's state website.
- Local: Contact your local county clerk and ask about local business licenses and permits.
Recommended: If you are a first-time entrepreneur, consider having a professional service research your business’s licensing requirements. Our friends at Startup Savant have reviewed and ranked the top five license research services.
Vermont LLC Tax Requirements
Depending on the nature of your business, you may be required to register for one or more forms of state 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.
This certificate allows a business to collect sales tax on taxable sales.
Sales tax, also called "Sales and Use Tax," is a tax levied by states, counties, and municipalities on business transactions involving the exchange of certain taxable goods or services.
Read our sales tax guide to find out more.
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.
FAQ: Additional Taxes
What is the Vermont Business Entity Income Tax?
Vermont requires LLCs to file a business entity income tax with the Vermont Department of Taxes.
Federal LLC Tax Requirements
Most LLCs will need to report their income to the IRS each year using:
- Form 1065 Partnership Return (most multi-member LLCs use this form)
- Form 1040 Schedule C (most single-member LLCs use this form)
How you pay yourself as an owner will also affect your federal taxes. Visit our guide to learn more about how to pay yourself from your LLC.
Read our LLC Tax Guide to learn more about federal income taxes for LLCs.
Business Entity Income Tax
Vermont requires LLCs to file a business entity income tax with the Vermont Department of Taxes.
File a Business Entity Income Tax Report with the State of Vermont
OPTION 1: File your Business Entity Tax Online
- OR -
OPTION 2: File your Business Entity Tax by Mail
Vermont Department of Taxes
133 State Street
Montpelier, VT 05633
Due Date: The Business Entity Income Tax Report is due the 15th day of the third month following the close of the tax year.
Late Filings: There is a penalty of 5% per month on unpaid tax.
Discover more on the Vermont Department of Taxes website.
FAQ: Business Entity Income Tax
What is the fee for the Business Entity Income Tax?
For LLCs owned by only Vermont residents, the minimum tax is $250. Out-of-state owners and other owners that file composite returns can follow the instructions listed on the Vermont Department of Taxes website.
File Your Vermont LLC Annual Report
Vermont requires LLCs to file an annual report. This form can be submitted online.
File your Annual Report
File your Annual Report Online
Fee: $35 (Nonrefundable)
Due Date: Annual reports are due within two-and-a-half months of the end of your LLC's fiscal year.
Late Filings: Vermont 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.
Avoid Automatic Dissolution
LLCs may face fines and even automatic dissolution when they miss one or more state filings. When this happens, LLC owners risk loss of limited liability protection. A quality registered agent service can help prevent this outcome by notifying you of upcoming filing deadlines and by submitting reports on your behalf.
Recommended: ZenBusiness offers a reliable registered agent service and excellent customer support.
Get Help Starting a Business in Vermont
We understand that creating an LLC in Vermont and getting your business up and running comes with many challenges. To help you succeed, we compiled the best local resources in every major metro area in Vermont. You can get free assistance in the following areas:
Make Running Your Business Easier
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.
Recommended: Check out our Hiring for your Small Business Guide for resources like sample job descriptions, payroll service reviews, and more.
FAQ: Hiring Employees
What is the minimum wage in Vermont?
The minimum wage in Vermont is $10.96 per hour.
How often do I need to pay employees?
Vermont requires employers to pay employees weekly, but they may also institute biweekly or semi-monthly payment schedules with written permission.
Accounting For Your Vermont LLC
It’s critical to get your books in order, even if you haven’t officially opened for business. A well-managed accounting system will help you:
- Track your business finances, including bills, expenses, and income.
- Simplify your annual tax filings.
You can maintain your accounting in two ways:
- Use a DIY accounting software. This can come with an increased risk of errors especially when starting a new business.
- Hire an accounting service. They can provide comprehensive advice to help optimize your bookkeeping and taxes as well as additional services such as payroll etc.
Recommended: For most small businesses, we recommend using a reputable accounting service. Schedule a free tax consultation for your business now to avoid costly errors in the future.
Interfacing with Clients and Customers
In the day-to-day of running a business, it's hard to be readily available for new clients or customers who want to contact you. For service-based businesses that don’t already have a brick-and-mortar location, a virtual office can solve this problem. You can get a dedicated business mailing address and a business phone number with call-forwarding so that you never need to worry about losing a potential customer.
Recommended: Opus Virtual Office can set up your businesses with a live receptionist and all the perks of a virtual office for a great price of $99/month. Plus, as a visitor of HowToStartanLLC, you can save $200 today.
Women in Business Tools and Resources
If you have a woman-owned business, many resources are available to help you concentrate on your business’s growth:
- Funding - (ie. grants, investors, loans)
- Events - (ie. conferences, meetups)
- Guides - (ie. business formation, personal growth)
- Support - (ie. advice, communities, business strategies)
Our information and tools will provide educational sources, allow you to connect with other women entrepreneurs, and help you manage your business with ease.
TRUiC has created video guides to support and reinforce our on-page guides. These videos help to visualize the ideas and lessons that you need to know to create and run a successful business.
Check out our growing library of small business videos on the TRUiC YouTube channel.
Vermont Foreign LLC
Forming a foreign LLC allows your company to operate as one entity in multiple states. If you have an existing LLC and want to do business in Vermont, you will need to register as a foreign LLC. This can be done online.
Register as a Foreign LLC in Vermont
File a Foreign LLC Online
Fee: $125 (Nonrefundable)
How to Obtain a Certificate of Good Standing
A Certificate of Good Standing verifies that your Vermont LLC was legally formed and has been properly maintained. Several instances where you might need to get one include:
- Seeking funding from banks or other lenders
- Forming your business as a foreign LLC in another state
- Obtaining or renewing specific business licenses or permits
You can order a Vermont LLC Certificate of Good Standing online.
Order a Certificate of Good Standing
Request a Certificate of Good Standing Online
Fee: $25 (Nonrefundable)
Dissolve Your Vermont LLC
If at any point in the future you no longer wish to conduct business with your LLC, it is important to officially dissolve it. Failure to do so in a timely fashion can result in tax liabilities and penalties, or even legal trouble. To dissolve your Vermont LLC, there are two broad steps:
- Close your business tax accounts
- File the Articles of Dissolution
When you are ready to dissolve your LLC, follow the steps in our Vermont LLC Dissolution Guide.
LLC: An LLC is a US business structure that offers the personal liability protection of a corporation with the pass-through taxation of a sole proprietorship or partnership.
DBA: A DBA, or doing business as name, is any name a business operates under that isn't its legal name.
Partnership: A partnership is an informal business structure owned by more than one individual that doesn't provide personal liability protection.