Follow our free guide to form an LLC in Vermont
You will find there are a lot of steps involved in starting an LLC in Vermont. Let our comprehensive guide help make the LLC formation journey easier.
Low Taxes for LLCs LLCs in Vermont do not have to contend with high tax payments — the Business Entity Tax is a flat fee ($250) that is paid annually.
Low Unemployment & Poverty Rate Vermont’s economy may be moving more slowly than other states, but the state’s unemployment rate (3.2%) is almost two percent below the national average. Vermont’s poverty rate is also below the US median — 11.9% versus 14%.
Low Crime Rate Vermont has one of the lowest crime rates in the nation — recent polls show the state in second place below Maine for low crime stats in violent and property crimes.
Among Worst States for Businesses There are a number of factors that have hampered Vermont’s status as a business-friendly state, but the primary reason is the cost of owning a business — recent reports show that the fees and taxes charged to companies in Vermont are 12% above the national average. Additionally, high labor costs and slow economic growth put Vermont at #47 on the list.
High Corporate Taxes Vermont’s 8.50% corporate tax rate is one of the highest in the nation; by comparison, it is only slightly lower than California's 8.84% corporate rate.
Slow Job Growth When judged against the average national statistics, Vermont falls behind in current/future job growth: The state has been stagnant in 2018 with a 0% change in job growth, and it’s 36% prospective rate is lower than the 38% US average.
$125 Filing Fee
$35 Annual Report
$250 Business Entity Tax
The first part of forming an LLC in Vermont centers around that actual set-up of your business without all the stress. Begin the process by following these six simple steps:
Finding a name for your business is the first main step in forming your Vermont LLC. There are government regulations and restrictions concerning business names.
Tip: Use a free business name search tool to ensure your company’s desired name is available.
Business Name Guidelines
The official name of your business must end with: Limited Liability Company, Limited Company, LLC, or L.L.C.
Your business name cannot be intentionally misleading to consumers
The name of your new LLC must not be similar to another organization’s name/trademark
Restrictions
“Lottery” and “Bank” are ineligible for use (any state)
Terms that represent educational or Veterans’ organizations are restricted
Terms related to the Armed Forces or civil servants (police, EMT, fire)
LLC business names associated with government and/or financial entities are not always restricted - it depends on the state. Additional paperwork may be required.
URL Availability Creating an online presence is equally important in the current culture. Check domain name availability through any online web services sites.
LLC owners are actually known as members and managers. While every LLC will have members, but not all LLCs have managers — it the difference depends on the management structure of the business.
LLC Management Structures:
Member-managed: All members participate in operating and making decisions for the LLC
Manager-managed: An appointed manager oversees the daily operations of the LLC and the members are not actively involved.
Vermont LLC Member Guidelines
Required Number of Members There must be at least one member or manager to form an LLC in Vermont.
Member Disclosure Requirements All managers/members of the LLC must be included in the Articles of Organization.
Age Restrictions LLC members in Vermont may be of any age.
Residence Restrictions There are no residency restrictions imposed on LLC members in Vermont.
Having a registered agent is necessary for all LLCs formed in Vermont. Your business must have this position to operate.
What is a registered agent? A registered agent is a person or business who is authorized to accept official government mail and service of process notices for the LLC.
Why do you need a registered agent? Vermont law requires you to appoint a registered agent so that the state government has a consistent contact person for your LLC.
What are the main requirements for a registered agent?
The registered agent must have a physical address — not a P.O. Box
The registered agent must be available during business hours
Who can be a registered agent in Vermont?
A state resident with a physical address in Vermont
An LLC or corporation that is licensed to conduct business in Vermont
Is the registered agent’s contact information publicly accessible? The name and contact information of the LLC’s registered agent is a matter of public record.
Can I be my own registered agent for my business? You are legally allowed to be your own registered agent as long as you have a physical address in Vermont.
Is being my own registered agent discouraged? If you choose to be your own registered agent, then you risk compromising personal information.
Tip: Avoid the hassles and choose Swyft Filings to fill the registered agent needs for small businesses in Vermont. Find more information here.
The most important step in creating your Vermont LLC is filing the Articles of Organization with the Secretary of State.
What is the Articles of Organization? The Articles of Organization is a legally binding document that is filed with the state government to officially and legally form your LLC.
Why do I need the Articles of Organization? The Articles of Organization is part of your Vermont LLC’s foundation; your business is not considered official by the Secretary of State without this document.
What is the cost of filing the Articles of Organization? The filing fee for Vermont is $125.
What information is included in the Articles of Organization?
The name and address of the LLC
The names of the LLC members
The name(s) of the manager/initial members
The liability status of the members
The name and location of the registered agent
The chosen LLC management structure
The duration of the LLC
Professional businesses in Vermont can form a specific type of LLC known as a Professional Limited Liability Company (PLLC).
Example professions that may form PLLCs:
Healthcare
Legal
Financial
Real Estate
A few points to consider:
All members of the PLLC must be licensed in the profession of the business.
The PLLC is only allowed to provide services for which the business was formed.
The members are still subject to whichever licensing boards govern the PLLC’s profession.
Though not generally required, you still need to create an Operating Agreement for your Vermont LLC to help ensure the successful formation of your business.
What is an LLC Operating Agreement? The LLC Operating Agreement is a legally binding document that defines the rights and responsibilities of the members/managers and defines the business’s operating practices.
Why do I need an LLC Operating Agreement? The LLC Operating Agreement is necessary because it provides structure for the business, protects business assets from creditors, and reduces disputes among members.
Do I need to file the LLC Operating Agreement? The Operating Agreement does not need to be filed anywhere; it is for the benefit of your LLC and remains in-house.
What goes into an LLC Operating Agreement? The LLC Operating Agreement will generally include the following information:
List of the members/managers and their roles
Designation of authority in the LLC
Initial capital contributions of the members
Voting designations and percentages of the members
Member transfer/addition rules and restrictions
Distribution of profits
Meeting schedule
Tip: Get a customized LLC Operating Agreement for your small business with Swyft Filings. Add structure to your LLC now.
Almost all businesses in Vermont must register for an EIN. Your Vermont LLC will not be able to conduct business without this ID.
What is an EIN? The EIN is a nine-digit number that is assigned to your business by the Internal Revenue Service (IRS) to identify your business with the government.
What does EIN stand for? EIN is an acronym for Employer Identification Number. It is also known as a Federal Tax ID.
Are all businesses required to have an EIN? Federal law requires certain business entities to register for an EIN:
Businesses with employees
Businesses with more than one member
Partnerships (LLC or C-corp)
Please Note: A sole proprietorship is not required to have an EIN, but it is still recommended.
Why does my LLC business need an EIN? The more common reasons you would need an EIN are:
To hire employees
To open a bank account in the U.S.
To file your company’s taxes
To pay independent contractors
In short, if you make money through your business and it has employees, you must have an EIN.
Is the EIN publicly listed? The EIN for your LLC will be part of public record.
Can I use my Social Security Number as the EIN? You can use your social security number as the EIN, but this information is publicly listed.
Swyft Filings offers EIN services for small businesses in Vermont. Find more information here.
Now that you have officially set up your Vermont LLC, you need to prepare your new business for daily operations. The next few steps are:
LLCs in Vermont are responsible for paying the Business Entity Tax (BET) — the annual fee is $250.
State Income Taxes Vermont’s state income tax rates are listed in the table below:
Corporate Tax Information You can also choose to have your LLC taxed as a corporation; if so, you will be responsible for paying corporate taxes on your business’s earnings
Corporations in Vermont are required to pay two types of taxes:
Corporation Income Tax
Gross Receipts Tax
Corporation Income Tax
Gross Receipts Tax
Additional Tax Information Other taxes your LLC may need to pay:
Sales and Use Tax at 6%
Employee Withholding Tax
Unemployment Tax
The licenses and permits required for an LLC in Vermont can vary, depending on a number of variables:
Location (city and county)
Type of Business
Industry
Tip: If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.
All LLCs formed in Vermont are required to file an annual report with the Secretary of State.
What is an annual report? An annual report is a legal form that is designed to keep your business’s information current and is filed with the Secretary of State.
What kind of information is in the annual report? The information requested in the annual report is similar to what is in the Articles of Organization:
The name and address of the business
The name and address of the registered agent
The business’s EIN
Is the annual report part of public record? The annual report filed on behalf of your LLC is a matter of public record.
Fees and Due Date
Fee: $35 Due Date: Within 3 months after end of fiscal year Frequency: Every year Implications of Late Filings: Dissolution of LLC
Swyft Filings helps you stay compliant by providing stress-free solutions. File your annual report with us today.
The last step in forming your Vermont LLC is to obtain a Certificate of Good Standing.
What is a Certificate of Good Standing? The Certificate of Good Standing confirms your business is legally formed and compliant with all state regulations.
Who issues the Certificate of Good Standing? The Certificate of Good Standing is generally issued by the Secretary of State.
When can I request a Certificate of Good Standing for my business? You will be able to request a Certificate of Good Standing after your LLC is officially formed through the Secretary of State.
Why do I need a Certificate of Good Standing? A Certificate of Good Standing adds credibility to your LLC since some banks, financial institutions, and other businesses may be hesitant to have dealings with a new business.
Additionally, some states require a Certificate of Good Standing before a business can apply for Foreign Qualification.
Does the Certificate of Good Standing have an expiration date? The Certificate of Good Standing does not expire/does not need to be renewed.
Swyft Filings can create a Certificate of Good Standing for your Vermont LLC. Click here for more information.
Every day, business owners from all over the nation rely on Swyft Filings to help them file an LLC online and maintain their company.
Looking for answers? You came to the right place. Read the FAQ or contact our team for more information.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
No matter the business type, Swyft Filings can help you form your new company.
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