How to Start an LLC in Vermont
A Vermont LLC (limited liability company) is a type of business entity that provides limited liability protection, certain tax benefits, and a flexible management structure. To form an LLC in Vermont, you must file Articles of Organization with the Vermont Secretary of State, Corporations Division and pay the $125 filing fee. But first, you must choose a name and registered agent for your LLC. Once the state receives your Articles of Organization, they will approve your LLC within 1 to 10 days, depending on how you choose to file. We’ll guide you through the process of starting your LLC and getting it ready for business.
Ready to Start an LLC in Vermont?Get Started
Name Your LLC
Designate a Registered Agent
Submit LLC Articles of Organization
Write an LLC Operating Agreement
Get an EIN
Open a Bank Account
Fund the LLC
File reports + taxes
1. Name Your LLC
The first step you’ll need to take is choosing a name for your LLC. Vermont’s rules for naming your LLC are listed in 11 V.S.A. § 4005. Here’s the gist. Your LLC’s name must:
- Include an indicator such as “limited liability company,” “L.L.C.,” or “LLC.”
- Not include words or abbreviations like “corp” or “incorporated” or “limited partnership”—anything suggesting your LLC is a different type of entity.
- Be unique among businesses in Vermont.
Already have a business name? Check to see if it’s available.
Can I reserve a business name in Vermont?
Yes. If you’re waiting to start your LLC, you can reserve your company name for up to 120 days by filing a VT Business Name Reservation online and paying the $20 filing fee.
What’s the difference between my LLC’s name and an assumed business name?
The legal name of your LLC is the one listed on your Articles of Organization. An assumed business name (or doing business as name) is any name your LLC conducts business under that’s not your LLC’s legal name. Vermont doesn’t require LLCs to register an assumed business name. However, you may opt to register the name by filing an Assumed Business Name Registration form. You can file online or contact the Vermont Secretary of State to request a paper form. The filing fee is $50.
Thinking about using an assumed business name? See our guide on How to Get a DBA.
2. Designate a Registered Agent
Next, you’ll need to choose a Vermont registered agent—an individual or business that accepts legal and state documents on behalf of your LLC. Vermont requires all LLCs to have a registered agent. In addition, you’ll need to have your registered agent’s name and address before filing your Articles of Organization.
Learn why the pros use a registered agent service.
What does a registered agent do?
Requirements for a registered agent in Vermont are listed in 11 V.S.A. § 4007. At a minimum, your registered agent must:
- Have a physical address in Vermont. PO boxes are not allowed.
- Keep regular business hours.
- Accept legal mail and state documents on behalf of your LLC and get them to you quickly.
Can you be your own registered agent in Vermont?
Yes. However, acting as your own registered agent requires listing your name and address on the Articles of Organization. You’ll also be required to maintain regular business hours so you can accept important mail in person.
Can I change my registered agent after I start an LLC?
Yes. You can change your registered agent in Vermont by filing a Change of Registered Agent form with the Secretary of State, Corporations Division. There is a $25 filing fee.
3. Submit LLC Articles of Organization
You’ll need to file Articles of Organization with the Secretary of State, Corporations Division, and pay the $125 filing fee to form your LLC. You can submit this form online, by mail, or in person. If you file a paper form, you must also include a self-addressed envelope so the state can send you your entity’s approval notice. The state will process online filings within one day of receipt. Mail and in-person submissions will be processed within 7-10 days of being received.
Note: All of the information on this form will become part of the public record.
To complete the form, you’ll need to provide the following information:
- Company name. Include an indicator like “LLC.”
- LLC type. Check the box to choose your LLC type—professional LLC, L3C, blockchain-based LLC, or just a traditional LLC. Tip: most people select LLC.
- Fiscal year end. The month your fiscal year ends. For businesses operating on a normal calendar year, this is December.
- Business description. Briefly describe your business activity or provide a NAICS (North American Industry Classification System) code—a five digit number used to identify the type of services your business provides.
- Principal address. This must be a physical Vermont address, not a PO box.
- Mailing address. You may use a PO box.
- Business email. Include an email address for your LLC.
- Registered agent name. This is the person or business that accepts legal and state mail on behalf of your LLC.
- Registered agent business address. This must be a physical Vermont address—not a PO box.
- Registered agent mailing address. This can be a PO box.
- Registered agent email. Enter your registered agent’s email address.
- LLC management (optional): you may indicate whether your LLC will be manager-managed or member-managed. If you choose to indicate a specific management type in your Articles of Organization, then your operating agreement must align with that structure, and any change to the management structure would require an amendment to your LLC Articles. If you do not indicate the management structure here, your LLC will be presumed “member-managed”, but that presumption can be privately amended by your LLC’s operating agreement.
- Number of members. The number of members (owners) your LLC has at the time of filing.
- Member/manager information (optional). You may include each member’s name and address.
- Effective date (optional). You can delay the start of your LLC by up to 90 days or choose “Date of Receipt” for the earliest possible formation date.
- Organizer signature and address. This is the person who prepares and files your Articles of Organization.
How can I keep my personal information off the public record?
Unfortunately, most documents you file with the Vermont Secretary of State are public records—which means the information listed on the forms is listed in an online database. Marketers will find your information and sell it. It’s what they do.
The best way to safeguard your privacy is to hire a registered agent company that will list their name and address on the Articles of Organization—like us. This spares you from having to list your personal information on the public record.
What’s the difference between a member-managed and manager-managed LLC?
In a member-managed LLC, members handle the business’s day-to-day operations. In a manager-managed LLC, members hire or appoint one or more managers to run the company. Managers will also have the ability to hire and fire employees, enter into contracts, open bank accounts, and more.
For help with deciding which management structure will work for you, see our page on LLC Member Vs Manager.
How do I file the Vermont Articles of Organization?
You can submit your articles online, by mail, or in person.
Mail and in person:
Vermont Secretary of State
128 State Street
Montpelier, VT 05633-1104
4. Write an LLC Operating Agreement
An operating agreement is a legally binding document that outlines the rules and provisions all members of your LLC must follow. In addition, it explains how your LLC will handle major events such as potential mergers, votes, conversions, and internal disputes.
Check out our attorney-drafted Vermont LLC Operating Agreement.
Does Vermont require an LLC to have an operating agreement?
Vermont Statute 11 V.S.A. § 4003 doesn’t specifically state that your business is required to have an operating agreement. But having a solid operating agreement is vital for your LLC. An operating agreement is an internal document, so you don’t need to file it with the Secretary of State. Still, your LLC will be subject to Vermont’s default LLC statutes without one, which may not work best for your business.
What should be included in an operating agreement?
A solid operating agreement should explain how your LLC will handle major events—everything from making decisions to dissolving the business. Here is a list of common topics covered by operating agreements:
- initial investments
- profits, losses, and distributions
- voting rights, decision-making powers, and management
- transfer of membership interest
- dissolving the business
Vermont allows you to create an operating agreement for your specific needs. You can include anything, so long as it doesn’t violate state law or the Articles of Organization.
Does a single-member LLC need an operating agreement?
Yes. Although you likely won’t need a legal document to resolve any arguments with yourself, having an operating agreement will be necessary to open a business bank account and support your LLC’s liability protection.
5. Get an EIN
An EIN—or employer identification number—is like a social security number for your LLC. The IRS assigns the unique number for tax purposes. You can apply through the IRS website or use a paper form to obtain an EIN. There is no fee.
Do I need an EIN for my Vermont LLC?
Yes. Legally, you’re only required to obtain an EIN if you hire employees or are taxed as a corporation. However, most banks require an EIN to open a business bank account. Plus, having an EIN will prevent you from giving vendors your social security number.
What To Do After Forming Your Vermont LLC
6. Open a Bank Account
Your business needs a bank account. Why? LLCs are considered separate, distinct entities from their owners. It’s this separation that gives you limited liability protection. If you mix personal and business finances, you risk losing that protection.
To open a bank account for your Vermont LLC, you’ll need to bring the following to the bank:
- Vermont LLC Articles of Organization (a copy is fine)
- the LLC’s operating agreement
- the LLC’s EIN
- an LLC Resolution to Open a Bank Account (if your LLC has more than one member).
If your LLC has more than one member, use our free LLC Resolution to Open a Bank Account.
7. Fund the LLC
You successfully formed your LLC and opened a bank account. Now, it’s time to fund it. Traditionally, members make initial contributions by writing a check or depositing cash into the company’s bank account to pay for their membership interest. Members can also make contributions via property or services. But, these types of contributions can trigger tax events. So, if you or another member decide to go that route, you may want to seek professional advice.
What is LLC membership interest?
Membership interest is your percentage of ownership in the LLC. Usually, membership interest is equal to the amount initially contributed to the business. For example, let’s say your partner invests $4,000 in the LLC, and you invest $6,000. In this case, you’d own 60% of the LLC, while your partner would own 40%. Membership interest typically determines voting rights.
8. File State Reports & Taxes
Your Vermont LLC must file an annual report with the Secretary of State, Corporations Division. This yearly report ensures the state has the most current information on your LLC. The Vermont annual report costs $35 to file.
Tired of paperwork? Let us file your annual report for you.
When is the Vermont Annual Report due?
The Vermont annual report is due three months after your fiscal year-end. For most businesses, this will be March 1st.
How are Vermont LLCs taxed?
LLCs in Vermont are treated as pass-through entities. This means company profits are distributed to the members (owners), who then report their shares on their personal tax filings. Vermont LLCs are also subject to the federal self-employment tax rate (15.3%). LLCs can elect to be taxed as an S-corp or C-corp by filing paperwork with the IRS.
Learn more about S-Corp Vs LLC tax designation.