How To Start A Nonprofit In Vermont
To start a nonprofit corporation in Vermont, you must file the Articles of Incorporation of a Vermont Nonprofit Corporation with the VT Secretary of State. You can file your articles by mail or online. The articles of incorporation cost $125 to file. Once filed with the state, the articles of incorporation officially create your Vermont nonprofit corporation, but truly preparing a nonprofit to pursue its mission involves several additional steps.
Starting a Vermont Nonprofit Guide:
- Choose your VT nonprofit filing option
- File the VT nonprofit articles of incorporation
- Get a Federal EIN from the IRS
- Adopt your nonprofit’s bylaws
- Apply for federal and/or state tax exemptions
- Apply for required state licenses
- Open a bank account for your VT nonprofit
- File the VT nonprofit biennial report
Vermont Nonprofit Filing Options
Free PDF Download
Download the Vermont nonprofit articles of incorporation. Fill out the form and submit to the state.
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VT Nonprofit Articles of Incorporation Requirements
To incorporate a Vermont nonprofit, you must complete and file the Articles of Incorporation of a Vermont Nonprofit Corporation with the VT Secretary of State. See the document below and click on any number to see what information is required in the corresponding section.
The name of your nonprofit has to be distinguishable from the names of other organizations in the state. There are also regulations concerning words used in your nonprofit’s name. The name has to include one of these words or abbreviations: “corporation,” “incorporated,” “company,” or “limited,” or their appropriate abbreviations.
The second article is optional. The form lists various types of nonprofit corporations (with their corresponding general purposes), and you can use the available selections to define your nonprofit's purpose. If your nonprofit intends to seek 501(c)(3) federal tax-exempt status, the first section (Charitable Organization, Church or Religious Organization, or Private Foundation) applies to you.
Identify your nonprofit as either a public benefit or mutual benefit corporation. Unless your nonprofit exists to benefit its members (as in, for example, a homeowner association), it's likely a public benefit corporation.
Indicate if your nonprofit is a member organization or not.
Include the physical Vermont address (not a PO Box) of your nonprofit's principal office. When you hire Northwest, you can put the address of our Vermont office here.
Include the name, Vermont street address, and email address of your nonprofit's registered agent. When you hire Northwest, our information goes here as well. Your nonprofit's registered office is the physical address at which your registered agent is available to receive service of process (legal notices) from the state.
Include the names and addresses of your nonprofit's initial directors/incorporators (at least three).
For most nonprofits, the effective date and the filing date will be the same, but if you want to delay the official creation of your organization, you can delay your effective up to 90 days after the state files your articles of incorporation.
Lastly, each of your nonprofit's initial directors/incorporators must date and sign your articles.
How Much Does It Cost to Incorporate a Vermont Nonprofit?
Vermont charges $125 to file nonprofit articles of incorporation. When you hire Northwest to form your nonprofit, your total cost, which includes a full year of our registered agent service, is $350.
How Long Does It Take to Start a Vermont Nonprofit?
Vermont might take up to seven business days to process mailed filings, but you can expect a 3 day response time if you file online. When you hire Northwest to incorporate your nonprofit, we’ll file your articles online and get them processed within 3 business days.
Does a Vermont Nonprofit Need a Registered Agent?
Yes, you’re required to appoint a Vermont registered agent to receive service of process (legal notices) on behalf of your nonprofit. The registered agent can be an individual Vermont resident (such as yourself or a willing associate) or a business that provides registered agent services (like Northwest). Note, however, that a business cannot serve as its own registered agent.
You can take on the job yourself, but it’s important to know what the job involves. A registered agent must be available at a (publicly-listed) Vermont street address during normal business hours; and, since the address goes into the public record, it isn’t unusual to have to deal with excessive junk mail and salespeople along the way.
Hiring Northwest to serve as your registered agent can dissolve these problems and free you up to manage and grow your nonprofit on your own terms. You’ll benefit from the assistance of our expert Corporate Guides and gain access to our numerous free nonprofit forms. And if a process server ever does come to our office with a lawsuit for your nonprofit, we’ll scan it and send it to you on the say we receive it.
Get a Federal Employer Identification Number (EIN)
Your nonprofit will need a federal employer identification number (FEIN or EIN) to open a bank account and apply to the IRS for federal tax-exempt status (among navigating numerous other financial matters). Fortunately, the application process is fairly simple. As soon as the state approves your articles, you can apply for an EIN at the IRS website, by fax, or by mail. Or you can add our convenient EIN service, for an additional $50 fee, when you hire Northwest.
Hold Your Organizational Meeting & Adopt Bylaws
Vermont requires nonprofits to adopt bylaws, and you should try to do so at your nonprofit’s organizational meeting. This is the meeting where you’ll take care of any official business necessary to fully complete your organization’s formation after the state approves your articles of incorporation. If your nonprofit intends to seek 501(c)(3) federal tax-exempt status, moreover, be sure to adopt your bylaws before submitting the Application for Recognition of Exemption to the IRS. The IRS only wants to deal with a fully formed nonprofit.
Corporate bylaws matter because they provide clear answers to procedural questions and allow your nonprofit’s directors guide the organization as consistently as possible. Will your nonprofit have voting members? Will those members be divided into distinct classes with different rights and responsibilities? How long is a director’s tenure? What are the secretary’s responsibilities? (And so on!)
Writing effective bylaws is probably one of the most difficult parts of starting a new nonprofit, which is why Northwest provides an adaptable template for writing nonprofit bylaws, as well as numerous other free nonprofit forms, to help get things started. Want to learn more about Vermont nonprofit bylaws? Check out our free attorney-drafted nonprofit bylaws template and article on everything you need to know about drafting and adopting bylaws in Vermont.
Apply for Federal and/or State Tax Exemptions
Will My Vermont Nonprofit Be Tax Exempt?
Nonprofit corporations are not automatically tax-exempt, but it is possible to achieve 501(c)(3) federal tax-exempt status by submitting an Application for Recognition of Exemption to the IRS. This involves paying a $275 or $600 filing fee (depending on your nonprofit’s size and nature) and waiting around 3-6 months while the IRS examines your organization’s purpose and structure to make sure it qualifies. Section 501(c) of the Internal Revenue Code describes more than two dozen different types of tax-exempt organizations, but most nonprofits seek 501(c)(3) status for public charities and private foundations.
If your Vermont nonprofit intends to seek 501(c)(3) status, make sure your Articles of Incorporation include a statement of purpose and dissolution clause using the specific language required by the IRS.
What About Vermont State Tax Exemptions?
If your nonprofit manages to obtain 501(c)(3) federal tax-exempt status, it will automatically be exempt from paying Vermont corporate income taxes. It’s also possible to obtain an exemption from the Vermont sales and use tax by applying to the VT Department of Revenue. Learn more at Northwest’s guide to Vermont state tax exemptions.
Obtain Vermont State Licenses
Does a Vermont Nonprofit Need a Business License?
Vermont doesn’t issue a general, statewide business license, but many counties and cities have licensing requirements of their own. It’s best to contact your city clerk’s office to find out which (if any) licenses apply to your nonprofit’s business activities.
Should My Nonprofit Register as a Vermont Charity?
No. Vermont does not require nonprofits to register as a charity before soliciting and collecting charitable donations.
Open a Bank Account for Your Vermont Nonprofit
To open a bank account for your Vermont nonprofit, you will need to bring the following items with you to the bank:
- A copy of your Vermont nonprofit articles of incorporation
- A copy of your nonprofit’s bylaws
- Your Vermont nonprofit’s EIN
It’s wise to call your bank ahead of time to check its requirements. Some banks may require you to bring a resolution authorizing you to open a bank account in your nonprofit’s name (particularly if your nonprofit has several directors and/or officers).
File the Vermont Nonprofit Biennial Report
Vermont requires nonprofit corporations to submit a biennial report every two years to update or confirm its information on the state’s records, including your corporate name, information about members, directors, and/or officers, and registered agent information. There is a $20 filing fee, and the report is due by April 1st every two years.
You can file report yourself online or by mail, or you can bypass the hassle altogether and hire Northwest to file your biennial report for you. Just add our Vermont Business Compliance service, for an additional fee, at checkout.