How to Start an LLC in Vermont
To start an LLC in Vermont, you must file Articles of Organization with the Vermont Corporations Division. You can file the document online or by mail. The Articles of Organization cost $125 to file. Once filed with the state, this document formally creates your Vermont LLC. However, to actually ready the LLC to do business, you must complete several additional steps.
Starting a Vermont LLC Guide:
Vermont LLC Filing Options
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Vermont LLC Articles of Organization free download. When you're done filling out the form, submit it to your state.
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Vermont LLC Articles of Organization Requirements
To form a Vermont LLC, you must complete and file the Articles of Organization with the Vermont Corporations Division. See the document below and click on any number to see what information is required in the corresponding section.
Your name must end with “Limited Liability Company,” “Limited Company” or an abbreviation. Tip: Most businesses keep it short and sweet with “LLC.”
You have to choose what kind of LLC you’re creating: a regular LLC, a professional LLC or a low-profit LLC. A professional LLC offers the services of licensed professionals (think doctors and lawyers). A low-profit LLC can make some money but is similar to a non-profit. Low-profit LLCs are organized for an educational or charitable purpose—not for “income production.” Tip: Most LLCs are just regular LLCs (not professional or low-profit LLCs).
Skip this section if you follow a typical calendar year. If your fiscal year ends in a month other than December, list that month in your Articles. Tip: Most LLCs skip this section.
A huge list of possible business activities were translated into these 6-digit codes to make statistics easier for government agencies. Online, just choose the code from the drop down menus that best matches your primary business activity. Filing with a paper form? Go to the NAICS website to browse codes. It’s okay if your code’s not a 100% perfect match.
This is optional on the paper form, so most businesses skip it. Online, you have to put an email so the state can send you your approved Articles. Don’t want to list your email on this public document? At Northwest, we allow our clients to use our email address.
This is the official street address of your Vermont LLC. Hire us as your registered agent and you can use our Vermont address as your initial designated office address.
The registered agent can either be a business (but not your own) or an individual Vermont resident. The registered address must be a physical address and will be a permanent public record for your Vermont LLC. Tip: We recommend Northwest Registered Agent for expert registered agent service.
Select whether or not your LLC has members at the time of filing and if members or managers will run the company. Most LLCs are member-managed, so members make all the decisions. If you don’t run the day-to-day operations, you can turn over decision-making powers to managers (just note that once you turn over this power, you have no right as the member to make decisions for the LLC; your only right is to remove the manager and vote on who the next manager should be). You can also include the names and addresses of initial members or managers, but it’s optional so most businesses skip this section.
Skip this section and your Vermont LLC will begin upon filing. Prefer to push out your start date (maybe the next tax period is right around the corner)? You can list an effective date up to 90 days in the future.
This is just the person filing the LLC and has no real significance. Organizers don’t have to be members or managers, but they do have to include their name, address, and signature. We’ll be your organizer when you hire Northwest.
How much does it cost to start a Vermont LLC?
The Vermont Corporations Division charges a $125 fee to file Articles of Organization. Hire Northwest and your total, out-the-door cost is $350, including state fees, registered agent service, and loads of useful forms and resources to help get your Vermont LLC up and running.
How long does it take to start a Vermont LLC?
File online and receive your approved Articles within 1 business day. Or, wait 7-10 business days if you opt to mail two copies of your Articles to the Corporations Division. While you wait for someone to manually enter all of your data in the system and eventually process your filing, maybe take off for a few days and do some lake fishing. Or hike a section of the Long Trail.
If you hire Northwest to start your LLC, we file online and typically have your Vermont LLC formed within 24 hours.
Does a Vermont LLC need a registered agent?
Your Vermont LLC is required to have a Vermont registered agent. You could always appoint yourself as your LLC’s registered agent, but this job is more involved than it appears and can seriously affect both your privacy and your freedom to run your business how you please. Registered agents have to list the address where they’ll be regularly available in their Articles of Organization. Your Articles and other business entity filings are public documents, so any information you list becomes a hot commodity for data sellers and solicitors. At best, you’ll end up with a mailbox full of junk. Registered agents also have to be available at the address listed during business hours. When you’re stuck in the office, it becomes a whole lot harder to attend meetings, run errands and just run your business in general.
A better option? Consider hiring a commercial registered agent like Northwest. When you sign up for our services, you can use our address and information throughout your Articles of Organization. No need to worry about junk mail or unwanted visitors on your doorstep. We’ll also accept, scan and send you any service of process the same day, so you can stay on top of your business, wherever you are.
Create the Vermont LLC Operating Agreement
Do I need an Operating Agreement?
A lot of people get tripped up by the fact that operating agreements aren’t required by the state or by any Vermont statute or regulation. They make the assumption that operating agreements aren’t necessary or important. Nothing could be further from the truth.
Your Vermont LLC’s public and private documents serve entirely different purposes. Your mandatory public documents—like your Articles or Annual Reports—give the state your most basic information like your name and registered agent, so the state can keep tabs on you. Private documents—like your operating agreement—set the terms of your business.
Why is an Operating Agreement important?
Your operating agreement puts in writing who owns the business. Who invested what. How profits and losses are allocated. What happens if there’s a dispute. What happens if the business goes belly up. Essentially, all of the absolute most important information about how your business functions is spelled out in your operating agreement. And while it’s a private, internal document, the people and businesses you work with will want to see it: members, managers, lenders, investors, and partners. Even just to open a bank account, you’ll most likely need your operating agreement.
Do I have to write the Operating Agreement?
You should spend some time developing your operating agreement, making sure you include everything you need (and thoroughly understand the potential effects of the decisions you make). However, you don’t have to do it all yourself. To help you start off on the right foot, we give you a free operating agreement, specific to your management style, when you hire Northwest to form your Vermont LLC. We give you other free private documents as well, like resolutions and membership certificates. We know how important these internal documents are, which is why we’ve spent years refining and improving our free forms. We’re proud to say that over 1 million LLCs have used our free LLC forms to help form and maintain their businesses.
Get a Vermont LLC EIN
Do I have to get a tax ID number (EIN)?
Most likely—on the federal level, you’re required to get an EIN if you plan to hire employees, be taxed as S corporation, or file certain federal excise returns. On the state and local levels, there’s also plenty of reasons you might need an EIN. Just about every bank requires your EIN to open a business account. If you want to register for Vermont’s myVTax tax payment portal, you’ll need an EIN. If you want to establish credit with a vendor, you’ll be asked for your EIN again. For some of these situations, you could use your personal social security number instead, but that just puts your private data at risk. Getting an EIN is fairly simple and free from the IRS. Or, make it even easier and skip this application entirely—hire Northwest to get your EIN for you when sign up for our services.
Open a Bank Account for Your Vermont LLC
To open a bank account for your Vermont LLC, you will need to bring the following with you to the bank:
- A copy of the Vermont LLC Articles of Organization
- The LLC operating agreement
- The Vermont LLC’s EIN
If there are multiple members in the LLC, you may also want to bring an LLC resolution to open a bank account that states that the person going to the bank is authorized by the members to open the account in the name of the LLC.
We recommend calling your bank ahead of time before going in and asking what their requirements are. Most banks don’t open business accounts nearly as frequently as personal accounts, so some bankers may be unfamiliar with their own bank’s requirements. As frustrating as that may be for you, calling ahead will help save you from being super annoyed when you walk into the bank.
Obtain a Business License
Does a Vermont LLC need a business license?
Vermont doesn’t have a general, statewide business license, but cities and counties may have their own requirements for business licenses. For example, all businesses in Brattleboro must obtain a business license ($50) and renew it each year.
File Vermont LLC Reports
What is a Vermont LLC Annual Report?
Your Vermont LLC Annual Report is a form you file each year to update the state on your ownership and contact information. The $35 fee and report are due within the three month window after the end of your fiscal year (by March 31st for most businesses). The odd due date is tough to remember, but if you forget to file, you’ll lose your good standing. Fail to file for three months, and your LLC will be dissolved. Not to worry, Northwest has your back. When you sign up for our services, we send you reminder notifications for your reports. Want one less item on your “to do” list? Hire Northwest to file your Annual Report for you.
How much does an LLC in Vermont cost each year?
There’s a $35 fee to file the mandatory Vermont LLC Annual Report.
Pay the LLC Taxes
What are the Vermont LLC taxes?
The Vermont personal net income tax rates are:
3.55%: $0 to $37,949
6.80%: $37,950 to $91,899
7.80%: $91,900 to $191,649
8.80%: $191,650 to $416,699
8.95%: $416,700 +
The state sales tax rate is 6%, and cities can add on up to 1% more, making the highest possible sales tax rate total 7%.
Vermont also has a Business Entity Tax, an income tax that affects most LLCs. If your LLC is taxed as a partnership or S corporation, you have to file. There’s a minimum tax of $250.
Property taxes in Vermont are pretty high—at an average of 1.78%, property taxes are the eighth highest in the country. High property taxes, however, doesn’t mean that investment properties are off the table, particularly with the high rate of seasonal tourism (thank you leaf peepers). Considering investing in Vermont real estate? Your accountant will likely suggest setting up an LLC. An LLC limits your liability and can help you maintain your privacy by keeping your name out of public records. At Northwest, we can form your Vermont LLC for just $350.