How To Start a Vermont LLC

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Last Updated: August 17, 2022

Overview

As you embark on this journey to start a Limited Liability Company in Vermont you will need to think about just using a professional service like Northwest Registered Agent who can help you make sure you’re following all the right steps.

Recommended: Northwest Registered Agent 

Use Northwest Registered Agent and they will also give you the first year of their registered agent service included too. Go check it out and you’ll appreciate that you did.

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I also like to talk about what Vermont is known for and incorporate the best business ideas for Vermont based on that. The typical business ideas that come up are:

  1. Start a Bennington Battle Monument Touring Company
  2. Start a Brewery Touring Company
  3. Start a Ben & Jerry’s History Tour Company

There are so many more potential options for you to consider when looking at this but start small and grow into a bigger opportunity. Once you’ve figured out what kind of Limited Liability Company you want to setup it’s time to get into the business name you’re going to use.

Name Your Vermont LLC Business Name

There are Vermont Naming Guidelines you’ll need to follow for your business name:

  • The name must contain “Limited Liability Company” or “LLC.”
  • The name cannot be the same as any other business entity already on file with the state.
  • The name cannot contain restricted words (e.g. Bank, Attorney, University) without additional paperwork and a licensed individual, such as a doctor.
  • The name cannot imply a purpose outside of the stated business purpose in your Articles of Organization.
  • Certain words (e.g. Treasury, Federal, FBI) may require additional paperwork and a licensed individual.
  • Your LLC’s name must be distinguishable from all other business entities on file with the state. The Vermont Secretary of State’s office will not approve names that are too similar.
  • Your LLC’s name must not imply a purpose outside of the stated business purpose in your Articles of Organization.
  • The name cannot be misleading to the public.

You may reserve a business name for 120 days by filing an Application for Name Reservation with the Vermont Secretary of State’s office. I would also think about whether it’s actually something you can use by searching the Vermont Secretary of State’s business name portal here.

After you’ve done that you’ll need to head off to the USPTO’s office and figure out if there are any trademarks associated to the name you want to use for your business.

You can search for that here

Once you’ve figured out all the details around the LLC name and what Vermont requires LLCs to do related to this, you’ll be ready to go check if your business name is available in the digital world!

Get a Website Domain for Your Vermont Limited Liability Company

You’re almost ready to start your Vermont LLC but there’s one last thing you need to do before you can get started. You’ll need a website domain name that matches your business name as closely as possible. The reason for this is because people will be looking for you online and it’ll be how they find your contact information, social media, and any other details about your business.

There are a few different places you can buy website domains but my favorite place is GoDaddy.com. I also recommend you use their website builder to make sure you’re leveraging the power of GoDaddy for the existing business you’re going to be building.

After you’ve locked this down and are clear about what you’re going to do for your professional LLC, it’s time for you to go get your registered agent setup.

Choose your registered agent

A registered agent or registered agent service is a business or individual designated to receive official legal and tax documents on behalf of your LLC. The registered agent must have a physical street address in Vermont and be available during normal business hours.

The primary reason for having a registered agent is so that your LLC always has someone who can be served with process if you are ever sued. If somebody sues your LLC and you can’t be found, the court will serve your registered agent instead.

If you are forming an LLC outside of Vermont, you may still need to appoint a registered agent in Vermont if you have any business activities taking place in the state or if you plan to do business with residents of Vermont.

There are ways of using a Vermont law firm too where most businesses may use a professional service like Northwest Registered Agent but you can also consider using a law firm. I recommend using registered agent services like Northwest but it’s your business and your choice.

If you’re thinking about being your own registered agent as a business owner, I’d think again. The last thing you need or want is to have someone serving papers to your home or dealing with having to always be there. It’s more of a pain then it’s worth so spend the money to have a Vermont Registered Agent service help you with making sure you’re doing the most appropriate thing for your business.

Prepare and File Articles of Organization

Now that you’ve got your business name and registered agent squared away, it’s time to file your Articles of Organization with the Vermont Secretary of State. The form you’ll need is available on their website and it’s relatively straightforward.

Be sure to have the following information handy when you’re filling out the form:

  • The name of your limited liability company
  • The address of your LLC in Vermont
  • The name and address of your registered agent
  • The effective date of your Articles of Organization
  • Whether your LLC will be member-managed or manager-managed
  • The names and addresses of each organizer

The filing fee is $125 and it can be paid by check or money order. Make the check payable to “Vermont Secretary of State” and include it with your Articles of Organization.

You can mail the completed form and filing fee to:

Vermont Secretary of State

Business Services Division

128 State Street

Montpelier, VT 05633-1101

Once you’ve got all of that squared away, you’re ready to move on to the next step which is my favorite – operating agreements.

Create an operating agreement

An operating agreement is a powerful legal document that will help you with the business structure, tracking personal assets invested, business debts, how to hire employees and informing the LLC members of the decisions you’re making with whatever kind of business you’re going to setup . It may be that you’re looking to setup a sole proprietorship, foreign LLC, manager managed LLC, domestic LLC or potentially a low profit LLC. Whatever the type of business is, you’re going to need to have some kind of protection as you conduct business for you and your business partners.

The traditional things you’ll find in an operating agreement are:

  • Names of the owners and their ownership percentages
  • The management structure
  • How new members can be brought in or how ownership can be transferred
  • Voting procedures
  • Dissolution procedures
  • Member and manager duties and rights
  • Indemnification rules
  • Tax provisions

Operating agreements don’t have to be notarized or filed with the state, but it’s a good idea to keep them in your company records.

If you have any questions about Vermont LLCs or need help forming your own, make sure you contact an attorney to help!

Get a Employer Identification Number

The next step is to obtain an Employer Identification Number (EIN) from the IRS. You’ll need this number to open a business bank account, file your taxes, and hire employees.

You can apply for an EIN online (IRS Website), by mail, or by fax. If you apply online, you’ll get your EIN instantly.

Once you’ve setup your Federal Tax Identification Number, you’re going to be able to star thinking about all the money related topics like:

  • Federal Taxes
  • State Taxes
  • Sales Tax
  • Your LLC’s fiscal year

By doing this work for your individual or business entity your going to feel empowered to start running your business with this as one of the business tools that will enable to you to take control of your business assets, setup a bank account, create a business credit card and just feel like you have made it once you’ve setup your EIN.

Open A Business Bank Account

After you’ve gotten your Federal Employer Identification Number, you’re going to need to setup a business bank account. I recommend you go to Lili to setup your bank account because it’s so easy and painless as you’re finding the You won’t need to plug in details about your bank account into your LLC’s operating agreement but it is an important thing the Internal Revenue Service is going to want to know about as you build your business. They are a government agency that is always interested in people’s money.

As LLC owners we need to be mindful of that and run this with ownership and operating procedures to make sure our business is operating in a positive light.

Get Small Business Insurance

There are many types of business insurance but I highly recommend you go find some limited liability protection and consider using CommercialInsurance.net to get quotes on everything else that is available to you.

The other types of insurance I’d consider for business are:

  • Product liability
  • Professional liability
  • Business property insurance
  • Workers’ compensation
  • Vehicle insurance
  • Disability insurance

By getting this kind of protection, you’re not only protecting your business but also your family’s assets. I’ve seen too many people get sued and have their personal assets taken away because they didn’t have the right protection.

Get a Business License or Permit

The last thing you need to do is get a business license or permit. Depending on the type of business you have, the permits and licenses will vary. You can go to the SBA website to find out which ones are required for your business. You need to check with your local city and county to determine what the right licenses and permit’s you may need are.

File an Annual Report

All LLCs in Vermont must file an annual report with the state. The report is due by April 15th and can be filed online, by mail, or in person.

You will need to include:

  • The LLC’s name and address
  • The names and addresses of the members and managers
  • The LLC’s registered agent’s name and address
  • The LLC’s federal tax identification number
  • The filing fee, which is $35 as of 2019

To file the annual report, you’ll need to log in to the Vermont Business Services website. You’ll need to create an account if you don’t already have one. Go do that and when you’re completed you’ll be in the right place to have the Vermont LLC articles of incorporation and setup for the annual report that needs to be submitted.

Pay Annual Taxes

Your LLC will also need to pay annual taxes. The tax is $35 as of 2019 and is due on April 15th. You can pay online, by mail, or in person.

To pay, you’ll need to log in to the Vermont Business Services website. Again, you’ll need to create an account if you don’t already have one.

And that’s it! You’ve now officially started your Vermont LLC!

FAQs

How much does it cost to get an LLC in Vermont?

It costs $125 to file the Articles of Organization with the state of Vermont.

How long does it take to set up an LLC in Vermont?

The Articles of Organization must be filed with the state and it usually takes about 3-5 business days for the state to process the paperwork.

What are 3 disadvantages of an LLC?

The disadvantages of an LLC are:

1. You will be taxed as a self-employed individual, which means you’ll have to pay both the employer and employee portions of Social Security and Medicare taxes.

2. You’ll have to file an annual report with the state, which costs $35 as of 2019.

3. You’ll need to pay annual taxes, which are also $35 as of 2019.

What are the 4 types of LLC?

1. Single-member LLC

2. Multi-member LLC

3. Limited liability company (LLC)

4. Professional limited liability company (PLLC)