Start an LLC in Vermont

Before anything else can happen, your LLC needs a name. Vermont’s full set of rules for naming an LLC can be found in 11 V.S.A. § 4005. In general, your LLC’s name must:

• Include an acceptable indicator like “limited liability company,” “L.L.C.,” or “LLC.”
• Not include words or abbreviations like “incorporated” or “limited partnership,” or anything else implying your LLC is a different type of entity.
• Be unique among businesses in Vermont.

If you’ve already got a name in mind, you should check to see if it’s available. If you have a name but aren’t ready to form an LLC just yet, you can pay $20 and reserve a Vermont LLC name for up to 120 days.

State law requires all Vermont LLCs to appoint a registered agent. The registered agent can be yourself, someone else, or a company like Northwest. Whoever they are, they must be able to accept legal mail (like notice of a lawsuit filed against you) and state documents on your behalf, then forward that mail to you as quickly as possible.

In addition to the legal mail requirement, your Vermont registered agent must also:

• Have a physical address in Vermont. A PO Box isn’t acceptable.
• Keep regular business hours.

Learn why the pros use a registered agent service.

To legally form your LLC, you must submit Articles of Organization to the Secretary of State, Corporations Division. You must also pay a $125 filing fee. Without both the Articles and filing fee, Vermont won’t approve your LLC.

Keep in mind that all the information on this form becomes part of the public record.

To complete your Articles of Organization, include 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. Most people select the last one.

• Fiscal year end. The month your fiscal year ends. If you’re 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.

• Principal address. You must list a physical Vermont address, not a PO box.

• Mailing address. You can 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.

• Registered agent mailing address. This can be a PO box.

• Registered agent email. Enter your registered agent’s email address.

• LLC management (optional): Select whether your LLC will be manager-managed or member-managed.

• Number of members. The number of members (owners) your LLC has at the time of filing.

• Member/manager information (optional). If you want, 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.

An operating agreement is an important internal document that goes into great detail about how your business should run. It covers everything from how much each member invested to how the business distributes profits and losses. It should even cover how the business would dissolve itself should that become necessary.

Contact a lawyer or use our free Vermont LLC Operating Agreement Template.

You won’t be surprised to know your Vermont LLC needs money to function. To maintain your liability protection, that money should not be mingled with any member’s personal funds, which means you need to open a business bank account. In most cases, you need to get an EIN to open a bank account (the only exception is if you’re a single-member LLC and fine with using your Social Security number). ‘

After the bank account is open, the LLC must fund it. To do this, every member should make an initial deposit equal to their membership interest.

Vermont LLCs must meet specific tax and reporting obligations. Here’s a rundown:

• Taxes: Like every other state, Vermont treats LLCs as pass-through entities by default. This means business profits are distributed to members (aka owners), who must then report any LLC income on their personal taxes. Vermont LLCs must also pay the federal self-employment tax of 15.3%. If you want other options, you can file paperwork with the IRS that lets your LLC be taxed as an S-corp or C-corp.

• Annual Reports: You must file an annual report with the Vermont Secretary of State, Corporations Division, to ensure the state has up-to-date information about your LLC. It costs $35 to file, and reports are due three months after your fiscal year ends. This means most companies will have their reports due by March 1. If you’re fed up with paperwork, let us file your annual report for you.

• BOI Report: The majority of Vermont LLCs have to complete an additional filing at the federal level. A Beneficial Ownership Information (BOI) Report is required as of 2024. You must reveal identifying information about your company’s beneficial owners. Depending on when your LLC was formed, you may also need to list information about the company applicant. You can also  hire us to file the BOI report on your behalf.

*This is informational commentary, not advice. This information is intended strictly for informational purposes and does not constitute legal advice or a substitute for legal counsel. This information is not intended to create, nor does your receipt, viewing, or use of it constitute, an attorney-client relationship. More information is available in our Terms of Service.