How to Form an LLC
1. Find a Business Name
- Business Search: www.bizfilings.vermont.gov
Use the Business Name Search tool on the Online Business Service Center website to see if your desired LLC name is available. If no other business has registered with that name, the words “No data found with your search criteria” will appear on the screen.
The LLC name must include the words “limited liability company” or “limited company,” or the abbreviation “L.L.C.,” “LLC,” “L.C.,” or “LC.” The words “limited” and “company” may be abbreviated as “Ltd.” and “Co.,” respectively.[2]
2. Select a Registered Agent
Any LLC authorized to do business in Vermont must designate and maintain an agent and street address for service of process on the company. The agent must be a resident of the state or a corporation or LLC licensed to do business in Vermont.[3]
3. Register the LLC
There are two options for registering your LLC in Vermont: online or by mail.
Option 1: File Online
Go to bizfilings.vermont.gov to begin the process of filing your LLC online.
You will need a User ID and password in order to access the Corporations Division’s Online Business Service Center. If registering as a Business User, enter your business name instead of your own name when creating your account.
After indicating whether you are registering a domestic or foreign entity, use the dropdown menu to specify that your business is an LLC. A second dropdown menu will then appear, which you can use to select the specific subtype of your LLC.
Enter the name of your LLC, as well as any alternate business name you might have. Then, use the dropdown menu to select the appropriate NAICS code for your business. The codes correspond to categories such as construction, manufacturing, and retail.
Enter the physical address of your business. If your LLC will have a different mailing address, enter that as well.
If you are using a commercial registered agent or one that is already on file with the Corporations Division, you can search for their name in the search box. Otherwise, click “Create Agent” to enter their name, address, and contact information.
The remainder of the form will ask you to indicate your management style, add the physical address of at least one manager or member, and upload any additional provisions you would like to have on file.
After certifying that the information on your filing is accurate, you will be prompted to proceed to payment. There, enter your credit card or bank account information to pay the filing fee. After payment, you will be able to submit your filing.
Option 2: File By Mail
The Vermont Secretary of State strongly prefers that LLCs register with the state online. However, paper forms can be requested from the Corporations Division’s website and mailed in along with a check or money order.
- Filing fee: $125 check or money order made payable to “VT SOS.”
- Mailing address: Vermont Secretary of State, 128 State Street, Montpelier, VT 05633-1104
4. Obtain an EIN
- Apply Online: www.irs.gov
- Apply by Fax/Mail: Form SS-4
An LLC that hires employees or that operates as a corporation must obtain an Employer Identification Number (EIN) from the Internal Revenue Service.[4]
5. Write an Operating Agreement
Vermont state law does not require that an LLC place an operating agreement on file. However, it is generally recommended for a company to draft an agreement in order to establish clear standards and guidelines for how the business will be operated.
Download: PDF, MS Word, OpenDocument
6. Choose a Tax Classification
The most common types of tax classification for LLCs are:
- LLC – As an LLC, a sole proprietorship or partnership is considered a “pass-through entity,” in which all profits are taxed as income for the owners/members.
- S-Corporation – As an S-corporation, shareholders must pay income tax on all business profits and losses, which are sent to the shareholders. To file as an S-corp, an LLC must file IRS Form 2553 within 75 days of formation.
- C-Corporation – As a C-corporation, all business profits and losses are considered a separate corporate entity. To file as a C-corp, an LLC must file IRS Form 8832 within 75 days of formation.
7. File Annual Report
LLCs in Vermont must file an annual report with the Corporations Division each fiscal year in order to remain in good standing. This report is due within the first three months following the fiscal year-end on record.
For example, if an LLC’s year-end date is January 31, its annual report is due each year by April 30.[5]