Living in Vermont is profitable for many small business owners, but it can also be a very stressful if your business is sued and you become personally liable for the debt. Registering your company as an LLC allows you to forgo instances such as this by protecting your personal assets. Limited Liability Companies work the same way across the country. Filing as one allows you to separate your personal and business finances so you’re not required to pay debts incurred by your business from your personal assets. In Vermont, you have to file an application, select a name, choose a registered agent, and follow the same rules as any other LLC in the country. There are slight deviations to the application process and Vermont law in terms of business and tax licensing, but the overall process is very similar. Your forms and paperwork required to become an LLC are all found on the Vermont Secretary of State’s website.
The most challenging part of becoming an LLC in Vermont is finding a business name that’s not already registered. Vermont law requires your business name include “LLC” following the name. The Secretary of State’s website includes a database of names already registered throughout the state you can check out. Once you find a name that’s not already registered, you hold that name with a reservation application. This is $20 reservation you can file online or in person that lasts 120 days. It’s challenging to business owners who are already in business and forced to change their business name because someone else is already using it.
Finding a Registered Agent
You may not act as your own registered agent in Vermont. If there is any legal issue with your business, it goes through this person. This is a person who has a physical address in Vermont, and is licensed to do business in Vermont should you choose to use an attorney or law firm to act as your registered agent. It’s highly recommended you do use a legal professional to represent you in this way, but it’s up to you who you choose to do use as a registered agent.
Once you’ve chosen your registered agent, it’s time to file your articles of organization. The form is found on the Vermont Secretary of State website, and it’s $125 to file online or by mail. The information you must include on this form includes the following:
- Name of the LLC you already reserved
- Address of LLC
- Registered agent name
- Address of registered agent
- Signature of registered agent
- What the business does
- The fiscal year of the LLC
- Is it member or manager-managed?
- Names and addresses of any managers
- Are organizers personally liable for LLC debts?
- Organizer addresses
If you want to expedite the process of your application, it’s recommended you apply online. The turnaround time for this method is much faster than filing paper applications. All you need to do when you file this way is include your email address, and all future communication will be via email.
Tax and Business Requirements in Vermont
The laws of business are similar in all states, but they’re important for Vermont residents. Your business needs the appropriate licenses, though you need to know the rules where you operate your business and based on the type of business you have. You might also need an Employer Identification Number from the IRS if your LLC has more than one member.
If you are a company that sells goods and uses sales tax, you have to register your LLC with the Vermont Department of Taxes. All of these registrations are easily filed online and with much effort. Finally, you’re now responsible for filing annual reports. These are due every year no later than three months after your fiscal year end. The fee required with your annual report is $35, and it can be paid online or through the mail.
Protecting yourself is necessary if you own a business in Vermont. To do this, you’ll need to file to operate as an LLC. The process is not a difficult one, but it does take several weeks to finalize. That’s only if all your information is correct when you send it in the first time.