Form a Vermont Corporation
Incorporate Vermont Online: Form a Vermont (VT) corporation. Incorporate in Vermont online with the Vermont incorporation experts at LawInc.com Forming a Vermont corporation has never been simpler. We will help you form a Vermont corporation, the right way. To simply incorporate in Vermont, click on “Order Now.” Please feel free to call us, anytime, with any questions. Incorporate Vermont today.
Incorporating in Vermont
Incorporating a Vermont corporation can be vital to businesses based of Vermont. At LawInc, we prepare your Vermont corporation Articles of Incorporation, bylaws, stock certificates, stock ledger and more. We can even obtain your Vermont corporation Tax ID number and file your Vermont S corporation election with the IRS.
Vermont Incorporation Information
The following Vermont incorporation information will likely be helpful when deciding to incorporate in Vermont.
Vermont Corporation Name
The first step in forming a Vermont corporation is selecting the business name. Vermont corporation names:
- Must contain “Corporation”, “Incorporated”, “Company”, “Limited”, “Corp.”, “Inc.”, “Co.” or “Ltd.”.
- Must be distinguishable upon the records of the Vermont Secretary of State from any other formally organized entity registered with the Vermont Secretary of State’s office, such as corporations, limited liability companies, limited partnerships, and limited liability partnerships.
- May not imply that it will conduct business as a bank, trust company, insurance company or public service company unless it proposes in fact to engage in such special kind of business.
An available Vermont corporation name may be reserved with the Vermont Secretary of State for a 120 day period.
LawInc.com permits you to choose up to three names and will conduct a name search for your Vermont corporation, prior to filing.
Vermont Corporation Formation
Vermont Filing Procedure: To incorporate in Vermont, you must file Vermont Articles of Incorporation with the Vermont Secretary of State.
Vermont Corporation Articles of Incorporation: The Vermont Articles of incorporation should include:
- Name of the Vermont corporation.
- Purpose of the Vermont corporation.
- Principle office address of the Vermont corporation.
- Number and class of shares the Vermont corporation will have the authority to issue.
- Name and addresses of the initial directors of the Vermont corporation.
- Name and physical address of the Vermont corporation’s registered agent.
- Name and address of each Vermont corporation incorporator.
Vermont Corporation Filing Fee: The Vermont corporation filing fee is $75.
Vermont Corporation Authorized Shares: There is no minimum or maximum number of authorized shares since state incorporation fees are not based on the share structure.
Vermont Corporation Incorporator: Minimum number of incorporators is one (1) (an individual or entity) and there is no requirement that an incorporator be a resident of Vermont.
Vermont Corporation Directors: The board of directors must consist of three (3) or more individuals except that if there are less than three (3) shareholders, the number of directors may be as few as the number of shareholders.
Vermont Corporation 1244 Stock: Election to have stock classified as IRC Section 1244 stock allows for a substantially larger application of the deduction from business losses to ordinary income than regular stock. With regular stock, you can only offset $3,000 against ordinary income. With the issuance of Section 1244 Stock, the corporation can claim an ordinary loss deduction of as much $100,000.
Vermont Registered Agent: When incorporating in Vermont, a Vermont corporation must maintain a registered agent and office to receive service of process in Vermont. The Vermont registered agent should be available, at a Vermont physical address, during normal business hours to accept important legal and tax documents on behalf of the Vermont corporation. The registered agent can either be (1) an individual with a physical Vermont address or (2) a corporation authorized to serve as registered agent.
Vermont Corporation Post-Filing Requirements
Vermont Corporation Annual Report and Annual Registration Fee: Vermont corporations must file an annual report which is due two and a half months from the end of the Vermont corporation’s fiscal year end. For most corporations, the due date is March 15th. The fee is $35. The late fee is $25. To file the Vermont corporation annual report, visit: http://www.sec.state.vt.us/corps/annualreports/intro.htm.
Vermont Corporate Minutes: Vermont corporations should hold and document annual shareholder and director meetings.
Vermont Corporation Taxes
Vermont Corporation Taxes: For information on Vermont income tax ,visit: http://www.state.vt.us/tax/index.shtml.
Vermont C Corporation: When incorporating in Vermont, all Vermont corporations formed by default are “C” corporations. A Vermont C corporation is a Vermont corporation that has not made an election to be an “S” corporation. The term C corporation is specifically used because the entity is taxed under subsection C of the IRS code. Vermont C corporations are taxed at two levels (“double taxation”). This means that the corporation itself pays its own tax when it makes money (the first tax). The owners or shareholders are then taxed again when they are paid a salary or dividend by the corporation (the second tax). Despite double taxation, Vermont C corporations offer many planning and benefit opportunities.
Vermont S Corporation: A Vermont S corporation is a corporation that has made an election with the IRS to be treated for tax purposes as a “pass-through entity.” This means that corporate profits and losses are passed through to the shareholders (owners) who report them on their own personal tax returns and pay the tax at the individual level. The corporation pays no federal income tax at the corporate level. Vermont S corporations are not subject to the double taxation C corporations encounter. The State of Vermont recognizes federal S corporation status.
These are the 3 main advantages of forming a Vermont S corporation:
- No double taxation: One of the main advantages of Vermont S corporation status is that it avoids the double taxation that occurs with a regular Vermont C corporation. In a Vermont C corporation, the corporation pays income tax on its profits and, if those profits are distributed to shareholders, the shareholders pay income tax on the distribution.
- Loss deductions: The availability of losses. Shareholders of a Vermont S corporation generally may deduct their share of the corporation’s net operating loss on their individual tax returns in the year the loss occurs. Losses of a Vermont C corporation, however, may offset only the corporation’s earnings.
- Self-employment tax savings: By electing S corporation status, only the earnings actually paid out to you as salary are subject to payroll taxes; money left in the business is not subject to payroll taxes or self-employment tax. All income passes through, but its tax status depends on whether it is classified as salary or ordinary income.
Federal Tax Identification Number/Employer Identification Number (EIN): The Federal Tax Identification Number, also known as the Employer Identification Number (EIN) is a number that is assigned to a business by the Internal Revenue Service. An EIN is like a Social Security Number for a business. It is a requisite for certain business functions such as opening bank accounts or hiring employees. When incorporating in Vermont, Vermont corporations should obtain an EIN. The federal taxpayer identification number of the corporation should be included in the Articles of Incorporation. However, the failure to include the number will not cause the Secretary of State to reject the Articles of Incorporation for filing.
Vermont Corporation Dissolution
Vermont Corporation State Dissolution Requirements: A Vermont corporation can be voluntarily dissolved by filing Articles of Dissolution with the Vermont Secretary of State. The fee to dissolve a Vermont corporation is $20. You are not required to obtain a Vermont Department of Taxes clearance before dissolving a Vermont corporation.
Vermont Corporation Federal/IRS Dissolution Requirements: Corporations are required to file IRS Form 966, Corporate Dissolution or Liquidation. A final tax return should be filed with the IRS. Form 966 should be filed along with the final tax return. Final state tax returns may also need to be filed. Follow up with an accountant regarding all tax related requirements.