Form a Vermont LLC
Form your Vermont LLC with the Vermont (VT) LLC formation experts at LawInc. We keep things simple and allow you to easily form your Vermont Limited Liability Company online or over the phone (800-989-5294).
Vermont LLC formation is simple with LawInc.com. Once you submit your application, we check name availability, prepare your Articles of Organization and file your paperwork with the Vermont Secretary of State. As soon as your Vermont LLC is formed, we forward you your final paperwork.
A Vermont LLC can help protect your personal assets, such as your home, car or family savings. In the event of a lawsuit or if your business should fail, your personal assets cannot be touched, assuming you have properly formed, capitalized and maintained your LLC. This limited liability feature of a Vermont LLCs is not available in a sole proprietorship or general partnership, where the business owners are personally liable for all business debts.
Let LawInc walk you through the Vermont Limited Liability Company formation process. Our clear, concise and easy to use website, helps keep things simple.
Vermont LLC Name
The first step in forming a Vermont Limited Liability Company (LLC) is selecting the business name. Vermont LLC names:
- Must contain, limited liability company, or limited company, or the abbreviation, L.L.C., LLC, L.C., or LC. Limited may be abbreviated as Ltd. And company may be abbreviated as Co.
An available Vermont LLC name may be reserved for 120 days.
LawInc.com permits you to choose up to three names and will conduct a name search for your Vermont LLC, prior to filing.
Vermont LLC Formation
Vermont LLC Filing Procedure: When forming a Vermont LLC, the Vermont Articles of Organization must be filed with the Vermont Secretary of State. The Vermont Articles of Organization must state:
- The Vermont LLC name.
- Name and address of each Vermont LLC organizer.
- Street address of Vermont registered agent.
- Street address of principle place of business.
Vermont LLC Organizers: An Vermont limited liability company can be formed by one (1) or more organizers.
Vermont LLC Members: Vermont LLCs require 1 or more members. There is no residence or age requirement. Vermont LLC members are not required to be listed in the Articles of Organization.
Vermont LLC Duration: The period of duration of a limited liability company shall be perpetual unless the Vermont Articles of Organization place a limitation on the company’s existence or until dissolution or termination.
Vermont LLC Purpose: A Vermont Limited Liability Company may be formed to transact any or all lawful businesses for which LLCs may be organized under the Law, except the business of banking or insurance.
Vermont Registered Agent: An Vermont LLC must maintain a registered agent and office to receive service of process in Vermont. The Vermont registered agent should be available, at an Vermont physical address, during normal business hours to accept important legal and tax documents on behalf of the Vermont LLC. The registered agent can either be (1) a domestic entity or a foreign entity that is registered to do business in Vermont or (2) an individual resident of the state. A Vermont LLC may not act as its own agent.
Vermont LLC Operating Agreement: After filing, it is highly advised that an operating agreement is drafted which dictates the LLC internal affairs and management. There is no set criteria, but an Vermont LLC operating agreement should reference how the Vermont LLC is managed, allocation of profits and losses and member capital contributions. The Vermont LLC operating agreement does not need to be filed.
Vermont LLC Post-Filing Requirements
Vermont LLC Annual Report: Vermont LLCs are required to file an annual report at the close of its fiscal year. It is the responsibility of the company to prepare and file its annual report in a timely manner. The Vermont Corporations Division will mail a form to the registered agent when the report is due. To file your Vermont LLC annual report online, visit: http://www.sec.state.vt.us/corps/annualreports/llc.htm
Vermont LLC Taxes
Vermont State Income Tax: The LLC tax rate for Vermont is variable, depending on Vermont taxable net income.
Federal Income Tax: An advantage of the LLC is its tax flexibility. LLC members are allowed to select how the entity will be taxed. An LLC may be classified for federal income tax purposes as either a:
- Sole proprietorship
- Partnership, or
Single member LLCs are treated the same as sole proprietorships. Profits are reported on Schedule C as part of your individual 1040 tax return. Self-employment taxes on Vermont LLC net income must be paid just as you would with any self-employment business.
Most Vermont multi-member LLCs elect to be treated as partnerships by the IRS and file IRS Form 1065. On this form, Vermont LLC profits are reported and allocated to each of the owners according to the Vermont LLC’s operating agreement. Each owner is given a Schedule K-1, which shows each owner’s share of LLC income or loss. The owner then reports and pays taxes on this income on the owner’s annual 1040 income tax return. It is important to note that as with sole proprietorships, all Vermont LLC profits are taxed to the owners, even if they are not actually distributed by the LLC. This situation can arise when the LLC needs to use its profits to pay ongoing expenses.
If pass-through taxation is not desired, an LLC may elect to be taxed as a corporation by completing IRS Form 8832. If this election is made, the LLC is taxed as a C corporation by the federal government. Because the corporate income tax rates for the first $75,000 of corporate taxable income are lower than the individual income tax rates that apply to the taxable income of non-corporate taxpayers, it is possible a net income tax savings can result from this tax election. Additionally, an LLC can be taxed like an S corporation by filing IRS Form 2553.
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. An EIN is typically required if the Vermont LLC has more than one owner or any employees.
Vermont LLC Dissolution/Cancellation
Vermont LLC Dissolution/Cancellation: In order to dissolve or cancel an Vermont LLC, the members or managers must file Articles of Termination with the Vermont Secretary of State.
Acts Triggering Vermont LLC Dissolution: A Vermont LLC can be dissolved upon the happening of one of the following:
- At a time specified in the Articles of Organization or operating agreement;
- Upon occurrence of events specified in the Articles of Organization or operating agreement;
- Consent by the specific number or percentage of members indicated in the operating agreement;
- At any time there are no members; or
- Judicial decree to dissolve by a Court.