If you are planning to start your own business in Vermont, you will most likely choose to open an LLC. This form of business structure is very popular for startups, as it offers liability protection for you and for members of your LLC in case of a lawsuit or bankruptcy.
So how much is an LLC in Vermont? What taxes and LLC fees in Vermont should you expect? Let's talk about this in detail and consider all other costs you need to keep in mind to successfully start your business in Vermont.
If you're planning to form an LLC in Vermont on your own, you can also read our step-by-step guide here.
Table of Content
First, let's understand the main costs associated with Vermont LLC registration. Note that there are no differences in the cost of registration for both domestic and foreign LLCs in the state. However, the registration forms and annual report fees are slightly different.
You can register online on the Vermont Secretary of State's website or request and download Form LLC-1(D) (for domestic LLCs) in PDF, complete it, and mail it to the following address:
Vermont Secretary of State
128 State St.
Montpelier, VT 05633
Online filing usually takes no more than 1 day. Note that you will need to allow from 7 to 10 business days if you're going to file by mail.
Getting back to our main question of how much an LLC is in Vermont, let's take a look at the main fees you will need to pay to register:
|Articles of Organization (for domestic LLCs)||$125|
|Certificate of Authority (for foreign LLCs)||$125|
|Annual Report (for domestic LLCs)||$35/year|
|Annual Report (for foreign LLCs)||$140/year|
|LLC Name Reservation||$20|
|Assumed Business Name Registration||$50|
|Certified Document Copies||$25|
|Certificate of Fact||$25|
|Registered Agent Resignation||$0|
Now let's look at other mandatory and optional Vermont LLC fees.
To open an LLC in the state of Vermont, you will need to fill out and file Articles of Organization (for domestic LLCs) with the Secretary of State. This registration document includes the following basic information about your company:
You can fill out the form online and pay the corresponding filing fee of $125. You can also mail the form along with an included check for payment.
Under Vermont law, every LLC in the state is required to file an annual report to verify basic information and key facts about the company, including the names and addresses of the registered agent, directors, and managers of the LLC.
You can file your annual report online or by mail by submitting the document to the following address:
Vermont Secretary of State
128 State St.
Montpelier, VT 05633-1104
According to the official website of the state, you must file your annual report within the first three months following the fiscal year end on record. The annual report fee is $35 (for domestic LLCs) and $140 for foreign LLCs.
If you do not file your annual report on time, you will have to pay an additional $25 late fee. In this case, you will also lose your good standing with the state, and repeated delays can lead to the dissolution of your LLC.
In Vermont, just like in any other state, every LLC owner must, by law, designate and maintain a registered agent (RA). This is a person or commercial business entity that will receive important legal/tax documents on behalf of your company.
Under Vermont law, you can also be your own RA for the LLC. Alternatively, this can also be any trusted person over the age of 18 that has a permanent physical address in the state.
However, if you want to save time and avoid possible errors, it's much more convenient to hire a professional RA or business formation company that provides registered agent services.
The advantages of such a solution are as follows:
The average cost of a registered agent ranges from $99 to $300 per year. However, you can also find cheaper offers from various business formation companies if you hire the to form an LLC in Vermont.
When choosing an RA, pay attention to the experience and reputation of the company, as an unreliable business partner may be unavailable to receive documents for your company or may forget to notify you about an important event at the right time.
This can negatively affect your business reputation and lead to financial losses, e.g. if someone files a lawsuit against you, and you will not be aware of the court hearing.
If you already have an LLC in another state but want to expand your business into Vermont, you can register as a foreign LLC. Conveniently, the cost of registering a foreign LLC in Vermont is no different from registering a domestic company ($125).
However, it's important to be careful when completing your Certificate of Authority, as this document is slightly different from the Articles of Organization (for domestic LLCs). Also, be sure to research what other taxes and fees you will need to pay for your foreign LLC.
A Vermont professional limited liability company (PLLC) is a specialized type of business entity that is usually formed by licensed professionals who want to provide their services in the state. This requires each member to obtain a professional business license.
In Vermont, PLLCs are typically formed by the following licensed professionals:
Other professions may also be included in this list. If you are unsure whether you need a license to practice in the state of Vermont and whether you will need to register a PLLC, contact a local business lawyer.
To register a Vermont PLLC, you have to:
In some cases, you may also be required to deliver a certified copy of your PLLC Articles of Organization to each Vermont licensing board with jurisdiction over the professional service(s) provided by your PLLC.
You can find more information about professional business licenses on the official website of the state.
In the state of Vermont, each LLC must file an income tax return with the Vermont Department of Revenue. The due date is by the 15th day of the third month following the close of the tax year.
For domestic LLCs that operate exclusively in Vermont, the minimum tax amount is $250.
Vermont LLC annual fees for out-of-state owners or other owners filing consolidated returns can be calculated by following the instructions on the Vermont Department of Revenue website.
The following is a summary of this and other types of taxes for LLCs and LLC members.
This means that, as a business owner, you will have to pay state income tax on any money you pay yourself.
Depending on how much you make, you will also be subject to Vermont's standard state income tax rates, varying from 3.4% to 8.8%. You can also apply all standard surcharges and deductions when you file your tax return.
Vermont also requires all LLCs operating in the state to pay a sales tax of 6% (collected at the point of purchase) on all physical products sold and services provided by the LLC. The sales tax may vary depending on the region, county, or city of your business.
Every member who takes profits from the LLC is required to pay self-employment tax. The current rate is 15.3%. The tax is also called the Social Security or Medicare tax.
This type of tax applies to all income of LLC members or managers.
If you hire employees for your company, you will also have to collect and withhold payroll tax from all employees at the time of payroll. Thus, employers in Vermont pay payroll tax on any wages they pay to employees.
In addition, each of your employees will be required to file an individual tax return.
Vermont doesn’t require companies to get a general business license. However, depending on your city, you may still need one. That's why, based on your business’s location, you need to understand exactly what licenses or permits you may need.
Visit the Secretary of State's website or the Department of Taxes to get your sales tax permit. There are no fees when applying for a Vermont LLC business license.
You may also need a professional business license or permit for certain types of businesses. You can find out if you need such documents and how to obtain them from the Vermont Office of Professional Regulation (OPR).
Depending on your industry and geographical location, you may also need additional local licenses and permits at the city or county level in Vermont.
For example, in the city of Burlington, restaurants, street vendors, etc. are required to obtain a general business license.
For more information on whether you need a local business license, visit your city's or county's website. You can also contact your county clerk or local tax office.
You already have an idea of the main costs associated with company registration in Vermont. However, there are some additional fees that can also affect the total Vermont LLC cost.
If you're not ready to open your venture at the moment, you can reserve your chosen and available business name in advance before filing the Articles of Organization. The reservation period is up to 120 days. The fee is $20.
You can reserve the name online at the Vermont Secretary of State's website.
If you want to use a name other than your official company name for marketing purposes, you can register an assumed name or “doing business as” (DBA) name. For this, you should file an Assumed Business Name Registration online.
You can always change your assumed business name without registering a new legal entity if you wish. The filing fee is $50.
You can get certified document copies in the state of Vermont any time you want. Simply order them through the Secretary of State's website. The state fee is $25.
Certified copies may be required for certain types of transactions, investment solicitations, and PLLCs for submission to state professional licensing agencies.
You can obtain a Certificate of Fact (otherwise known as a Certificate of Good Standing) in the state of Vermont by ordering one from the Secretary of State's website and paying the $25 fee.
The certificate is often required by banks and lending institutions when opening a separate business account or granting business loans.