Are you about starting a business in Vermont and want to form an LLC? If YES, here are the legal requirement to start an LLC in Vermont and how much it cost.
A limited liability company (LLC) is one of the various forms of business structure. It is quite easy to start and it protects the personal assets of the owner or owners should the business be sued.
Other advantages that comes with a limited liability company is that it drastically reduces the paperwork when compared to corporations and other legal entity types, it also prevents the business from being taxed twice and gives the business more credibility. Furthermore, limited liability companies offer the easiest way of choosing the S-Corp tax designation, because they are simpler to maintain than a standard C-Corporation.
A limited liability company is usually owned by one or more persons who constitute what is known as the LLC members. An LLC that is owned by one person is known as a single-member LLC, whereas an LLC with more than one member is non as a multi-member LLC.
Here is a detailed guide on how you can form an LLC in Vermont.
A Detailed Guide on Starting an LLC in Vermont and the Cost
1. Name Your Vermont LLC: the very first step towards starting your LLC in Vermont is to choose your company name. There are certain guidelines that guide the name you can and cannot choose when trying to form an LLC in Vermont. Here are some of them.
- The name you choose much include the phrase “limited liability company” in full or in its abbreviated form (LLC or L.L.C.).
- The name must not include words that is similar to a government agency (FBI, Treasury, State Department, et al.).
- Names that contain restricted words such as Bank, Attorney, University et al., may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
- If the name you want to choose for your LLC starts with an “A” and then a space, you will have to file it via email. This is not case sensitive (that is, it does not matter if the “A” is uppercase “A” or lowercase “a”)
- Names that include “The”, “An”, “and”, or “&”: if the name you want your LLC to bear include the following, you will have to file it via mail:
“The” or “the”, “An” or “an”, “And”, “and”, or “&”
- Names that include special characters: any name that has a special character, must be filled via mail. However, Periods, commas, and apostrophes are not considered special characters. They are considered punctuation. Special characters include, –, !, @, #, $, %, ^, *,|, /, () et al.
Next, you will have to make sure that the name you want to take is available. You can check to see if the name is available on the state of Vermont website. If the name is available, you should then do a check to find out if the URL is available. If the website name is not available and you know that you will require a website, now may be the best time to change the name to something else.
2. Choose A Registered Agent In Vermont: next, you will need to nominate a registered Agent for your Vermont LLC. A registered agent is an individual or business entity who will receive important legal documents on behalf of your business. The person or business entity that you nominate as your registered agent must be resident in Vermont. Your registered agent can be yourself, an individual in your company or a third party.
3. File The Vermont Articles of Organization: in order to get your LC registered, you will need to file the Articles of Organization with the Secretary of State. You can do this in person, over the internet or by mail. When you are filing your LLC, you will need to specify if the LLC will be member managed or manager managed.
4. Create An Operating Agreement: operating agreements are not a necessity for opening an LLC in Vermont, however, it is advisable to always have an operating agreement. An operating agreement is a legal document which specifies the ownership of the LLC and the operating procedures. A well-crafted operating agreement will ensure that all the business owners are in agreement with how things will be done thus reducing the risk of a conflict in the future.
5. Get An Employer Identification Number: The Employer Identification Number, also known as EIN or Federal Tax Identification Number, serves as a means of identifying a business entity. You can see it like the social security number of the company.
6. You will need an EIN when you want to open a business bank account for the company, for Federal and State tax purposes and of course when you want to hire new employees for your company. You can obtain your EIN from the IRS free of charge after you form your company. This can be done online or by mail.