For anyone who plans to start up a business, an LLC may be a consideration. For business owners living in Vermont and planning to create an LLC, it is important to know which laws to follow and what kinds of requirements they are going to have. Then they can get their LLC off the ground quickly and efficiently, so they can focus on the running of the business and their bottom line. In most states, getting started with an LLC is not that difficult, as long as the owner follows proper steps and procedures.

Getting Started

Naming an LLC in Vermont

Any LLC needs a name, but the owner has to be sure that name does not belong to any other company. They can search for a name online to see if it’s already taken, but even if no one is using the name they want it may still be restricted. First, it has to have the words “Limited Liability Company” in it, or the abbreviation “LLC” or “L.L.C.” Additionally, any restricted words that they want to use require additional paperwork to get their name accepted, and there are some words that they can’t use at all because they are prohibited. Those words can only be used by state or federal agencies. They should also check to see if the domain name they want is available, since most businesses want a website for their company.

Selecting a Registered/Statutory Agent

A registered, or statutory, agent is someone designated to collect or receive important mail and other documents for someone else. In Vermont, a person who resides in the state or a corporation that is authorized to do business in the state can be a registered agent. That means the owner of an LLC can choose nearly anyone or any company, as long as they are in the state of Vermont or can do business there. When an LLC chooses a registered agent, it’s important to get one that will be available all the time in some capacity, so they don’t miss out on important documents or other official matters.

Filing Articles of Organization

The fee for filing the Articles of Organization for a Vermont LLC is $125, and that fee is non-refundable. Be sure to have everything ready when filing, so there is less chance of a problem. Owners can file online, which makes the process easier and removes some of the guesswork about what they’ll need to provide and the information the state requires from them.

Creating an Operating Agreement

Like many states, Vermont doesn’t require an operating agreement for owners to form an LLC. That’s good news, because it’s less money and less paperwork for them to address as you set up their company.

Running Your Business

Getting Your EIN

What’s an EIN?

An EIN is an employee identification number, issued by the Internal Revenue service. Sometimes it is also called a Federal Tax Identification Number. It’s a unique number issued to each business.

You’ll need an EIN to

  1. Open a business bank account.
  2. File Federal and State Taxes
  3. Hire employees.

Before you get your EIN:

  1. Make sure your new business has been properly formed before applying.
  2. Be wary of paid sites. EINs are free direct from the IRS.

How do I get an EIN?

  1. Apply online: The easiest way is to apply online for an EIN. Note, the IRS website has office hours, and is only available Monday through Friday, 7am to 10pm. Yes, we also agree this is one of the most ridiculous things we’ve ever seen.
  2. Call: You can call 1-800-829-4933, between 7am to 7pm of your time zone, Monday to Friday.
  3. Snail Mail – You can download the form and mail it in.

Keep Business and Personal Accounts Separate

  1. Get a business bank account for your business. This will help you protect your personal assets from potential creditors and lawsuits, and will also make life A LOT easier come tax time.
  2. Get a business credit or debit card. This will help you keep your expenses separate and easier to track.

Accounting

No matter what business you run, accounting software and processes is a must for any small business. If you have an accountant, ask them which software they work with and recommend.

A good accounting system is necessary to:

  1. Track income and expenses, so you can easily see if you’re making money
  2. Makes filing income taxes so much easier.

Always try and find something that will:

  1. Sync with all of your bank and credit card accounts automatically – not just downloads, but auto sync.
  2. Automatch vendors, customers and other accounts.
  3. Let you accept credit cards and ach drafts with ease.

Setting Up for Taxes in Vermont

To have employees at a business, file taxes, or open a company bank account, LLC owners need to get an EIN, and the state of Vermont also recommends that they use accounting software to reduce the risk of making mistakes. Both of those are important right from the beginning. From that point they can get their business moving forward, but there are still tax and insurance issues to address.

Unemployment

They will need to register for unemployment insurance tax, which is a requirement of the state.

Income

The employee withholding tax is necessary to ensure taxes are being taken out of employees’ paychecks and paid to the proper agencies.

Sales Tax

If the LLC is selling goods or services that the state of Vermont considers taxable they have to register for sales tax.

In addition to all that, LLC owners need to make sure they file for any city, county, state, or federal permits that they need to operate their business legally. These permits are important, and owners should make note of when and if they need to be renewed, so they don’t end up missing a deadline in the future.

Getting Insurance for your LLC

Workers’ Compensation insurance is required for LLCs in Vermont. There may be other types of insurance owners also want to have for their business, but they aren’t required. Owners should consider the type of business they’re operating and the level of risk they have to decide if other insurance types are right for them.

Keeping Your LLC Compliant

Owners must also make sure they hire new employees carefully, and that those employees are authorized to work in the United States. They’ll also want to be sure they are reported to the state as a “new hire,” and provided with workers’ compensation insurance. Taxes must be withheld from them, and the business must create compliance posters and ensure that employees receive increments. Owners must file an annual report, which is due two and a half months after the end of the fiscal year. They can file online, and the fee is $35. They can also request a Certificate of Good Standing, which has a $25 fee.

How to File a Foreign LLC in Vermont

Filing a foreign LLC in Vermont is possible. It can be done online, and the fee is $125.