How Much Does an LLC Cost in Vermont (Every Fee Explained)
If you're looking to start a Vermont LLC, one primary concern may be the costs involved with the business formation.
With my background as an experienced Mergers and Acquisitions specialist and a tax law degree, I'm here to guide you through all the essential fees involved in establishing a Vermont LLC.
We'll offer insights from our research on the steps and costs associated with setting up an LLC in Vermont to help you navigate the formation of your business entity.
Quick Summary
- An LLC in Vermont costs \$125 for filing the Articles of Organization.
- Once the LLC has been approved, additional costs are necessary to cover business licenses, the annual fee, taxes, registered agent service, and other documents.
- In 2022, according to Ibis World, key industries such as Real Estate, Healthcare, and Manufacturing comprised 40.4% of Vermont's GDP, indicating potential areas for LLC business opportunities.
- In my experience, obtaining an EIN and drafting an operating agreement, although optional, are highly recommended when forming an LLC.
Cost to Start an LLC in Vermont
The basic expenses that need to be covered to form an LLC in Vermont include the following:
1. LLC Formation Filing Fee (\$125 - Mandatory)
The Vermont LLC filing fee is \$125. This fee only applies when you first create your LLC with the Vermont Secretary of State.
This fee registers your LLC in Vermont and files your Vermont LLC Articles of Organization. You can file online, via mail, or in person [1].
When I tried to avail of expedited service, I learned that the state does not offer it since online applications are approved immediately.
2. Registered Agent Service Fee (\$80-\$300 – Optional)
When you file your Vermont LLC, you must employ a registered agent to act on behalf of the company.
Hiring a professional registered agent for your Vermont LLC will vary in cost based on which agency you choose. It may cost \$80 to \$300 per year.
The registered agent needs to be available during regular business hours and must have their information registered with the Vermont Department of State.
3. Name Reservation Fee (\$20 - Optional)
To reserve a business name in Vermont, you must submit an application and pay a \$20 fee. Name reservation prevents another business from using your assumed business name before you start a Vermont LLC.
Your name will be reserved up to 120 days prior to filing your LLC. You can submit your name registration on the online business service center, which I found convenient when I had to reserve a business name.
Read our article if you need to change your LLC name in Vermont.
Expenses Following the Approval of Your LLC
After your LLC has been registered, there are other expenses in the form of fees and taxes that have to be borne by the company.
1. Business License (Depending on Line of Business - Mandatory)
The state of Vermont does not require a general business license, but some LLCs may be required to obtain one based on the nature of the industry and the location of the business.
In particular, industries such as Real Estate and Rental and Leasing, Healthcare and Social Assistance, and Manufacturing, which combined represented 40.4% of Vermont's GDP in 2022, as per the Ibis World, may require professional licenses [2].
My client, who ran a medical clinic, was required to obtain a professional business license in order to legally operate in the state.
"The financial outlay for acquiring professional license differs; generally, one must successfully pass an examination, submit an application to the appropriate board, and cover all related fees associated with the professional license."
- Jon Morgan, Co-Founder & Chief Editor of Venture Smarter
2. Annual Fee (\$35/Domestic - \$140/Foreign – Mandatory)
The state of Vermont requires limited liability companies to pay an annual fee of \$35 for domestic LLCs and \$140 for foreign entities.
It's noteworthy that, in the broader context of business trends, there was a negligible 0.2% change in new business applications in December 2023 compared to December 2022 [3].
You can submit this through the online Business Service Center. The fee is due within the first three months of the year, between January 1st and April 1st [4].
3. Operating Agreement (Optional but Recommended)
There’s no associated cost to drafting an operating agreement for your LLC unless you decide to employ an attorney.
The cost of a professionally drafted operating agreement in Vermont ranges between \$100 and \$200.
I advise newcomers to the business to employ professional legal help to ensure the document is legally binding.
4. Taxes Payable (Mandatory)
Since an LLC is a pass-through entity, only the members are required to pay income taxes.
For a net income of \$10,000 or less, a 6% tax rate applies; a \$600 tax is imposed on income between \$10,001 and \$25,000 (plus 7% of excess over \$10,000); for incomes of \$25,001 and over, a tax of \$1,650 is payable (8.5% of excess over \$25,000).
5. DBA Name (\$50 - Optional)
If you plan on doing business under any name other than your legal Vermont LLC name, you can register a DBA, which costs \$50. You can register as many names as you want but you must file a separate application for each DBA name.
6. Certified Copies (\$25 - Optional)
You can order any certified copies of your LLC documents, including your LLC annual report, Articles of Organization, Operating Agreement, and more, for \$25.
Certified copies can be ordered through the State Corporations Division.
7. LLC Certificate Of Good Standing (\$25 - Optional)
You can order an LLC certificate of Good Standing from the Secretary of State for \$25.
A Good Standing certificate shows that your LLC complies with Vermont LLC and state fees to obtain a business bank account or other services [5].
I encourage clients to obtain a copy from the Secretary of State and keep the document on file with the operating agreement.
8. EIN (Free - Optional but Recommended)
An EIN costs \$0 to file and can be done online, via mail, or by phone. You will need all LLC members' full legal names, addresses, social security numbers, business names, and more.
FAQs
To Whom Do I Pay My Vermont LLC Filing Costs?
You pay your Vermont LLC filing costs to the Secretary of State’s Business Service Center via check or money order.
What is the Penalty for Filing Taxes Late in Vermont?
The penalty for filing taxes late in Vermont is 5% of the amount due each month. There is a \$50 filing fee for returns filed more than 2 months after the due date.
References:
- https://sos.vermont.gov/corporations/registration/domestic-registration/llc/
- https://www.ibisworld.com/united-states/economic-profiles/vermont/
- https://www.uschamber.com/small-business/new-business-applications-a-state-by-state-view?state=vt
- https://sos.vermont.gov/corporations/renewals-updates/reports-renewals/annual-biennial-reports/
- https://sos.vermont.gov/corporations/copies-certificates/good-standings-or-status/
