Vermont LLC, Corporation, and DBA Startup Guide

Vermont Business Facts and Environment

Vermont Business Facts

Small businesses make up a great part of Vermont’s economy. In 2014, three-fifths of the private workforce comes from companies with less than 500 employees. One of the big challenges Vermont is confronted with is the sparse population. Hence, the need to strengthen tourism in Vermont is highly imperative.

Major Companies Headquartered in Vermont

Vermont is the headquarters of many major companies including Brookshire’s, UVM Medical Center – Dermatology, Keurig Green Mountain, University of Vermont, and Casella Waste Systems.

Startup Environment

Vermont is a good place to start a new business venture because of the supportive communities and the strong and stable economy.

Vermont LLCs, Corporations, and DBAs

Step 1: Decide on a Business Structure

There are 3 basic options: a DBA, a Corporation, or an LLC. Click here to learn more about business entities.

• A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
• A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
• An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.

Step 2: Pick a Business Name

Choosing a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the fewer times you change your name the better). In Step 3 we’ll show you how to search for the name in Vermont, but we highly recommend you do the following before searching Vermont state databases:

• Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
• Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
• Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if your name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use Google at a fairly advanced level you can reasonably clear a name yourself. Tip: Search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.
• Make sure your company name choice is available by searching the Vermont Business Entity Database and doing a name search on the State of Vermont website. NOTE: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).

NOTE: Familiarize yourself with the Vermont naming guidelines. LLC entity names need to contain the words Limited Liability Company or the abbreviation LLC, and certain words are restricted or prohibited.

Restrictions on Vermont Business Name & Business Purpose

• Business names should be unique.
• Your Vermont LLC must contain one of the following designators at the end of its name:
  • LLC (most popular)
  • L.L.C.
  • LC
  • L.C.
  • Ltd. Liability Co.
  • Ltd. Liability Company
  • Limited Liability Co.
  • Limited Liability Company
• Your Vermont LLC cannot imply that it is a Corporation, Limited Partnership, or any other type of business entity besides an LLC.

Step 3: Register the Business

Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and selected your business name, here are the requirements to register your business in Vermont.

How to form an LLC in Vermont

• File the “Articles of Organization” with the Vermont Secretary of State LLC Division.
• Once the articles are filed and approved you will then need to properly organize the LLC (this also applies to “1-person LLC’s”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more.

How to Incorporate in Vermont

• File the “Articles of Incorporation” with the Vermont Secretary of State Corporate Division.
• Hold an “Organizational Meeting” to determine the percentage of ownership for each shareholder as well as resolve to do tasks like open a company bank account, pay back pre-incorporation expenses, elect S-Corporation status and more.
• Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.

NOTE: When registering a new company the Secretary of State can take several weeks to file the paperwork. You can expedite the process by hand delivering the documents directly to them or one of their field offices and paying an additional fee.

TIP: Check our order form to see how long Vermont is currently taking to process regular and expedited orders.

How to File a DBA in Vermont

• Check the state database of business names.
• Complete the DBA registration form.
• The filing fee is $50.

Optional Considerations when registering a Vermont business

• Hire a professional Registered Agent. Many people list their home or business address on the Articles of Organization or Incorporation. This can cause issues because it becomes public record (you’ll get lots of junk mail). A professional Registered Agent will provide their address and forward any important documents to you, this is also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).

Ready to register a business in Vermont?

• We specialize in registering businesses in Vermont.

Ready to Start Now? Let Us Do The Work

Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.

• Learn more about how our LLC and Incorporation services can get your business running quickly
• Read our verified reviews and 100% Satisfaction Guarantee
• Contact our friendly support team if you have any questions

Step 4: Obtain Your Federal Employer Identification Number

Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLCs and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.

To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.

TIP: We will obtain your EIN for you if we form your company.

Step 5: Open Company Bank and Credit Accounts

To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire of the steps to open a business bank account. Typically you’ll need a) your filed paperwork, b) your EIN, and c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).

Top 5 Major Banks in Vermont

• People’s United Bank
• Community Bank
• TD Bank
• Citizens Bank
• Northfield Savings Bank

Click here to view a list of our recommended banks in our Vendor Network.

TIP: Our business formation service includes a free banking resolution for your use.

Step 6: Set-up An Accounting System

Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.

Company documents generally are required to be kept for 3 years, including a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments, or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.

Review our list of Accountants, Accounting Software, and Bookkeepers in our Vendor Network.

Step 7: Obtain Licenses and Permits

Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

TIP: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.

Step 8: Hire Employees (if applicable)

If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.

Review our list of recommended Payroll Providers in our Vendor Network.

Step 9: Obtain Business Insurance

There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection.

Click here to view our list of insurance providers in our Vendor Network.

Step 10: Systemize and Organize

Prepare the business as if someone needed to take it over and run it for you. This means having a process for order fulfillment, paying bills, paying employees, paying taxes, maintaining your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.

Step 11: Branding and Marketing

Now that you’ve set up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.

Step 12: Annual and Ongoing Requirements

DBA: Your Fictitious Business Name should be valid for 5 years, with an option for renewal.

LLC: Vermont corporations are required to file a Periodic Report with the Vermont Secretary of State each year by March 31, in addition to general taxation. Information on your business’ taxes can be found here. The filing fee is $35.

Corporation: Businesses in Vermont should file a report annually by March 15 to the Division of Corporate and Consumer Services. The annual report fee is $45.

Click here to view our MyCompanyWorks Premium™ service which can automate most of your ongoing compliance tasks.

Important Vermont Contacts

Vermont Secretary of State

Corporations & Business Services (for Corporation and LLC filings)
128 State Street
Montpelier, Vermont 05633-1104
Phone: Metro Area: 802-828-2386

Vermont Taxation Departments

• Vermont Department of Taxes

Vermont Labor and Employment Departments

• Department of Labor

Vermont Startup Resources

1. Small Business Administration (SBA) Vermont District Offices

• Vermont District Office

2. SCORE Vermont

• Vermont SCORE, an all-volunteer organization, provides free mentoring to help start or grow your business. Serving VT with branches in Essex Jct., Montpelier, St. Albans, Middlebury & Rutland.

3. Vermont Legal Statutes

• Vermont Business Corporation Act – note this is the broad code that includes various other topics including Vermont’s business corporations.
• Vermont Limited Liability Companies – the specific act that applies to Vermont LLC’s.
• Vermont Statutes and Rules For All Professions – Title 3 of the Vermont Statutes and the Office of Professional Regulation (OPR) Administrative Rules apply to all of the professions connected to OPR.

4. Vermont Chambers of Commerce

• Vermont Chambers of Commerce
• Central Vermont Chamber of Commerce
• Franklin County Regional Chamber of Commerce
• Lake Champlain Regional Chamber of Commerce
• White River Valley Chamber Of Commerce

5. Statewide Business Portal

• In an effort to better serve Vermonters, the state of Vermont is developing an online tool that will allow you to start your business in Vermont, smarter, faster, and more reliably than ever before.

6. Vermont Angel Investors

• List of Angel Investors in Vermont

7. Vermont Business News

• Vermont Business Magazine

8. ACCD

• Agency of Commerce and Community Development (ACCD) encompasses three major state departments and many programs that serve the Vermont public by enhancing the Vermont business climate, marketing Vermont to tourists and others, and strengthening our communities in a wide variety of ways.

9. Vermont Small Business Development Center

• Vermont Small Business Development Center (VtSBDC) is a statewide program of the Vermont State Colleges, hosted by Vermont Technical College. VtSBDC is funded in part by the U.S. Small Business Administration and the State of Vermont Agency of Commerce and Community Development and nationally accredited by the Association of Small Business Development Centers.

10. Vermont Green Business Program

• While the Department of Environmental Conservation (DEC) issues most of the state’s environmental permits, the Department does more than just set forth regulations and assure compliance.