Vermont’s limited liability law took effect in 1996. The law, which is a part of the Vermont Statutes, outlines the requirements for creating a limited liability company, or LLC, in the state. LLC owners are called members. An LLC structure generally protects members from personal liability resulting from lawsuits, bankruptcy or other business obligations.
One or more persons can form an LLC for any purpose; however, LLCs cannot transact business as banks, credit unions, savings and loan associations, insurance companies or railroad companies. If an LLC is formed to offer a professional service, it must abide by the state licensing laws of the profession and Vermont’s professional corporation law.
LLCs formed in Vermont must contain the words "limited liability company" or "limited company" in the company name, or the abbreviations “L.L.C.,” “LLC,” “LC” or “L.C.” The name must not be in use by another company in the state. Vermont has a searchable database of registered companies you can use to make sure the name you choose for your LLC is not in use (see Resources). If you want to ensure that no one else uses the name before you do, you can reserve the name for up to 120 days. As of 2010, the fee for this service is $20. The form for reserving a name is available online (see Resources).
A Vermont LLC is required to have a registered agent to receive service of process documents from the state. In Vermont, this person or entity is also referred to as a "process agent." Registered agents must have an address in the state and be legal residents of Vermont. If the registered agent is a business entity, it must be authorized to do business in the state.
Articles of Organization
The primary document used for forming an LLC in Vermont is the Articles of Organization. It is a simple document that includes the name of the company, the name and address of the registered agent and the organizer. An organizer forms the LLC but does not have to be a member. The form requires that the LLC designate if it will managed by members or managers. The managers' or managing members' names and addresses must be included on the form. An LLC also designates the end of their fiscal year on the form. Professional LLCs are required to attach copies of their licenses to the document. As of 2010, the filing fee for the form is $100. The form is available online (see References).
Vermont LLCs are required to file annual reports. The reports are due within two-and-a-half months before the end of the LLC’s fiscal year. The state mails a notice to the registered agent to remind LLC members when the report is due. The annual report can be filed online or printed out after you complete a Web-based form (see Resources). As of 2010, the filing fee for annual reports is $25.
If you have employees, you must provide worker’s compensation insurance per Vermont statutes. The Vermont Department of Labor oversees worker’s compensation in the state. Forms and publications about requirements are available online (see Resources).