Starting a business is exciting, but there are certain hoops you have to jump through to get everything set up legally in Vermont. For starters, you need to pick a registered agent. A registered agent is a person or company that accepts documents on behalf of your company.
A registered agent must be listed on your Articles of Organization, which are the official documents filed with the state to start your company. If you’re feeling a little overwhelmed, don’t worry. This guide is meant to help.
We’ll explain how a Vermont LLC is formed, how a registered agent fits in the process, and what other steps the state requires to set up a business.
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How is an LLC formed in Vermont?
When an owner is ready to form a Vermont LLC, here are the steps to follow, which include selecting a qualified registered agent:
1. Name the company
Before making any decisions or filing any paperwork, you must create a company name. Maybe you’ve had a name in mind for months or maybe you’re still thinking over a few options.
Before you settle on a name, it’s important to know that the state has a few rules when it comes to selecting a company name. First and foremost, the company name can’t already be in use. Every business name in Vermont must be unique, so if the name is already taken you’ll have to come up with a new name.
To check availability, go to the Vermont Secretary of State’s website and conduct a business search.
Entrepreneurs have the option to reserve a name for up to 120 days too. If you want to reserve the name while it’s available and wait to file the Articles of Organization for a few months you can do so.
A name’s availability is one of the items on your naming checklist. The State of Vermont has additional rules that you should know about. The rules in Vermont are similar to the naming rules in other states. The rules are:
- The company name must include the words “Limited Liability Company” or “LLC” in the title.
- No company name can confuse the public into thinking it’s a government agency or is associated with one.
- Certain names may require additional approval. Names that make a claim, for example, are usually scrutinized more closely. A financial institution or an academy would likely warrant further approval.
Take a moment to check on the availability of a website domain that matches the company name too. Most businesses want their website URL to match the company name, but if that domain isn’t available it’s best to know before settling on a name.
2. Pick a registered agent
A registered agent is a person or company that agrees to receive documents for your company. These documents are often confidential, which is why selecting a registered agent should be done with care. Whether you decide to elect yourself, another employee, or pay a registered agent service to fill the role, it’s important to talk with a person or company first.
The person or company should understand what being a registered agent means and give consent to serve in this capacity for your company.
3. File the Articles of Organization
With a company name selected and a carefully appointed registered agent in mind, it’s time to fill out the Articles of Organization. This document is known as an LLC formation document and is the only way to legally establish a company in the State of Vermont.
This document, which can be filed online or by mail, will ask for the company name, the company address, the registered agent’s name, the registered agent’s address, the purpose of the LLC, a list of managing members, the company start date, and a company end date, if applicable. The LLC organizer, which is usually the owner, must sign it and submit it to the Vermont Secretary of State.
Every state charges a fee to file LLC formation documents. In Vermont, the cost is $125.
Vermont has a quick processing time for these documents. If your Articles of Organization are filed online, it can be approved in one to two days. If it’s sent via the postal service, it will take seven to ten days for the approval process.
Once the state approves this document, you will officially be a Vermont LLC owner.
4. Create a company operating agreement
Every business, no matter its size, offerings, or experience in the market, should create an operating agreement. An operating agreement explains a manager’s roles, explores the decision-making process, and clearly explains how profits and losses are handled.
The state doesn’t require a copy of the agreement, but creating one before officially opening to the public is best.
5. Obtain an EIN
With the Articles of Organization filed and an operating agreement created, next on the checklist is to get an EIN, or employer identification number. This number is given out by the IRS. As you might expect, the number is needed to pay business taxes but it’s also needed to pay employees, open business bank accounts, and apply for a business loan.
To get your unique EIN, simply log on to the IRS website, answer a few questions, and you’ll receive it at the end of the session. The process takes about 5-10 minutes.
6. File an annual report
Most states require LLCs to file an annual report and Vermont is no different. The report is filed with the Vermont Secretary of State Corporations Division. The filing fee is $35.
What is a Vermont registered agent?
A Vermont registered agent is a person or company that agrees to accept official documents for your company. These documents may be tax notices, court documents, or service of process papers that are served during a lawsuit.
Given the importance of this job, the person or company selected should be trustworthy and reliable. The company owner decides who will fill this role.
Do I really need a registered agent in Vermont?
Yes. The State of Vermont requires every LLC to keep a registered agent on file. Vermont is not alone with this stipulation; every state requires LLCs to select a registered agent.
Can I be my own registered agent in Vermont?
Yes. The company owner can be the company’s registered agent. In many cases, owners do list themselves as their businesses agent, especially if they work from the company office. However, some owners select an employee or even pay for a registered agent service to handle the tasks associated with this title.
Who can be a registered agent in Vermont?
A Vermont registered agent could be the owner, but it can also be a friend, coworker, or neighbor. A registered agent can be another Vermont company too, which includes a registered agent service. A registered agent service is a professional company that serves as your company’s registered agent for a fee.
To be a registered agent in the State of Vermont, the person or company must:
- Have a physical street address, not a P.O. box
- Be in good standing with the state, if a business is selected
- Be available during regular business hours to receive correspondence
Why would a company choose to work with a registered agent service?
For those weighing the decision to hire a registered agent service, it’s good to explore some of the benefits of such a service. Many business owners decide to put a registered agent service in charge of its delivered documents. Here are some of the reasons owners opt for a service as opposed to selecting another person:
- Availability. A registered agent should be at a specific address during regular business hours, and for some owners, that’s a challenge. Between meetings, travel, or juggling other responsibilities, some owners aren’t available during the day to receive documents as needed. For that reason, a service is used.
- Peace of mind. Owners often say that appointing a registered agent gives them peace of mind. Knowing the service will contact the owner if documents are received provides simple comfort.
- Privacy. Some documents received by a registered agent are confidential. For example, if your company is sued, a registered agent is publicly “served,” which can be embarrassing. To ensure the highest level of privacy, some owners prefer these documents to be handled offsite.
List of Vermont registered agent services
Wondering which Vermont registered agent service to go with? There are plenty to choose from. To help narrow the search, here’s a look at three options, all of which offer multiple services including registered agent services.
- Incfile.com: Incfile.com can help entrepreneurs file their LLC formation paperwork and serve as the company’s registered agent. The online company offers a host of beneficial business services that includes filing reports and other necessary documents with the state. The first year is free. After that, it’s $119 a year.
- Northwest Registered Agent: For $125 a year, Northwest Registered Agent offers an online portal, real-time updates when mail is received, and pricing that remains the same each year. The company offers its services in several states and has years of experience in the field. Additional business services are also offered.
- Swyft Filings: Swyft Filings offers registered agent services that start at $149 a year. Users get an online dashboard, report and filing reminders, and secure document storage for this fee. In addition, the company has a buffet of other business services available when you have a need.
How much does a registered agent service cost in Vermont?
A registered agent service is an additional expense for a newly-formed business, but many owners say the small fee is worth it. Fees will vary, depending on what kind of services an owner wants to take advantage of.
Basic services that include mail forwarding and notifications run about $50 a year. For services beyond that, expect to pay upwards of $100-200 annually.
How does an owner select a registered agent in Vermont?
Selecting a registered agent is as simple as listing a person or company on LLC formation documents.
Can a company change its registered agent?
Yes. A company owner can update its registered agent with the secretary of state by filing a change form and paying a $25 filing fee. The change will be made within several days.
What’s a statutory agent?
Statutory agent means the same thing as registered agent. The name varies by state. In Vermont, the title registered agent is used.
What’s a commercial registered agent?
A commercial agent usually refers to a registered agent service. If you’re asked whether or not you have a commercial or non-commercial agent, the answer is commercial if you have a service and non-commercial if you or an employee fill the role.