How to Start a Business in Vermont:
Forming a business in Vermont can be conveniently done online. All types of business entities except for sole proprietorships must file with the state. While Vermont does not require a general business license at the state level, many cities do have a general business license requirement. Registering business tax accounts and reporting new hires can also be done online.
Form your business.
Review Vermont formation options.
Vermont offers 4 main ways of forming your business. Review these closely and pick the one that fits your business best.
Name your business.
Before registering your business under your chosen name or reserving a business name, you need to check whether that name is available for you to use. You can do this by performing a business entity search on the Vermont Secretary of State (SOS) Corporate Division webpage and searching the trademark database on the United States Patent and Trademark Office (USPTO) website.
To reserve a business name, you can either submit a completed Application to Reserve a Specified Business Name along with a filing fee of $20 by mail or in-person to the Vermont SOS Corporate Division or apply through the Online Business Service Center.
To file a name reservation online, visit the Online Business Service Center and create a user account.
Log onto your account and select "Name Reservation" in the "Corporate Online Services" section in the menu.
You will be prompted to enter your business name choices, details about the business, and details about the applicant.
Once you've entered the required information, provide an authorizing signature (typed) and click on "Continue."
Review the summary of the application that is displayed next and ensure that all the information is correct.
Click "Proceed to Pay" to pay a filing fee of $20 and submit the application.
If you need help finding a business name, be sure to check out NameSnack's free business name generator.
Register an assumed business name.
If you plan on doing business under a name that differs from the legal name of your business, you must register an assumed business name with the state. If you are forming a sole proprietorship or partnership and wish to operate the business using a name other than the proper name(s) of the business owner(s), this is the first step to forming your business.
You can file an assumed business name registration by completing an application and submitting it by mail or by filing online. The filing fee is $50.00.
If you are forming a legal entity, such as an LLC or corporation, you can only register an assumed name once your business entity has been registered with the Vermont SOS Corporate Division.
Get an employer identification number.
Nearly all businesses will need to register for federal taxes by applying for an employer identification number.
Register your business in Vermont.
Except for sole proprietorships, all business types must file with the Vermont Secretary of State to register their business. General partnerships must file a Statement of Partnership Authority while corporations and limited liability companies must file articles of incorporation and articles of organization, respectively. Applications can be submitted by mail or filed online.
Visit the Vermont SOS Online Business Service Center and create a user account.
Log in and select "VT Sec of State Online Services" in the main menu and click on "Start or Register Your Business."
Next, select the type of business you want to register.
Follow the prompts and enter the required information.
Once you have completed the application, you will have to verify that all the information you provided is correct.
Click "Proceed to Pay" to pay the applicable filing fee.
Submit the filing.
Obtain necessary permits and licenses.
In Vermont, there is no general business license on a state-level. However, many cities in Vermont do have general business license requirements. Certain services, such as accountants and barbershops, must obtain a professional license to operate.
Find more information about professional licensing requirements, permits for building and construction businesses, as well as environmental permits on vermont.gov.
Register your business for taxes.
Register with the Vermont Department of Taxes.
Register for a business tax account with the Vermont Department of Taxes. You can register a business tax account through the Vermont Online Business Service Center or directly with the Department of Taxes.
To register with the Vermont Department of Taxes:
- Obtain an Application for Business Tax Account.
- Complete the application.
- Submit the application by mail or fax.
Alternatively, register online through the online portal myVTax or through the Vermont SOS Online Business Service Center, where you will be given the option to register with a business tax account after registering a new business.
You will need the following information:
- Taxpayer ID.
- Taxpayer name.
- Taxpayer mailing and location address.
- Account name(s).
- Account mailing and location address(s).
- Account start date and other relevant attributes.
- Location information (sales & use and meals & rooms only).
- Names, addresses, and identification numbers of your business principals.
You will have to complete and submit a separate form for each tax account you wish to register.
Register for Vermont sales and use tax.
If your business sells tangible personal property, you must register for a sales and use tax license. You can register by completing and submitting an Application for Business Tax Account by mail or fax, or register through the online portal myVTax.
When completing the account application section (BR-400B) on the Application for Business Tax Account form, only check one tax type (only "Sales and Use") at the top of the page before completing the rest of the application.
Register for Vermont meals and rooms tax.
If your business sells meals, serves alcohol, or rents rooms to the public, you must register for meals and rooms tax. You can register by completing and submitting an Application for Business Tax Account by mail or fax, or register through the online portal myVTax.
When completing the account application section (BR-400B) on the Application for Business Tax Account form, only check one tax type (only "Meals and Rooms") at the top of the page before completing the rest of the application.
Register for withholding tax.
If your business employs individuals in Vermont and pays wages, pensions, annuities, and other payments, you must register for withholding tax. You can register by completing and submitting an Application for Business Tax Account by mail or fax, or register through the online portal myVTax.
When completing the account application section (BR-400B) on the Application for Business Tax Account form, only check one tax type (only "Withholding") at the top of the page before completing the rest of the application.
Report new hires and get insurance.
File new hire reports.
New hire reporting is mandatory in Vermont and reports must be filed within 10 days of employment. This can be done by completing a C-61 New Hire Reporting Form and submitting it by mail or completing and submitting reports electronically through the Department of Labor Employer Online Services.
Information needed to complete a new hire report includes:
- Employer name.
- Employer address.
- Federal Employer Identification Number.
- Employee name.
- Employee address.
- Employee SSN.
- Date of hire (first date when services were performed for compensation).
Obtain mandatory insurance coverage.
Employers in Vermont are required to have workers' compensation and unemployment insurance.
Vermont Business Types:
1. Sole proprietorship.
Vermont sole proprietorships have simple taxation rules and are not expensive to form. They do not have to register with the state but must register an assumed name if they want to operate under a name that differs from their legal business name (the owner's name). The one major disadvantage is that the owner is not protected from liability.
2. General partnership.
A Vermont general partnership is similarly inexpensive to set up and qualifies for pass-through taxation. While it is possible to form a partnership without a written agreement or declaration in Vermont, this poses a risk for each partner as they can be held liable both individually and together for any debts or losses incurred by the business.
It is therefore advisable to create and file a partnership agreement, which defines the structure of the partnership, including management responsibilities of each partner and the allocation of profits and losses, with the state. In Vermont, a partnership does not afford the owners protection from liability unless it becomes a limited liability partnership, which must be registered with the state.
3. Limited liability company.
Vermont limited liability companies (LLC) are legal entities and must be registered with the state. They can choose to be taxed as a pass-through entity or as a corporation (double taxation entity), afford their members (owners) limited liability, and can be managed by their members or by at least one manager appointed by the members.
Vermont offers 2 LLC sub-types:
- A Professional LLC (PLC) allows certain professionals to operate as a company. All members of a PLC must be licensed in the profession of the company.
- A Low-Profit LLC (L3C) can be formed if the business significantly furthers the accomplishment of a charitable or educational purpose and the generation of income and profits is not a significant purpose of the business.
A Vermont corporation is a formal structure that is recognized as an entity separate from the owners or shareholders, affording them liability protection. A corporation is the most complex business structure and is subject to double taxation.
Vermont offers different types of profit corporations and sub-types. A Vermont corporation can be a general corporation or a close corporation. A close corporation can choose to dispense with the board of directors, its shares are not publicly traded. and it may not have more than 35 shareholders.
Vermont offers the following profit corporation sub-types:
- Professional corporations allow certain professionals to operate as a corporation.
- Benefit corporations are suitable for corporations that want to combine a social mission with their financial goals.
- Workers cooperative corporations are corporations that are self-managed by their workers.
Vermont Filing Fees:
Type of Filing
Corporation - Articles of Incorporation
LLC - Articles of Organization
Partnerships - Statement of Partnership Authority
Certificate of Limited Partnership
Assumed Business Name Registration
How do I get a business license in Vermont?
In Vermont, there is no general business license on a state level, but some cities do have general business license requirements and certain services must obtain a professional license to operate. You can apply for these licenses and permits online through Vermont's eLicense System.
How do I start an LLC in Vermont?
To form an LLC in Vermont, you need to file Articles of Organization with the Vermont Secretary of State. This can be done online and costs $125.00.
How do I start a farm business in Vermont?
- Create a farm business plan.
- Find a name for your farm business.
- Register the name.
- Get an EIN.
- Register your business with the Secretary of State.
- Get any farm-related licenses and permits.
- Register for tax.
- Market and advertise your farm business.
How much does it cost to register a business in Vermont?
It costs $125.00 to register a business in Vermont.
What permits do I need to start a business in Vermont?
The state of Vermont does not have a general business license, but many cities in Vermont do. If your business sells taxable products or provides professional services, you may require a sales and use tax permit and certain professional service licenses.
Is Vermont a good place to start a business?
Vermont is home to innovative startups and tech entrepreneurs like OhMD. Despite the state's small population, it boasts almost 80,000 small businesses that employ more than 60% of Vermont's workforce. Drawbacks include relatively high tax rates and a high cost of living.
How do I register my business in Vermont?
- Select a business structure.
- Compile a business plan.
- Name your business.
- Obtain an EIN.
- Register your business name with the Vermont Secretary of State.
- Obtain the necessary licenses and permits.
- Register a business tax account.
How do I dissolve an LLC in Vermont?
You should close your business's tax account and then file Articles of Dissolution.
How many small business owners are there in Vermont?
According to the Small Business Administration, there are 77,614 small businesses in the state of Vermont as of 2019.