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TLDR

• Vermont offers numerous resources for founders, such as a site selector and a business navigator, helping founders start their businesses in Vermont.
• When you register a business in Vermont, you'll need to satisfy several requirements, allowing you to start your company legally and compliantly. Before registering, though, it's a good idea to map out your business, including your location, your ideal customer, and your marketing and sales approach, to name a few topics. You can do this by drafting a business plan.  
• In Vermont, you can choose from several different types of business structures. One of the more prevalent business types is the sole proprietorship. If you operate as a sole proprietorship, you do not have to formally file your startup in Vermont. Instead, any profits or losses are reported on your personal tax return.
• When choosing your startup's structure, you'll also have to choose a name. When picking a name for an LLC, corporation, or limited partnership, you'll need to distinguish it from other business names already registered with the state. Further, your startup's name must comply with Vermont's naming conventions. You can check for available names by visiting Vermont's business search database.
• Next, after choosing your startup's name, you need to identify a registered agent. A registered agent accepts service of process on behalf of your startup, meaning it accepts legal documents. You may serve as the registered agent yourself, or you can engage an entity – registered in the State of Vermont – to serve.
• Finally, after completing the above steps, it's time to submit your formation forms to Vermont's Department of Financial Institutions. The State of Vermont provides sample forms for your use or review for new entities.
• If you founded a startup in a state other than Vermont but want to conduct business in Vermont, you'll have to register your business as a foreign entity. Whether a business is a domestic or foreign entity depends upon where the startup was formed and which state governs its management and operation.

With just over 623,000 citizens, Vermont edges out Wyoming, making it the second smallest (by population) in the U.S. Vermont leads the country in maple syrup production and serves as a top producer of high-quality dairy. Ask Ben & Jerry's Ice Cream, founded on Lake Champlain in Burlington. Also, situated in Vermont? Green Mountain Coffee Roasters – kings of the Keurig coffee pods.

Vermont also works with governmental agencies, corporations, and nonprofits to boost its diverse startup community, providing access to resources, operations assistance, and networking opportunities. In addition, the state offers numerous resources for founders, such as a site selector and a business navigator, helping founders start their businesses in Vermont.

Small business numbers are equally impressive. In 2021, Vermont was home to almost 80,000 small businesses, employing just over 158,000 people. Small businesses make up 99.0% of all Vermont businesses while employing 67.2 percent of all the state's employees. Top small business industries include professional, scientific, and technical services; construction; retail trade; health care and social assistance; accommodation and food services; and administrative, support, and waste management.

As you're launching your startup and exploring where to locate your new business, this article will explore registering your business in Vermont.

When Do You Need to Register a Business in Vermont?

When you register a business in Vermont, you'll need to satisfy several requirements, allowing you to start your company legally and compliantly. Before registering, though, it's a good idea to map out your business, including your location, your ideal customer, and your marketing and sales approach, to name a few topics. You can do this by drafting a business plan.   

To help guide you in drafting your business plan, you can check in with the U.S. Small Business Administration or SCORE, which focuses specifically on small businesses and startups. Vermont's Agency of Commerce and Community Development also offer numerous resources for Vermont founders when starting a new business, in addition to resources specifically for entrepreneurs. Once you've identified some of the basics about your startup's operation, it is time to register your business.

Below, we've broken the Vermont requirements into an easy step-by-step process.

Determine Your Business's Entity Structure

Before registering your startup in Vermont, you must first determine your organization's legal entity structure. When deciding upon your startup's structure, it's a good idea to discuss your options with your accountant or attorney, as they can advise you in detail about the ownership, management, tax benefits, and drawbacks of each structure.

In Vermont, you can choose from several different types of business structures. One of the more prevalent business types is the sole proprietorship. If you operate as a sole proprietorship, you do not have to formally file your startup in Vermont. Instead, any profits or losses are reported on your personal tax return.

In addition to sole proprietorships, four other popular Vermont business entities include:

• Limited partnership
• Limited liability partnership
• Limited liability company
• Corporation

For example, a sole proprietorship is "easy to form and gives you complete control of your business. You're automatically considered to be a sole proprietorship if you do business activities but don't register as any other kind of business. Sole proprietorships do not produce a separate business entity. This means your business assets and liabilities are not separate from your personal assets and liabilities. You can be held personally liable for the debts and obligations of the business."

Limited partnerships have "only one general partner with unlimited liability, and all other partners have limited liability. The partners with limited liability also tend to have limited control over the company, documented in a partnership agreement. Profits are passed through to personal tax returns, and the general partner — the partner without limited liability — must also pay self-employment taxes."

On the other hand, a limited liability company or LLC "lets you take advantage of the benefits of both the corporation and partnership business structures. LLCs protect you from personal liability in most instances, your personal assets — like your vehicle, house, and savings accounts — won't be at risk in case your LLC faces bankruptcy or lawsuits."

Choose Your Business's Name

You'll also have to choose a name in choosing your startup's structure. When picking a name for an LLC, corporation, or limited partnership, you'll need to distinguish it from other business names already registered with the state. Further, your startup's name must comply with Vermont's naming conventions. You can check for available names by visiting Vermont's business search database.

Reserved Names

Suppose you're not ready to register your business in Vermont, but you want to preserve your startup's name. In this case, you can reserve a startup name for up to 120 days, preventing another new business from taking the name, along with a $20 filing fee. You may renew this reservation up to two times for 120 days each.

DBA or Assumed Names

Note that reserving a startup name is not the same as registering a "doing business as" or DBA name. DBA names are also called fictitious or assumed names. For corporations, limited partnerships, and limited liability companies, you'll need to apply with Vermont's Secretary of State.

Suppose the founder chooses a fictitious name rather than their personal name for sole proprietorships. In that case, the founder will need to file an assumed business name application with Vermont's Secretary of State's office, even though the entity itself does not need to be registered. Further, founders with sole proprietorships must check with local and municipal business license offices before conducting business.

Identify Your Registered Agent

Next, after choosing your startup's name, you need to identify a registered agent. A registered agent accepts service of process on behalf of your startup, meaning it accepts legal documents. You may serve as the registered agent yourself, or you can engage an entity – registered in the State of Vermont – to serve. If you choose a qualified entity to serve as your registered agent, that entity must have a street address with regular business hours to receive important documents. A PO box will not suffice.

Submit Your Formation Forms

Finally, after completing the above steps, it's time to submit your formation forms to Vermont's Department of Financial Institutions. The State of Vermont provides sample forms for your use or review for new entities.

For example, if you choose to register as a for-profit corporation, you will file an Articles of Incorporation application along with a non-refundable $125 filing fee. For Vermont startups registering as an LLC, you will file Articles of Organization application, also along with a non-refundable $125 filing fee.

How Much Does It Cost to Register a Business in Vermont?

Depending upon your chosen entity for your startup, you will have your initial filing fee payment, any additional annual filings, and any taxes. For example, as stated above, you must pay a non-refundable $70 filing fee for registering a for-profit corporation and an LLC. You'll also need to file annual reports for your entity, requiring a filing fee depending upon your startup entity.

Additionally, most Vermont startups must apply for specific business licenses or permits through Vermont's Department of Taxes and local municipalities, which all may have separate filing fees.

How to Register a Business in Vermont that Started in Another State

If you founded a startup in a state other than Vermont but want to conduct business in Vermont, you'll have to register your business as a foreign entity. Whether a business is a domestic or foreign entity depends upon where the startup was formed and which state governs its management and operation.

For example, a registered startup in Vermont is a "domestic" startup. However, if you have a Delaware registered startup but want to conduct business in Vermont, your business would be considered a "foreign" startup.

Let's look at an example. Suppose you have a Delaware corporation, but you'd like to conduct business in Vermont. Then, you can complete a Certificate of Authority application, along with a filing fee.

The Benefits of Registering a Business in Vermont

There are many benefits associated with registering your startup in Vermont. Let's look at some top ones:

• Plenty of outdoor activities and adventures
• Amazing winter sports
• Low populations give you plenty of space
• Numerous tax incentives for new businesses
• A simple approach to living
• Housing prices are affordable, at least for houses outside of ski towns

The Limitations Associated with Registering a Business in Vermont

There aren't that many limitations associated with registering your startup in Vermont. However, here are a couple of points to keep in mind:

• Cold winters
• Mud season
• Lack of diversity

We Can Help!

At AbstractOps, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most—your business.

If you're looking for help registering your Utah startup, we can get your documentation ready, overall shepherding this process to ensure it's done right. Get in touch with us.

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Note: Our content is for general information purposes only. AbstractOps does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.

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