Why Start a VT Corporation?
The Vermont Agency of Commerce and Community Development offers a range of funding and incentives, giving businesses in Vermont a leg up. Your corporation may be able to take advantage of these incentives, provided it meets qualifying criteria.
For example, the Vermont Employment Growth Incentive (VEGI) program provides cash payments to businesses that have been authorized to earn the incentive and who then meet performance requirements. The value of each payment is based on the revenue return generated to the State by prospective qualifying jobs, payroll creation, and capital investments.
For most entrepreneurs looking to start a larger business, VT incorporation may be the best choice. As a corporation, your business is able to buy and trade stock, and when it comes to excess profits, corporations offer more flexibility than a limited liability company (LLC). A corporation is allowed to pass income and losses to its shareholders, who report taxes on an individual tax return at ordinary levels.
Is an LLC Better Than a Corporation?
It all depends on your business goals. For smaller businesses, limited liability companies are usually a better option. An LLC is easier to set up and receives many of the same benefits as corporations, but with less regulation.
Learn more about forming a Vermont LLC so you can decide which business entity is right for you.
Benefits of Forming a Vermont C Corporation
It offers you numerous advantages, including but not limited to:
- The strongest form of liability protection possible by insulating your personal assets and finances from business debts, obligations, damages, bankruptcy or other liabilities
- Several options to create, buy, sell or transfer stock, including publicly
- The ability to issue more than one type of stock
- The ability to raise more funds by issuing more stock
- The ability to sell stock to investors inside and outside the U.S.
Benefits of Forming a Vermont S Corporation
It offers several advantages similar to those provided by a C Corp including, but not limited to:
- Options for creating, transferring and selling stock, though not as many as a C Corp
- The capacity for up to 100 shareholders
- Simpler rules than those that apply to C Corporations
- Easy transfer of ownership simply by selling your stock
- The possibility of saving money by allowing you to pay less self-employment tax
In this guide, you’ll find information on naming your corporation, getting a Registered Agent, the fees you’ll need to pay, business taxes and much more. We also cover what you'll need to register your corporation and how you'll interact with the Secretary of State in Vermont.
Start a Business in Vermont Checklist
To help you along the way, use our Starting a Business checklist to keep track of everything you need to do to get your business up and running.
How to Form a VT Corporation Yourself in 6 Steps
Step 1 - Choose a Unique Business Name and Complete a State Business Search
Step 2 - Provide an Official Business Address for Your Corporation
Step 3 - Assign a Registered Agent
Step 4 - File Your Articles of Incorporation with the Vermont Secretary of State
Step 5 - Get an Employer Identification Number (EIN) from the Internal Revenue Service
Step 6 - Write Your Bylaws
1
Choose a Unique Business Name and Complete a State Business Search
Every Vermont business must have a unique name that isn't already being used by another business in the state. If you’re having difficulty thinking of a name, try using our Business Name Generator to gather ideas. You'll need to follow a few naming rules, which you can read about in detail on the Vermont Corporation Names page.
Once you’ve picked a name, you’ll need to make sure it’s available in Vermont. To see whether another company in the state is using your desired business name, use our tool to do a Vermont entity search.
You can also carry out a name search on the state's website.
2
Provide an Official Business Address for Your Corporation
All VT corporations must have a designated address. It could be your residential address (if you’re running the company from your home), a building where your office is located or any physical address of your choice. The address can be outside the state of Vermont and can be a P.O. Box.
You may also be able to use a virtual mailbox for your business address. This can be especially helpful if you run a home-based business and don't want your home address published as part of your business public record.
3
Assign a Registered Agent
Someone who receives official correspondence and is responsible for filing reports with the Vermont Secretary of State is known as a Registered Agent. Every Vermont corporation is required to have a Registered Agent.
You can fill this position yourself, assign another manager in your business or use a Registered Agent service. If your Registered Agent in Vermont is a person, they must have a physical street address in Vermont and must be available during business hours to receive important documentation on behalf of your company. You'll appoint your Registered Agent when you file your Articles of Incorporation with the Secretary of State and formally create your corporation.
All of Incfile’s business formation packages include Registered Agent service. It’s free for the first year and just $119 per year after that. You can also access a digital dashboard to view any document we've received on your behalf.
4
File Your Articles of Incorporation with the Vermont Secretary of State
Once you've gathered all the information for your corporation, you’ll need to file your Articles of Incorporation with the Secretary of State via their online business filing system. This will officially create your business.
Here’s what is typically included:
- Your business name and type
- Business description
- Initial principal business address
- Registered Agent's name and address
- The corporation’s capital structure (number of shares to be issued)
- Name and address of incorporator
- Initial director(s) name(s) and address(es)
- Signature of incorporator
Your Articles of Incorporation can be filed online via the state's digital business filing portal. You can also mail the form to the Office of the Secretary of State, or Incfile can file it on your behalf. The VT Corporation filing fee is $125.
File by Mail
Vermont Secretary of State
Corporations Division
128 State Street
Montpelier, VT 05633-1104
You only need to file your Articles of Incorporation in Vermont once, but once a year you must renew your registration by filing an annual report online via the VT Secretary of State's Business Filing System. Incfile can remind you about this every year, or we can do it for you if you have us handle the paperwork.
What are the fees and requirements to incorporate in Vermont?
| State Fee | State Filing Time | Expedited Filing Time |
| $125 | 3 Weeks | 3 Business Days |
| State Fee | $125 | |
| State Filing Time | 3 Weeks | |
| Expedited Filing Time | 3 Business Days |
Annual Report
Frequency
Annually
Due Date
Calender Year: March 15
Fiscal Year: Within 2½ months after end of fiscal year.
Filing Fee
$455
Get an Employer Identification Number (EIN) from the Internal Revenue Service
You'll need an EIN to identify your business to the IRS. You use this number for filing and paying taxes, submitting payroll information and payments for your employees and opening a business bank account. You can obtain one directly from the IRS, or Incfile can get one for you as part of the VT corporation creation process.
6
Write Bylaws
A set of rules that govern how a corporation will be run, bylaws detail how many directors the corporation will have, whether the board of directors will have annual meetings and what the voting requirements will be, among other things.
Some states legally require companies to create bylaws, and the state of Vermont is one of them. You don't need to file your bylaws with the Secretary of State however, simply keep them with your other business records.
It's always a good idea to write and follow bylaws to protect your business from any future changes and events.
Types of VT Corporations
C Corporation
When you file to start a corporation, by default, it's a C Corp. This is the choice for large businesses that will trade shares in the stock market.
A Vermont C Corporation will offer you several liability protections, but it will also be required to adhere to numerous strict rules and regulations. It will also likely have a substantial amount of administrative overhead, and won't enjoy as many tax advantages as other corporation types.
Learn more about C Corporations.
S Corporation
Technically, an S Corporation isn't a business entity the way LLCs and C Corporations are. It's a tax filing status. An LLC or a C Corporation can be an S Corporation. It's just a matter of filing a form with the IRS.
The main reason to file as an S Corp is to save money on self-employment taxes. To get an idea of how much money you might save, use our S Corp Tax Calculator.
If you want your Vermont C Corporation to be treated as a Vermont S Corporation, file the IRS Election by a Small Business Corporation form, also known as Form 2553 or an S Corp Election form.
Consult with your tax advisor or accountant to determine whether this is your best option.
Learn more about S Corporations.
Compare S Corp vs. C Corp to learn the benefits and drawbacks of both, and decide which one will best suit your needs.
Professional Corporation
Some states, including Vermont, allow certain occupations that deliver professional services to form Professional Corporations. Vermont Statutes, Title 11, Chapter 4, § 817 defines a Professional Corporation in Vermont as:
"...a corporation for profit, other than a foreign professional corporation, subject to the provisions of this chapter." and a Professional service is defined as "a service that may be lawfully rendered only by a person licensed or otherwise authorized by a licensing authority in this State to render the service, and may not be lawfully rendered by a corporation under Title 11A."
In addition, the Vermont Statutes Title 26 specifies a few of the professions permitted to form a Professional Corporation in Vermont, which include, but may not be limited to:
- Accountants
- Architects
- Podiatrists
- Chiropractors
- Dentists
- Professional Engineers
- Nurses
- Optometrists
- Osteopaths
- Pharmacists
- Veterinarians
- Land Surveyors
- Psychologists
- Social Workers
Show all
Check with the Secretary of State to confirm whether your business should and can be a Professional Corporation.
Close Corporation
Simply put, a Close Corporation is a VT corporation which has a limited number of shareholders and isn't publicly traded.
In addition, Close Corporations are exempt from certain corporate requirements, such as having decisions approved by both shareholders and corporate directors. Per Vermont Statutes Title 11A, Chapter 20, § 20.08, a Vermont Close Corporation may operate without a board of directors.
This entity is often chosen by family-owned businesses to prevent non-family members from establishing or claiming any ownership of the company.
Foreign Corporation
If your business operates in another state and you want to expand into Vermont — or vice versa — you’ll need to form a Foreign Corporation.
Learn more about Vermont Foreign Corporation registration.
Nonprofit Corporation
Charitable organizations can incorporate as nonprofit corporations. This means all the profits they generate are donated to the organization supported by the charity, minus administrative costs.
A nonprofit corporation is also exempt from federal and state taxes, allowing more of the profit to benefit the charity.
Note: Everything in this guide applies to for-profit corporations, and mostly to C Corps and S Corps. Items listed as requirements for forming a corporation may or may not also apply to nonprofits.
Limited Liability Company
Depending on the type of business you want to start, or your personal circumstances and goals, an LLC may be a better option. For example, you may only want to build a small business that you yourself will run with just a few employees and you may not need the options to buy and sell stock.
A Vermont LLC is usually a better option for a smaller business. It's easier to set up, but it still offers you certain advantages you'd get from a corporation. You can even have your LLC treated as an S Corporation for tax purposes to save you money.
Regardless of which direction you choose to go, we can help you with your Vermont business registration.
Learn more about limited liability companies.
Sole Proprietorship or Partnership
These are the simplest types of businesses to set up. That's because there's no real setup to do. If you don't choose to form a separate business entity, by default, you'll have either a sole proprietorship (just you) or a partnership (you and one or more other people).
Neither of these options provide you with any special benefits or liability protections and can leave your personal assets vulnerable. For these reasons, we don't recommend them.
Compare business entity types to decide which one is best for you.
Helpful Resources from the State of Vermont
More Information in This Guide
You’ll find plenty more insight and guidance on the other pages of this guide, including:
How to search the state business registry and find the right name. Includes information on naming rules, assumed names, reserving names for VT corporations and more.
How to appoint, change and search for Registered Agents. Also includes the duties they fulfill and the rules they’re required to follow.
Details the various fees you’ll need to pay and the state and federal requirements you’ll need to meet. Includes details about Employer Identification Numbers (EINs), state and federal business licenses, annual reports and more.
Covers the various taxes you’ll have to pay to the state and federal governments. Includes details about state taxes such as income and sales, and federal taxes such as income and self-employment.
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