A Vermont LLC operating agreement is a document that explains how company members should conduct their business. It also includes information on officer appointments and ownership percentages.
Company members can set their desired rules and regulations and compile them within an operating agreement. Once every member signs this document, they can keep records of it within the business. They don’t need to file it with any government body.
Is an LLC Operating Agreement Required in Vermont?
No, an LLC operating agreement is not required in Vermont. However, having this document can help you outline how the LLC will operate from the beginning and promote greater cohesion within the company.
Title 11, Chapter 25 of the Vermont Statutes covers various aspects of limited liability companies, including general provisions, organization, and the relation of members and managers. The statute that covers LLC operating agreements is 11 V.S.A. § 4003, which explains the effect of an operating agreement and its non-waivable provisions.
Costs and Fees
You may need to cover the following costs and fees to form a Vermont LLC:
- Domestic and foreign filing fee: $125
- Annual report fee: $35
- Name reservation fee: $20
- Certificate of good standing: $25
How to Form an LLC in Vermont
Explore the process of forming an LLC in Vermont:
Step 1 – Choose a Business Name
There are a few requirements for a business name for an LLC in Vermont:
- Your LLC’s name must include the phrase “Limited Liability Company” or an approved abbreviation like “L.L.C.” or “LLC.”
- Your LLC’s name can’t be too similar to another business name already on file with the state of Vermont (use the business name database tool to confirm if your desired name is available).
- You can use a fictitious name (also called a DBA) for your LLC if you register it with the state.
Step 2 – Appoint a Registered Agent
Every LLC in Vermont must have a registered agent. A registered agent agrees to receive legal documents on behalf of the LLC. The registered agent can be an individual or a business, but they must have a physical address in Vermont.
You can find a registered agent yourself or go through a registered agent service to find someone for the position.
Step 3 – File the Articles of Organization
To form an LLC in Vermont, you must file articles of organization with the Vermont Secretary of State. You can complete this process online, which usually takes up to one business day.
When you’re ready to file your articles of organization, ensure you have all relevant information. Some details to have on hand include:
- The LLC company name and address
- The members’ names and addresses
- The type of management the LLC will assume (member-managed versus manager-managed)
- The registered agent’s name and contact information
- The LLC’s description and purpose
Step 4 – Create an Operating Agreement
Although it’s not required, creating an LLC operating agreement is highly beneficial. This document will help you establish critical aspects of your business and communicate them to all members. Some elements to include in your operating agreement are buy-out rules, voting rights and responsibilities, ownership percentages, and meeting procedures.
Step 5 – Get an EIN
An Employer Identification Number (EIN) is a nine-digit number the IRS assigns to businesses. LLCs with more than one member must get an EIN. You can apply for an EIN online, by mail, or by fax.
Step 6 – Comply with Vermont’s Requirements for Business Licenses and Permits
You may need a business license or permit to operate your LLC in Vermont. For example, some businesses may need a seller’s permit. Check with your city or county clerk’s office to see if you need a local business license.
Step 7 – Keep Your LLC in Good Standing
You must file an annual report with the Secretary of State to keep your LLC in good standing. Ensure you submit this report within the first three months of your company’s fiscal end date. If you’re unsure when this date is, you can refer to your LLC’s articles of organization.