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
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.
How to Form a VT Corporation Yourself in 6 Steps
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.
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.
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.
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
File by Mail
Vermont Secretary of State
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?
Calender Year: March 15
Fiscal Year: Within 2½ months after end of fiscal year.
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.
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
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:
- Professional Engineers
- Land Surveyors
- Social Workers
Check with the Secretary of State to confirm whether your business should and can be a Professional Corporation.