Vermont C Corporation Formation
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Vermont C Corporation Formation
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Why use UpCounsel to form an C Corporation in Vermont
Starting an C Corporation in Vermont with a business startup attorney on UpCounsel is easy, informative, and cost-effective. In just three simple steps, our C Corporation attorneys will help you protect your business and personal assets, and help you organize your business for state and federal compliance for an C Corporation.
When forming an C Corporation in Vermont with UpCounsel, the attorney you choose to help you will conduct a business name search for your Vermont C Corporation and assist you in preparing your C Corporation Operating Agreement, along with providing other legal services based on your needs. Once your Articles of Incorporation have been prepared and successfully filed with the Vermont Secretary of State, your Vermont C Corporation has been formed and begins its existence as a corporate entity.
Choosing a Company Name for Your C Corporation
One of the first steps in the process of forming your C Corporation is to choose your business name.
The business name that you choose must contain the words "incorporated", "corporation", "limited", or "company", or an abbreviation of these words. The name may not indicate or imply that the corporation is organized for a purpose other than one permitted by state law or its articles of incorporation. It must be distinguishable (not the same as or deceptively similar to) the name of an S Corp or foreign C Corporation reserved or registered.
Your C Corporation name may contain the name of one or more members.
By using UpCounsel, you can choose several business names in order of preference. Your attorney of choice can then conduct a name check for your Vermont S Corp before filing to see which names are available. Once you have chosen an available name, your chosen C Corporation attorney can help you properly register your name with the State of Vermont.
Requirements for Forming a Vermont C Corporation
Articles of Incorporation: When forming an C Corporation in Vermont, the Articles of Incorporation must be filed with the Vermont Secretary of State. Vermont state law requires that certain information be included in your Articles of Incorporation when forming your Vermont C Corporation.
This information must include:
- The C Corporation name and address.
- The purpose of the C Corporation
- The name and address of the registered agent for service of process on the C Corporation
- The number of shares, and their class, that the C Corporation is authorized to issue.
- The name and addresses of each of the incorporators.
- Name and address of the board of directors.
Additionally, a Vermont C Corporation formation generally requires inclusion and/or consideration of the following:
C Corporation Operating Agreement: Although the C Corporation Operating Agreement is not required with the Articles of Incorporation, it is a good idea for every C Corporation with more than one member to have one. The Articles of Incorporation may contain restrictions or prohibitions on the power of the members to adopt, amend, or repeal an operating agreement. If there is more than one member, any operating agreement shall initially be agreed to, in writing, by all of the members. If you do choose to adopt an operating agreement, it does not have to be filed with the Secretary of State, but should be kept on file by the registered agent.
Membership: A C Corporation must have one or more members.
Eligibility Requirements: A natural person or an entity.
Procedure for Membership: The member may acquire an interest in the C Corporation directly from the C Corporation at the time of formation and, after formation, at the time provided in and upon compliance with the Articles of Incorporation or the operating agreement or, if not provided, only upon the vote of a majority in interest of the C Corporation members, excluding the vote of the person acquiring the membership interest, and only when the person becomes a party to the C-Corp's operating agreement.
Business Licenses: Business licenses and/or permits are required for most C-Corp's offering specific professional services. Contact the Vermont State Corporations Commission for specific licenses.
Resident Agent needed for a Vermont C Corporation
Remember every Vermont C Corporation must have a registered agent in Vermont, which is the person or office designated to receive official state correspondence and notice if the company is "served" with a lawsuit. The statutory agent may be an Vermont resident or business entity authorized to do business in Vermont. The registered agent must have a physical Vermont street address.
Vermont Secretary of State
Once you create an C Corporation in Vermont, the Vermont Secretary of State will require that certain recurring responsibilities and duties be fulfilled. The most important of these are explained below.
For further information, contact the Vermont Secretary of State.
Recurring Responsibilities and Duties for Vermont C Corporations
Annual Report: Each C Corporation shall provide an annual report to the Vermont Secretary of State regarding its financial condition to each of its members. The report is due within 2 months of the end of the C-Corp's fiscal year. The filing fee is $35.
Business Licenses: Business licenses and/or permits are required for most businesses. Contact the Vermont Secretary of State for specific licenses
Filing Fees for a Vermont C Corporation
Filing of the Articles of Incorporation must be made with the Vermont Secretary of State in which the C Corporation was organized, along with the appropriate state filing fee. The fee for this is $135 and the Articles may be emailed or mailed along with the fee. Keep in mind that fees can be subject to change, so make sure to refer to the Vermont Secretary of State for any updates.
Taxes for a Vermont C Corporation
Vermont C Corporation shareholders do not report any of the business income and expense on their individual tax return. The corporation files tax returns and pays its income taxes (at generally lower tax rates than would individuals) while the individual shareholders report and pay personal income taxes only on monies paid them by the corporation. It should be noted that shareholders are required to pay personal income taxes on income from dividends paid by a C Corporation even though income taxes have previously been paid by the corporation. This leads to what is commonly referred to as "double taxation".
Vermont state law follows federal law for income tax purposes. Therefore if a corporation is classified as an association taxable as a C Corporation for federal income tax purposes, so will it be taxable as a corporation for state tax purposes.
Federal Income Tax: For federal income tax purposes, a C- Corp is recognized as a separate taxpaying entity. A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders.
Vermont State Income Tax: Vermont imposes a corporate income tax on businesses.
Federal Tax Identification Number: Your corporation will need to obtain a federal tax identification number, which is also known as an Employment Identification Number (EIN). You do not need to get a new EIN after the corporation choose to become a C Corporation An EIN is similar to an individual's social security number. You will need an EIN for your C Corporation as long as there is one member, even if the C Corporation does not have employees. For certain tax filing requirements the attorney you choose on UpCounsel can help prepare your Federal Tax ID Application, if you have not done so already.
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