Why form a Vermont Corporation?
The creation of a Vermont corporation helps separate the assets of the individual owners and shareholders from the debts and liabilities of the corporation. Corporations also can provide tax advantages depending on your location and method of filing, for specific tax questions we advise you to speak to a licensed Vermont accountant or CPA.
Naming your new Vermont corporation
Vermont requires that all corporations include the word "Corporation" or "Incorporation" in the corporate name - of course, abbreviations are also acceptable, such as Inc, and Corp. Corporate names also cannot be the same or deceptively similar to any current entity on-file with the Vermont Secretary of State. Similar names are typically rejected by the Vermont Corporations Division for resubmission with a new name. Also of note, the Vermont Secretary of State will find that a company name that differs only by the use of punctuation, conjunctions, or prepositions to be not distinguishable.
Authorized shares
One of the requirements of fomring a corporation is that each corporation must authorize a certain amount of shares for the company. The amount can vary but the number of shares has to be greater than 1. Generally, you will want to authorize a certain amount that will be enough to spread between shareholders of the company.
Although you can issue any number of shares, some states due charge additional fees depending on the amount of shares. We default to 1500 shares as it is a good starting number for most corporations. Most companies will probably not have more than a few shareholders.
Registered Agent
Another important requirement for forming a corporation is that each corporation must elect a registered agent. The agent must be an individual who is a resident of the state in which the filing is to occur and he or she must be over 18. The agent must have a physical address as well. The state can't accept a PO box for an agent address.
The role of the agent is that they must accept service of process in the event of a lawsuit. The state will serve process with legal documents to the agent on file. In most cases the agent is one of the owners of the corporation.
If you can't provide an agent for whatever reason, you can elect to use a third party to provide this address for you. Our fees to provide this address is $125 per year.
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