Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Vermont are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Vermont has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Vermont LLC dissolution process? Are there different processes for businesses based in Vermont and those expanded from other states? When do you need to dissolve your LLC? We’ll answer all of these questions and more in this article.
Dissolution for Domestic Vermont LLCs
Is your LLC based in Vermont, and registered as a domestic entity in this state? If so, you’ll start your dissolution process with a document known as the Articles of Termination. This form will include some crucial information about your business, so you should fill it out carefully and accurately.
Among the info you’ll need to complete this form is the official business name of your LLC, the effective date of your dissolution, an address for potential future service of process deliveries, and the name and signature of an authorized representative of your LLC.
Vermont strongly prefers documents submitted online, although they do give you the option of printing off your form instead of submitting it when you’re done filling it out. In addition, you’ll also need to pay your $20 filing fee. If you file online, you can expect a 3-5 business day turnaround, while mailed filings will take roughly 7-10 business days.
But what does this process look like for a business that was formed outside the state and then expanded to Vermont?
Dissolution for Foreign LLCs in Vermont
If you operate a foreign LLC in the state of Vermont, the dissolution process looks slightly different than it does for domestic entities. In fact, it’s actually technically called a cancellation rather than a dissolution.
To dissolve a foreign LLC in this state, you’ll first complete the Certificate of Cancellation document. Much of the information for this form is the same as the info provided for the Articles of Termination, but there are some differences for the foreign version.
This form requires your LLC’s official business name, the jurisdiction where you originally formed your business, an address for potential future service of process deliveries, the effective date of your cancellation, and the name and signature of an authorized representative of your LLC.
As with the domestic version, you can file online, or print it off and mail it in. This filing also has a $20 fee. If you file online, you can expect a 3-5 business day turnaround, while mailed filings will take roughly 7-10 business days.
Involuntary Dissolutions in Vermont
We should also discuss the potential for an LLC to be involuntarily dissolved by the state. There are several reasons this could happen, and most of them revolve around significant mistakes made by the LLC’s ownership group.
For instance, Vermont could involuntarily dissolve your LLC if you fail to file an annual report or if the LLC has no active members or owners for at least 90 days. In addition, the state will revoke a foreign LLC’s right to transact business in Vermont if you fail to pay any fees, taxes, or penalties within 60 days of the due date, if you fail to maintain a registered agent, or if you fail to inform the state of a change to your registered agent.
It’s obviously never advisable to operate your LLC in a way that leads to the state dissolving it against your will. However, the penalties in this state aren’t very harsh. For example, you would need to file a reinstatement request, pay a $25 fee, catch up on any missed filings, and pay any applicable late fees or fines.
Still, if you keep operating your business after the state involuntarily dissolves it, you could open yourself up to all sorts of legal issues due to the continued operation of a non-compliant entity. In general, you should be as careful as possible when it comes to following the rules and regulations in this state.
It’s not that the process for dissolving or withdrawing your LLC in Vermont is terribly difficult. However, it is a process that you need to take great care to complete in a compliant fashion, or you could expose your business to a wide variety of potential legal complications and financial penalties. Trust us when we say it’s much smarter and easier to simply follow the directions with care to avoid any issues.
Do you need more information about operating an LLC in Vermont? Take a look at the following resources: