How to Dissolve an LLC in Vermont: Complete 2026 Guide

How to Form an LLC: Step-by-Step

1. 1

   Vote to Dissolve

   Before filing dissolution paperwork, your LLC members must formally vote to dissolve the company. Review your operating agreement for specific voting requirements - some agreements require unanimous consent, while others may allow majority vote. If you don't have an operating agreement, Vermont law requires consent from all members. Document this decision in writing with meeting minutes and member signatures.

   Pro tip: Keep detailed records of the dissolution vote, including the date, members present, and voting results. You may need this documentation for tax purposes or future legal questions.
2. 2

   File Articles of Dissolution with the Vermont Secretary of State

   Submit your Articles of Dissolution to the Vermont Secretary of State online at https://sos.vermont.gov. The filing fee is $35, and processing time varies. Before your dissolution can be finalized, Vermont requires you to obtain a tax clearance certificate from the Vermont Department of Taxes, confirming all state taxes have been paid. Include this clearance certificate with your Articles of Dissolution filing.

   Pro tip: File online for faster processing and immediate confirmation of receipt. Double-check that your tax clearance certificate is current and properly attached to avoid delays.
3. 3

   Notify Creditors and Settle Debts

   Contact all known creditors in writing to inform them of your LLC's dissolution. Vermont law requires creditor notification with a notice period that varies by state statute. Pay all outstanding debts and obligations before distributing assets to members. Keep records of all creditor communications and debt settlements for your business records.

   Pro tip: Send creditor notices via certified mail to create a paper trail. Consider publishing a general notice in a local newspaper to reach unknown creditors, even though it's not required in Vermont.
4. 4

   Close Vermont State Tax Accounts

   File your final Vermont state tax returns with the Vermont Department of Taxes. This includes your final franchise tax return and any other applicable state taxes. Pay all outstanding tax obligations to obtain the required tax clearance certificate. Close your state tax accounts and request written confirmation that all obligations are satisfied.

   Pro tip: File final returns promptly to avoid penalties. The tax clearance certificate is mandatory for dissolution, so ensure all state tax matters are resolved before proceeding.
5. 5

   Cancel Your EIN with the IRS

   Notify the IRS that you're closing your business by sending a letter to the IRS Cincinnati office. Include your EIN, business name, address, and dissolution date. Also file your final federal tax returns, including Form 1065 for multi-member LLCs or Schedule C for single-member LLCs. The IRS doesn't formally 'cancel' EINs, but this notification prevents future issues.

   Pro tip: Send your IRS notification letter via certified mail and keep a copy for your records. Consider consulting a tax professional for final return preparation to ensure compliance.
6. 6

   Distribute Remaining Assets to Members

   After paying all debts and obligations, distribute remaining LLC assets to members according to their ownership percentages or as specified in your operating agreement. Follow the proper legal order: pay creditor claims first, then return member capital contributions, and finally distribute any remaining profits. Document all asset distributions with written agreements.

   Pro tip: Value assets properly before distribution and consider tax implications for members receiving property instead of cash. Get member acknowledgments in writing for all distributions.
7. 7

   Confirm Dissolution is Complete

   Verify that the Vermont Secretary of State has processed your Articles of Dissolution and your LLC's status shows as dissolved in their database. Retain copies of all dissolution documents, final tax returns, creditor notices, and asset distribution records. These records may be needed for future tax audits or legal questions.

   Pro tip: Check the Secretary of State's online database to confirm your LLC appears as dissolved. Store all dissolution paperwork in a secure location for at least seven years as recommended for business tax records.

Winding-Up Checklist

• Cancel all Vermont business licenses and permits

  Contact each licensing agency to formally cancel permits and avoid ongoing fees. Return any physical licenses if required.

• Close business bank accounts

  Withdraw remaining funds after all debts are paid and provide the bank with dissolution documentation. Cancel any associated business credit cards.

• Cancel business insurance policies

  Notify insurance providers of your dissolution date to avoid unnecessary premium charges. Some policies may provide refunds for unused coverage.

• Notify vendors, suppliers, and customers in writing

  Send formal notification letters explaining your business closure and final billing arrangements. Provide forwarding contact information if needed.

• File final payroll tax returns and W-2s (if you had employees)

  Submit final quarterly payroll reports to Vermont and federal authorities. Issue final W-2s to employees and provide COBRA notices if applicable.

• Retain business records per Vermont retention requirements

  Keep tax records for at least seven years and other business documents per legal requirements. Store records securely but accessibly for future reference.