How to Dissolve an LLC in Vermont (2026)

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 20, 2026 · Last updated Aug 20, 2026

To dissolve a Vermont LLC you take four steps in order: vote to dissolve under the operating agreement and 11 V.S.A. chapter 25, wind up the business and pay creditors, settle Vermont tax accounts and file final returns, then file Articles of Termination with the Vermont Secretary of State through the Online Business Service Center.

When a Vermont LLC Dissolves

Dissolution is not a single act; it is a sequence. Under the Vermont Limited Liability Company Act, Title 11, chapter 25 of the Vermont Statutes, an LLC is dissolved and its activities must be wound up on the occurrence of an event specified in the operating agreement, on the consent of the members as the agreement provides, or on a judicial or administrative order. Section 4034 sets out those causes; the winding-up and termination provisions follow it.

Read the operating agreement first, because it usually specifies who must vote and by what majority. If it is silent, the statutory default applies. Record the decision in a written consent or minutes signed by the members — the Secretary of State does not want to see it, but a member, a creditor, or a court may later. See what an LLC is and the national dissolution guide.

Winding Up: Creditors First, Members Last

After dissolution the LLC continues to exist for the limited purpose of winding up. In that phase you collect assets, dispose of property that will not be distributed in kind, discharge liabilities, and settle disputes. Vermont, like every state adopting the uniform act, requires that creditors are paid before members. Distributing cash to members while debts remain unpaid can make the members personally answerable for the shortfall — the liability shield does not protect a wrongful distribution.

Practical winding-up work: terminate leases and service contracts, cancel licences and permits, notify customers and suppliers, collect receivables, close merchant and payroll accounts, and keep the business bank account open until the last cheque clears. Only after creditors are satisfied do you distribute what remains to members in the proportions set by the operating agreement.

Settle Vermont and Federal Taxes

Do the tax work before the final filing, not after. File final Vermont business income tax returns with the Department of Taxes for the short final year, file final sales and use tax and withholding returns if you were registered, remit the last payments, and ask the department to close each account so it stops expecting returns. An account left open generates non-filer notices long after the business has gone.

Federally, mark the final return as final: Form 1065 for a multi-member LLC or Form 1120-S for an S-corporation-electing LLC, with final Schedules K-1 to the members. File final employment tax returns and issue final Forms W-2 and 1099. The EIN is never reused, but you can ask the IRS in writing to close the business account associated with it. See business tax basics.

File Articles of Termination

The final state step is filing Articles of Termination for the domestic LLC with the Vermont Secretary of State. Most Vermont business filings are submitted electronically through the Online Business Service Center; paper forms are available on request rather than being posted online. Confirm the current filing fee on the Secretary of State's fees and statutes page before you file, and pay the amount shown there.

Get the entity current before filing. Vermont LLCs must file an annual report, at $35, to keep the registration alive, and must keep a Vermont registered agent throughout. Failing to file annual reports or maintain an agent terminates the entity's good standing, and an entity out of compliance generally has to bring its reports up to date — paying the report fee and a reinstatement fee for each missed year — before it can complete a voluntary termination. See Vermont registered agent and how to form an LLC in Vermont.

Foreign Registrations and Other States

Dissolving in Vermont does not end registrations elsewhere. If the LLC qualified to do business in another state, that state's registration continues, and its annual report and franchise obligations continue with it, until you file a withdrawal or cancellation there. Do those withdrawals as part of the same project, working from a list of every state where the entity is registered.

The same applies to local licences, professional registrations, and any assumed names on record. Cancel a DBA in the office where it was recorded rather than assuming it lapses with the entity. If you are winding down in order to re-form elsewhere, sequence the new formation before the old termination so contracts and bank accounts can move across without a gap. See registered agent for what happens to service of process.

Records, Insurance, and What to Keep

Termination does not extinguish claims that arose while the LLC was operating, and Vermont's statute provides for claims against a dissolved company within the limits the act sets. Keep the operating agreement, member consents, the termination filing, final tax returns, payroll records, and the general ledger for at least the longest applicable limitation and record-retention period — seven years is a common working rule for tax records.

Consider whether to keep liability insurance in force on a run-off or tail basis for professional and product exposures, since a claim can surface after the business closes. Notify your insurer of the closure rather than simply cancelling the policy. Finally, keep one member designated as the contact point for post-termination correspondence, so a stray notice reaches someone who can act on it.

Common Vermont Dissolution Mistakes

Four errors recur. Filing termination while annual reports are outstanding, which Vermont will not process until the entity is brought current. Distributing to members before creditors, which exposes those members personally. Leaving Vermont tax accounts open, which generates non-filer notices for years. Forgetting foreign registrations in other states, which keep accruing fees and penalties against a business that no longer exists.

A fifth is simply stopping. Abandoning a Vermont LLC without terminating it does not make it disappear: it drifts out of good standing, accrues obligations, and leaves the members exposed to notices and, in some states, to fees. A voluntary termination properly filed is cheaper than the cleanup. See the national how to dissolve an LLC guide for the cross-state checklist.

Frequently Asked Questions

How do you dissolve an LLC in Vermont?

Vote to dissolve under the operating agreement and 11 V.S.A. chapter 25, wind up the business by paying creditors before members, file final Vermont and federal tax returns and close the tax accounts, then file Articles of Termination with the Vermont Secretary of State through the Online Business Service Center.

What form ends a Vermont LLC's registration?

Articles of Termination filed with the Vermont Secretary of State. Most filings go through the Online Business Service Center; paper forms are available by request. Confirm the current filing fee on the Secretary of State's fees page before submitting, and make sure annual reports are current first.

Do I have to file annual reports before dissolving a Vermont LLC?

Yes, in practice. Vermont LLCs must file an annual report costing $35 and maintain a registered agent to stay in good standing. An entity that has fallen out of compliance generally must bring its reports up to date, with the report fee and a reinstatement fee for each missed year, before terminating.

Do I need tax clearance to dissolve a Vermont LLC?

You should file final Vermont business income tax returns and any final sales and use tax or withholding returns, remit the last payments, and ask the Department of Taxes to close each account. Leaving accounts open generates non-filer notices long after the business has stopped trading.

What happens if I just stop operating my Vermont LLC?

The LLC continues to exist and continues to owe annual reports and a registered agent. It drifts out of good standing, accrues obligations, and any foreign registrations in other states keep accruing fees. A properly filed voluntary termination is cheaper than the eventual cleanup.

Related

• How to dissolve an LLC (cluster hub)
• How to form an LLC in Vermont
• Vermont registered agent
• Business tax basics
• What is an LLC?
• Dissolve an LLC in New Hampshire (sibling)
• Dissolve an LLC in North Dakota (sibling)
• Dissolve an LLC in Washington (sibling)

Sources

1. Vermont Secretary of State — End Business Registration (Articles of Termination).
2. Vermont Secretary of State — Fees and Statutes.
3. Vermont Secretary of State — Annual and Biennial Reports.
4. Vermont Secretary of State — Reinstatements.
5. Vermont Secretary of State — Annual Reports ($35 LLC annual report).
6. Vermont Statutes — 11 V.S.A. § 4034, events causing dissolution.
7. Vermont Statutes — 11 V.S.A. § 4105.
8. Vermont Statutes — Title 11, Chapter 25, Vermont Limited Liability Company Act.
9. Vermont Department of Taxes — Business Entity Income Tax.
10. Vermont Department of Taxes — Sales and Use Tax.
11. IRS — Closing a Business.
12. IRS — Limited Liability Company (LLC).

LegalGlass provides general information for educational purposes and is not legal advice, is not a law firm, and is not a substitute for advice from a licensed attorney or tax professional. Laws, fees, and thresholds change; verify current requirements with the Vermont Secretary of State, the Vermont Department of Taxes, and the IRS before acting.