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Business Taxes
Business Entity Types
C CORPORATION
A “C “corporation is a standard business corporation. Named “C” corporation because the
taxing subsection of the IRS code, this type of corporation provides the protection of limited
liability for the shareholders. However, “C” corporation earnings are taxed at the corporate
and income to the shareholders taxed at the personal income tax level.
A “C” corporation must file its article of association with the Vermont Secretary of State and
obtain a certification of authority to business in this state.
S CORPORATION
An “S” corporation is a small business corporation taxed under subsection S of the Internal
Revenue Code. This type of corporation provides the protection of limited liability for the
shareholders. The profit or loss of an “S” corporation normally passes to the shareholders in
proportion to their shares in the corporation. The shareholders report the profit or loss on their
individual tax returns. The “S” corporation generally does not pay incomes taxes at the
corporate level. Also referred to as a Subchapter S corporation.
A “S” corporation must file its article of association with the Vermont Secretary of State and
obtain a certification of authority to business in this state.
LIMITED LIABILITY COMPANY
The Limited Liability Company (LLC) is a relatively recent business organization form
containing the elements of both a corporation and a partnership. An LLC provides the
protection of limited liability to its members. A LLC is a pass-through entity. Its profit or loss
is not taxed at the entity level but passes through to the members to be reported on their
individual tax returns.
A LLC corporation must file its article of association with the Vermont Secretary of State and
obtain a certification of authority to business in this state.
PARTNERSHIP
A Partnership is a form business ownership by two or more owners who agree to invest
resources for the business activity and to share in the profits or losses of the business. A
partnership is generally treated as a pass-through entity with the partners reporting the
business profit or loss on their personal income tax returns. The Partnership itself is not
taxed. General partners are held personally responsible for the partnership’s liabilities.
If the Partnership operates under a trade name, the trade name must be registered with the
Vermont Secretary of State.
More Information:
- Business Types
- Federal Small Business / Self-Employment Info
- Guide to VT Business Taxes
- Interest Rates
- List of Major Vermont Taxes
- Local Option Taxes
- Net Operating Loss
- Regulations
- Streamlined Sales Tax
- Tax Charts
- Tax Credits
- Technical Bulletins
- Transient Vendors
- Voluntary Disclosure
- Withholding Information
Need Assistance?
Taxpayer Services
802.828.2551
Form Orders via E-mail: taxforms@state.vt.us
