This article provides three key state business startup requirements for self-employed sole proprietors and general partners who run residential house cleaning businesses. Information from the Secretary of State, the Vermont Department of Taxes and selected city and county government sources were used to research this article.
Be aware that sole proprietor and general partner startup requirements in this state are always changing. Some requirements even vary from county to county. It is important that you call or visit your local county or city government to find out local requirements for residential house cleaning businesses and home-based businesses. This article is not intended to be exhaustive or a substitute for qualified legal or tax advice.
Business Name Registration
Sole proprietors and general partners who want a business name that does not include the owner(s) full names (for example, Janice Smith’s Cleaning Service or Martha Harris’ and Tom Graham’s Maid Service) need to find out whether the name they want to use is available in the state. Start with a statewide corporate business name search to avoid legal problems and customer confusion.
Then do an online search for names similar to the one you plan to use. For example, if you want to use the name, Crystal Clean Maid Service, do simple Google searches for “Crystal Clean Maid Service+Vermont” plus Crystal Clean Maid Service+your county” and “Crystal Clean Maid Service+your town or city”. Search beyond the first page of results. Go at least five pages deep into the search results to see if the name you want or similar names are being used in your state, county or city.
Sole proprietors and copartners (known in other states as general partners) should register for a DBA (“doing business as” name) or Trade Name for their business with the Vermont Secretary of State’s Office. Vermont operates under a “distinguishable on the record” business name standard. Under this standard, if the name you want is too similar to an already registered name, it will be rejected. Vermont and other states that operate under this standard, want to reduce the possibility of having businesses with the same or similar names. States that operate under the “distinguishable” standard believe the public should be clear about who owns a business.
Register a DBA or Trade Name through Vermont’s Online Business Portal.
Business License Registration
Sole proprietors and general partners do not have to apply for a state business license in Vermont. Residential house cleaning businesses should check with the county or town clerk’s office for local licensing requirements. Find a Vermont county or town clerk.
In Vermont, a general partnership is created when two or more owners form an oral or written agreement to start a business together. While general partners are not required to apply for a business license with the Secretary of State, copartners (general partners) must register a trade name. A written partnership agreement drawn up by a lawyer is important for both or all partners. Partnership agreements do not have to be filed with the state.
Sole proprietors and general partners may apply for an Employer Identification Number (EIN) from the IRS even if they do not plan to hire employees. Getting an EIN may make it easier to open a bank account and reduce your risk of identity theft. You can apply for an EIN online. In addition, some business registration forms will require a NAICS business classification number for the house cleaning industry.
Business Tax Registration
Sole proprietors and general partners (two or more self-employed individuals working in partnership) with no employees have to register with the Vermont Department of Taxes. Register online through the myVTax portal.
Residential house cleaning services are not taxable in Vermont. Cleaning businesses do not have to collect and send sales taxes to the Department of Taxes.
Sole proprietors and general partners pay tax on business income to the state of Vermont through their personal state tax return. Sole proprietors and general partners are responsible for paying estimated self-employment income taxes in Vermont (on Form IN-114) similar to the way self employment taxes are paid to the federal government. Get more information about estimated tax requirements by calling the Vermont Department of Taxes at (802) 828-2865 or Toll Free: (866) 828-2865 Monday, Tuesday, Thursday and Friday 7:45 a.m. to 4:30 p.m.
Unincorporated Vermont general partnerships that file a Form 1065 with the Federal government are required to pay a Business Entity Tax. The tax is a minimum $250.00 or a percentage of income per year. Get more information from a CPA or qualified tax preparer to find out if your partnership must file that return.
Selected Vermont City Licenses
Barre Business License: The city of Barre does not require a business license for housecleaning services.
Burlington Business License: The city of Burlington does not require a business license for housecleaning services.
Essex Junction Business License: The city of Essex Junction does not require a business license for housecleaning services.
Montpelier Business License: The city of Montpelier does not require a business license for housecleaning services.
Rutland Business License: The city of Rutland does not require a business license for housecleaning services.
South Burlington Business License: The city of South Burlington does not require a business license for housecleaning services.