The Vermont Statutes Online

Title 11: Corporations, Partnerships and Associations

Chapter 001: Corporations Generally

• Subchapter 001: Citation and Application

• §§ 1-4. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• Subchapter 002: Formation, Bylaws, and Meetings

• § 41. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• § 42. Specific purposes

  Subject to the provisions of this title, one or more persons may form a private corporation for the specific purposes and in the manner following:

  (1) To operate a regional clearinghouse and a cooperative loan plan, commonly called a central fund, or either, for those banks in the State which become stockholders or members of the corporation. Such corporations may be organized only with the consent of the Commissioner of Financial Regulation, with or without capital stock.

  (A) In addition to the powers conferred by this chapter, they shall have:

  (i) all the powers necessary or convenient for carrying out the purposes herein set forth, including the power to receive deposits of funds from a member bank and to administer the same, and to require such deposits from all member banks in uniform percentages, but not in excess of three percent, of the total deposits of any one bank;

  (ii) to assist member banks when they are temporarily in need of cash or hold investments which cannot readily be liquidated;

  (iii) to borrow money and to pledge its assets as security therefor;

  (iv) to issue scrip to the extent and with such security and under such regulations as the Commissioner of Financial Regulation, with the consent of the Governor, may approve;

  (v) to make loans to member banks and to guarantee the performance of any obligation of a member bank;

  (vi) to establish reserves, and to take over from member banks property, securities, or investments for the purpose of managing, liquidating, exchanging, or adjusting the same.

  (B) Such corporations shall not be subject to the provisions of 8 V.S.A. chapters 1, 3, 21, 29, and 8 V.S.A. part 3 and 9 V.S.A. chapter 131; but their articles of association and bylaws shall be subject to the approval of the Commissioner of Financial Regulation. They shall only invest their funds in securities approved by the Commissioner of Financial Regulation and shall be subject to inspection and examination by the Commissioner or his or her representative the same as State banks.

  (C) Any bank organized under the laws of this State and any national bank in the State, with the approval of the Comptroller of the Currency, may become a stockholder or member of such a corporation under the terms and conditions prescribed in its charter or bylaws. Such bank may subscribe for and hold shares in the capital stock of such a corporation, may make the required deposits hereinabove provided for and to the extent the Commissioner of Financial Regulation may approve, and may invest in and hold debentures or other obligations of such corporation. A director or executive officer of a bank which is a stockholder of such corporation shall be eligible to the office of director of such corporation.

  (2) To operate a corporation for the rehabilitation of individuals and families by enabling them to secure subsistence and gainful employment from the soil, from coordinate and affiliated industries and enterprises and otherwise, and to receive and administer money for that purpose which may become available from any source. Such corporations shall have all the powers of corporations organized under this chapter and in addition thereto may loan money and secure the payment thereof by mortgage, pledge, or lien, insure or guarantee any indebtedness incurred by others, and become secured for so doing by mortgage, pledge, or lien. Such corporations shall not be organized for profit, and shall not be subject to taxation, nor shall any stock or indebtedness of such corporations or any evidence thereof be taxable to any holder thereof under any provision of law. The capital stock of such corporations may be with or without par value and the amount thereof, notwithstanding the provisions of this title, may be less than $500.00 and in case the stock has no par value then the number of shares of such stock may be less than ten, representing less than $500.00. The Governor may designate any such corporation as his or her agent or an agency of the State to carry on rehabilitation activities within the State. Such corporations shall not be subject to the provisions of 8 V.S.A. chapters 1, 3, 21, and 29 and 8 V.S.A. part 3 and 9 V.S.A. chapter 131, or to the provisions of section 131 of this title. (Amended 1969, No. 286 (Adj. Sess.), § 3, ratified 1971, No. 51, § 19; 1989, No. 225 (Adj. Sess.), § 25(b); 1995, No. 180 (Adj. Sess.), § 38(a); 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.)

• §§ 43-49. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• § 50. Reorganization of corporations formed prior to 1915

  If the Secretary of State receives articles of association of a corporation to be formed under this chapter for the purpose of acquiring the assets and continuing the business of a corporation formed by special act or under the general laws of this State prior to April 1, 1915, and such fact is established by affidavit to his or her satisfaction, he or she shall record such articles of association of such corporation on payment of a fee of $15.00 and such corporation may assume the name of the corporation whose assets and business are to be so acquired. (Amended 1963, No. 37, § 1; 1967, No. 278 (Adj. Sess.), § 3.)

• §§ 61-67. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• Subchapter 003: Powers and Amendments

• §§ 101-107. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• § 108. Banks, trust and mutual insurance companies

  A corporation organized under the provisions of 8 V.S.A. chapter 202 or 203, to conduct the business of a financial institution, and a mutual insurance company organized under the provisions of 8 V.S.A. chapter 101, may make such contributions for religious, charitable, scientific, literary, or educational purposes as are authorized by its directors or trustees to an amount not to exceed five percent of its net income for the previous calendar year computed in the manner specified by the Internal Revenue Code in effect during the year applicable for corporations. Contributions in excess of the five percent of the net income may be made by a vote of its stockholders, depositors, or members. (Amended 1967, No. 74, eff. April 6, 1967; 2011, No. 21, § 10.)

• §§ 131-133. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• §§ 161-168. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• §§ 191-195. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• § 196. Power of historical corporations to amend articles

  (a) A corporation, not organized for profit, existing either by special act under the general law, formed for the purpose of erecting and maintaining monuments for the commemoration of historical events, or for the purpose of caring for and maintaining an historical monument owned by the State or located on its land, may, by vote of a majority of its members, amend its charter or articles of association so as to include therein the following powers:

  (1) to own, establish, manage, and maintain a museum for the preservation of historical objects;

  (2) to maintain and preserve other historical monuments and markers;

  (3) to provide or remove limitations as to the number of its members; and

  (4) to provide for the payment of membership dues and for different classes of memberships with varying rates of dues.

  (b) When such amendment is adopted, a certificate thereof shall be sent to the Secretary of State, executed by the president and clerk, or by a majority of the directors or trustees. The Secretary shall, without fee, record the same if it conforms generally to provisions of this chapter.

• Subchapter 004: Directors and Officers

• §§ 221-230. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• § 231. Acknowledgments by stockholder or officer

  A person legally qualified to take acknowledgments shall not be disqualified to take such acknowledgments to an instrument in which a corporation is a party, by reason of his or her being a stockholder in or an officer or employee of such corporation.

• Subchapter 005: Stock and Stockholders

• §§ 261-272. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• § 273. Public service corporations, powers of Commission

  In authorizing the issue by a corporation, subject to its jurisdiction, of stock without par value as provided by section 262 of this title, the Public Utility Commission shall ascertain the amount of money that is reasonably necessary for the corporation for which such issue of stock has been authorized by the corporation. The Commission shall fix the number of additional shares to be issued and the price per share at such number and prices as in its opinion the public interests shall require, taking into consideration the outstanding securities of the corporation, the value of its property devoted to the public use, the principal market value of such additional shares, and any other pertinent matters. (Amended 1959, No. 329 (Adj. Sess.), § 39, eff. March 1, 1961; 2017, No. 53, § 12.)

• § 274. Attachment and sale of stock

  Shares of the capital stock in a private corporation may be attached by actually seizing the certificate, or certificates, or by leaving a copy of the attachment with the clerk of such corporation, and such attachment shall be valid except as to holders for value. After receiving notice of the attachment, if the defendant transfers such stock or, if he or she has not previously transferred or pledged such stock, he or she refuses to deliver the same to the attaching officer on demand, he or she shall be liable for the conversion of the same. The purchaser of such stock at an execution sale shall cause the certificate, or certificates, of such stock with an attested copy of the execution and officers’ return thereon to be left with the clerk of the corporation within 12 days after the sale, and the title of the stock so sold shall vest in the purchaser.

• § 275. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• § 276. Repealed. 1959, No. 262, § 37.

• § 277. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• §§ 301-322. Repealed. 1966, No. 29, § 3.

• §§ 361-363. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• §§ 381-383. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• Subchapter 006: Books, Records and Reports

• §§ 421-423. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• § 441. Corporation to produce books on notice

  (a) A corporation doing business within this State, whether organized under the laws of this or any other state or country, when notice therefor is served upon it according to the provisions of section 442 of this title, shall produce before any court, magistrate, grand jury, tribunal, or commission, acting under the authority of this State, all books, documents, correspondence, memoranda, papers, and data which may contain any information concerning any suit, proceedings, action, charge, or subject of inquiry pending before or to be determined by the court, magistrate, grand jury, tribunal, or commission, except a civil action in a Superior Court, and which have been made or kept at any time within this State, and are in the custody or control of the corporation in this State or elsewhere at the time of service of the notice upon it.

  (b) When notice therefor is served upon it according to the provisions of section 442 of this title, the corporation shall produce before any court, magistrate, grand jury, tribunal, or commission acting under the authority of this State, all books, documents, correspondence, memoranda, papers, and data which may contain any information concerning any suit, proceedings, action, charge, or subject of inquiry pending before or to be determined by the court, magistrate, grand jury, tribunal, or commission, except a civil action in a Superior Court, and which in any way relate to or contain entries, data, or memoranda concerning any transaction within this State or with any party residing or having a place of business within this State, and which are in the custody or control of the corporation in this State or elsewhere at the time of service of notice upon it. (Amended 1971, No. 185 (Adj. Sess.), § 27, eff. March 29, 1972; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 2009, No. 154 (Adj. Sess.), § 64.)

• § 442. Notice for production

  Such notice to produce shall issue from the court, magistrate, tribunal, or commission before which the production is required. The notice shall describe in a general way what is required to be produced, and shall state the time when and place where the production is required. Service of the notice shall be made in the same manner as the law provides for the service of a summons upon such corporation, and shall give such corporation at least six days’ time within which to comply. When such corporation has no officer, agent, or attorney to receive service of process as provided by law, service of the notice may be made upon the manager of its business within this State, or the person in charge of its property within this State, or upon its attorney within this State, or upon the Secretary of State, in the same manner as the law provides for the service of a summons.

• § 443. Contempt

  When such corporation, without reasonable cause, neglects or refuses to comply with the requirement of such notice, it may be punished as for contempt by the court having jurisdiction in the premises to punish for contempt. Execution may issue for the collection of such fine as may be imposed for such contempt. The execution shall be served and all proceedings thereunder be governed according to the law relating to service and return of final process issuing from Superior Court. (Amended 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974.)

• § 444. Injunction and receivership

  Upon petition therefor made by the State’s Attorney of the county in which such judgment for contempt is rendered, or by the Attorney General, the Superior Court may enjoin a corporation which has been adjudged in contempt under section 443 of this title from further exercising its corporate functions within this State, and if necessary for the protection of the creditors of such corporation, shall appoint a receiver to take possession of the property and estate of such corporation situated within this State. The receiver shall take, hold, administer, and dispose of such property and estate under the orders and directions of such Superior Court. Such court or any presiding judge of the Superior Court may grant a temporary injunction, appoint a temporary receiver, or make such other interlocutory orders or decrees as may be required to carry out the provisions of this section. (Amended 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974.)

• §§ 461-464. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• Subchapter 007: Dissolution and Termination [Repealed]

• §§ 491-495. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• §§ 511-516. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• §§ 531, 532. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• §§ 551, 552. Repealed. 1971, No. 237 (Adj. Sess.), § 100.

• Subchapter 008: Private Foundations

• § 561. Prohibited acts

  No corporation which is a “private foundation” as defined in section 509(a) of the Internal Revenue Code of 1986, shall:

  (1) engage in any act of “self-dealing” (as defined in section 4941(d) of the Internal Revenue Code of 1986), which would give rise to any liability for the tax imposed by section 4941(a) of the Internal Revenue Code of 1986;

  (2) retain any “excess business holdings” (as defined in section 4943(c) of the Internal Revenue Code of 1986), which would give rise to any liability for the tax imposed by section 4943(a) of the Internal Revenue Code of 1986;

  (3) make any investment which would jeopardize the carrying out of any of its exempt purposes, within the meaning of section 4944 of the Internal Revenue Code of 1986, so as to give rise to any liability for the tax imposed by section 4944(a) of the Internal Revenue Code of 1986; and

  (4) make any “taxable expenditures” (as defined in section 4945(d) of the Internal Revenue Code of 1986) which would give rise to any liability for the tax imposed by section 4945(a) of the Internal Revenue Code of 1986. (1971, No. 112, § 1.)

• § 562. Distributions required

  Each corporation which is a “private foundation” as defined in section 509 of the Internal Revenue Code of 1986 shall distribute, for the purposes specified in its articles of organization, for each taxable year, amounts at least sufficient to avoid liability for the tax imposed by section 4942(a) of the Internal Revenue Code of 1986. (1971, No. 112, § 2.)

• § 563. Conformity with articles of association

  The provisions of sections 561 and 562 of this title shall not apply to any corporation to the extent that a court of competent jurisdiction shall determine that such application would be contrary to the terms of the articles of organization or other instrument governing such corporation or governing the administration of charitable funds held by it and that the same may not properly be changed to conform to such sections. (1971, No. 112, § 3.)

• § 564. Powers of Attorney General

  Nothing in this act shall impair the rights and powers of the courts or the Attorney General of this State with respect to any corporation. (1971, No. 112, § 4.)

• § 565. Trusts

  In the administration of any trust which is a “private foundation,” as defined in section 509 of the Internal Revenue Code of 1986, a “charitable trust,” as defined in section 4947(a)(1) of the Internal Revenue Code of 1986, or a “split-interest trust” as defined in section 4947(a)(2) of the Internal Revenue Code of 1986, the following acts shall be prohibited:

  (1) engaging in any act of “self-dealing” (as defined in section 4941(d) of the Internal Revenue Code of 1986), which would give rise to any liability for the tax imposed by section 4941(a) of the Internal Revenue Code of 1986;

  (2) retaining any “excess business holdings” (as defined in section 4943(c) of the Internal Revenue Code of 1954) which would give rise to any liability for the tax imposed by section 4943(a) of the Internal Revenue Code of 1986;

  (3) making any investments which would jeopardize the carrying out of any of the exempt purposes of the trust, within the meaning of section 4944 of the Internal Revenue Code of 1986, so as to give rise to any liability for the tax imposed by section 4944(a) of the Internal Revenue Code of 1986; and

  (4) making any “taxable expenditures” (as defined in section 4945(d) of the Internal Revenue Code of 1986) which would give rise to any liability for the tax imposed by section 4945(a) of the Internal Revenue Code of 1986;

  provided, however, that this section shall not apply either to those split-interest trusts or to amounts thereof which are not subject to the prohibitions applicable to private foundations by reason of the provisions of section 4947 of the Internal Revenue Code of 1986. (1971, No. 112, § 5.)

• § 566. Distribution required

  In the administration of any trust which is a “private foundation” as defined in section 509 of the Internal Revenue Code of 1986, or which is a “charitable trust” as defined in section 4947(a)(1) of the Internal Revenue Code of 1986, there shall be distributed, for the purposes specified in the trust instrument, for each taxable year, amounts at least sufficient to avoid liability for the tax imposed by section 4942(a) of the Internal Revenue Code of 1986. (1971, No. 112, § 6.)

• § 567. Effect of trust instrument

  The provisions of sections 565 and 566 of this title shall not apply to any trust to the extent that a court of competent jurisdiction shall determine that such application would be contrary to the terms of the instrument governing such trust and that the same may not properly be changed to conform to such sections. (1971, No. 112, § 7.)

• § 568. Future federal amendments

  All references to sections of the Internal Revenue Code of 1986 shall include future amendments to such sections and corresponding provisions of future internal revenue laws. (1971, No. 112, § 8.)