The Vermont Statutes Online

Title 11A: Vermont Business Corporations

Chapter 003: Purposes and Powers

• § 3.01. Purposes

  (a) Every corporation incorporated under this title has the purpose of engaging in any lawful business unless a more limited purpose is set forth in the articles of incorporation.

  (b) A corporation engaging in a business that is subject to regulation under another statute of this State may incorporate under this title only if permitted by, and subject to all limitations of, the other statute, including:

  (1) banks, savings and loan associations, credit unions, and other financial institutions regulated under Title 8;

  (2) insurance companies regulated under Title 8;

  (3) public service utilities regulated under Title 30;

  (4) railroad companies regulated under Title 19; and

  (5) professional corporations under 11 V.S.A. chapter 3 or 4. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994; amended 2001, No. 77 (Adj. Sess.), § 4.)

• § 3.02. General powers

  Unless its articles of incorporation provide otherwise, every corporation has perpetual duration and succession in its corporate name and has the same powers as an individual to do all things necessary and convenient to carry out its business and affairs, including without limitation power:

  (1) To sue and be sued, complain and defend in its corporate name. A court or other adjudicative body shall permit a corporation to appear through a nonattorney representative if:

  (A) the proposed nonattorney representative is authorized to represent the corporation;

  (B) the proposed nonattorney representative demonstrates adequate legal knowledge and skills to represent the organization without unduly burdening the opposing party or the court; and

  (C) the proposed nonattorney representative shares a common interest with the corporation.

  (2) To have a corporate seal, which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing it or in any other manner reproducing it.

  (3) To make and amend bylaws, not inconsistent with its articles of incorporation or with the laws of this State, for managing the business and regulating the affairs of the corporation.

  (4) To purchase, receive, lease, or otherwise acquire, and own, hold, improve, use, and otherwise deal with, real or personal property, or any legal or equitable interest in property, wherever located.

  (5) To sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of the property.

  (6) To purchase, receive, subscribe for, or otherwise acquire; own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of; and deal in or with shares or other interests in, or obligations of, any other entity.

  (7) To make contracts, including partnership agreements, and guarantees, and incur liabilities, borrow money at such rates of interest as the corporation may determine, issue its notes, bonds, and other obligations (which may be convertible into or include the option to purchase other securities of the corporation), and secure any of its obligations by covenants requiring the consent of another person to an action to be taken by the corporation and by mortgage or pledge of any of its property, franchises, or income.

  (8) To lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment.

  (9) To be a promoter, partner, member, associate, or manager of any partnership, joint venture, trust, or other entity.

  (10) To conduct its business, locate offices, and exercise the powers granted by this title within or outside this State.

  (11) To elect directors and appoint officers, employees, and agents of the corporation, define their duties, fix their compensation, and lend them money and credit.

  (12) To pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans, and benefit or incentive plans for any or all of its current or former directors, officers, employees, and agents.

  (13) To make donations for the public welfare or for charitable, scientific, or educational purposes.

  (14) To transact any lawful business that will aid governmental policy.

  (15) To make payments or donations, or do any other act, not inconsistent with law, that furthers the business and affairs of the corporation.

  (16) To delegate to any other person the authority to act for or in the name of the corporation. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 3.03. [Reserved.]

• § 3.04. Ultra vires

  (a) Except as provided in subsection (b) of this section, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.

  (b) A corporation’s power to act may be challenged:

  (1) in a proceeding by a shareholder against the corporation to enjoin the act;

  (2) in a proceeding by the corporation, directly, derivatively, or through a receiver, trustee, or other legal representative, against an incumbent or former director, officer, employee, or agent of the corporation; or

  (3) in a proceeding by the attorney general under section 14.30 of this title.

  (c) In a shareholder’s proceeding under subdivision (b)(1) of this section, to enjoin an unauthorized corporate act, the court may enjoin or set aside the act, if equitable and if all affected persons are parties to the proceeding, and may award damages for loss (other than anticipated profits) suffered by the corporation or another party because of enjoining the unauthorized act. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)