The Vermont Statutes Online

Title 11A: Vermont Business Corporations

Chapter 016: Records and Reports

• Subchapter 001: RECORDS

• § 16.01. Corporate powers

  (a) A corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, and records of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation.

  (b) A corporation shall maintain appropriate accounting records.

  (c) A corporation or its agent shall maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each.

  (d) A corporation shall maintain its records in written form or in another form, including electronic form, capable of conversion into written form within a reasonable time.

  (e) A corporation shall keep a copy of the following records at its principal office (or, if none in this State, then the registered office):

  (1) its articles or restated articles of incorporation and all amendments to them currently in effect;

  (2) its bylaws or restated bylaws and all amendments to them currently in effect;

  (3) resolutions adopted by its board of directors creating one or more classes or series of shares, and fixing their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding;

  (4) the minutes of all shareholders’ meetings, and records of all action taken by shareholders without a meeting;

  (5) all written or electronic communications to shareholders generally within the past three years, including the financial statements furnished for the past three years under section 16.20 of this title;

  (6) a list of the names and business addresses of its current directors and officers; and

  (7) its most recent annual report delivered to the Secretary of State under section 16.22 of this title. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994; amended 2007, No. 190 (Adj. Sess.), § 100, eff. June 6, 2008.)

• § 16.02. Inspection of records by shareholders

  (a) A shareholder of a corporation is entitled to inspect and copy, during regular business hours at the corporation’s principal office, or, if none in this State, the registered office, any of the records of the corporation described in subsection 16.01(e) of this title if the shareholder gives the corporation written notice of the shareholder’s demand at least five business days before the date on which the shareholder wishes to inspect and copy. A shareholder of a close corporation as defined in section 20.02 of this title is also entitled to inspect and copy, pursuant to this subsection, such corporation’s record of shareholders.

  (b) A shareholder of a corporation is entitled to inspect and copy, during regular business hours at a reasonable location specified by the corporation, any of the following records of the corporation if the shareholder meets the requirements of subsection (c) of this section and gives the corporation written notice of his or her demand at least five business days before the day on which he or she wishes to inspect and copy:

  (1) accounting records of the corporation; and

  (2) the record of shareholders.

  (c) A shareholder may inspect and copy the records described in subsection (b) of this section only if:

  (1) the shareholder establishes that the shareholder’s demand is made in good faith and for a proper purpose;

  (2) the shareholder describes with reasonable particularity the shareholder’s purpose and the records the shareholder desires to inspect; and

  (3) the records are directly connected with the shareholder’s purpose.

  (d) The right of inspection granted by this section may not be abolished or limited by a corporation’s articles of incorporation or bylaws.

  (e) This section does not affect:

  (1) the right of a shareholder to inspect records under section 7.20 of this title or, if the shareholder is in litigation with the corporation, to the same extent as any other litigant;

  (2) the power of a court, independently of this title, to compel the production of corporate records for examination.

  (f) For purposes of this section, “shareholder” includes a beneficial owner whose shares are held in a voting trust or by a nominee on his or her behalf. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 16.03. Scope of inspection right

  (a) A shareholder’s agent or attorney has the same inspection and copying rights as the shareholder he or she represents.

  (b) The right to copy records under section 16.02 of this title includes, if reasonable, the right to receive copies made by photocopy, or other means.

  (c) The corporation may impose a reasonable charge, covering the costs of labor and material, for copies of any documents provided to the shareholder. The charge may not exceed the estimated cost of production or reproduction of the records.

  (d) The corporation may comply with a shareholder’s demand to inspect the record of shareholders under subsection 16.02(a) and subdivision 16.02(b)(2) of this title by providing the shareholder with a list of its shareholders that was compiled no earlier than the date of the shareholder’s demand. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 16.04. Court-ordered inspection

  (a) If a corporation does not allow a shareholder who complies with subsection 16.02(a) of this title to inspect and copy any records required by that subsection to be available for inspection, the Superior Court of the county where the corporation’s principal office (or, if none in this State, then the registered office) is located may summarily order inspection and copying of the records demanded at the corporation’s expense upon application of the shareholder.

  (b) If the corporation does not within a reasonable time allow shareholders to inspect and copy any other record, the shareholder who complies with subsections 16.02(b) and (c) of this title may apply to the Superior Court of the county where the corporation’s principal office (or, if none in this State, then the registered office) is located for an order to permit inspection and copying of the records demanded. The court shall dispose of an application under this subsection on an expedited basis.

  (c) If the court orders inspection and copying of the records demanded, it shall also order the corporation to pay the shareholder’s costs (including reasonable counsel fees) incurred to obtain the order unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the shareholder to inspect the records demanded.

  (d) If the court orders inspection and copying of the records demanded, it may impose reasonable restrictions on the use and distribution of the records by the demanding shareholder. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• Subchapter 002: REPORTS

• § 16.20. Financial statements for shareholders

  (a) A corporation shall furnish its shareholders annual financial statements, which may be consolidated or combined statements of the corporation and one or more of its subsidiaries, as appropriate, that include a balance sheet as of the end of the fiscal year, an income statement for that year, and a statement of changes in shareholders’ equity for the year unless that information appears elsewhere in the financial statements. If financial statements are prepared for the corporation on the basis of generally accepted accounting principles, the annual financial statements must also be prepared on that basis.

  (b) If the annual financial statements are reported upon by a public accountant, his or her report must accompany them. If not, the statements must be accompanied by a statement of the president or the person responsible for the corporation’s accounting records:

  (1) stating his or her reasonable belief whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation; and

  (2) describing any respect in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.

  (c) A corporation shall mail the annual financial statements to each shareholder within 120 days after the close of each fiscal year. Thereafter, on written request from a shareholder who was not mailed the statements, the corporation shall mail to the shareholder the latest financial statements. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 16.21. Other reports to shareholders

  (a) If a corporation indemnifies or advances expenses to a director under section 8.51, 8.52, 8.53, or 8.54 of this title in connection with a proceeding by or in the right of the corporation, the corporation shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders’ meeting.

  (b) If a corporation issues or authorizes the issuance of shares for promissory notes, the corporation shall report in writing to the shareholders the number of shares authorized or issued, and the consideration received by the corporation, with or before the notice of the next shareholders’ meeting. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 16.22. Annual report for Secretary of State

  (a) Each domestic corporation, and each foreign corporation authorized to transact business in this State, shall deliver to the Secretary of State for filing an annual report that sets forth:

  (1) the name of the corporation and the state or country under whose law it is incorporated;

  (2) the address of its registered office and the name of its registered agent at that office in this State;

  (3) the address of its principal office;

  (4) the names and business addresses of its directors and the president, secretary, treasurer, and all other officers with policy-making authority.

  (b) Information in the annual report must be current as of the date the annual report is executed on behalf of the corporation.

  (c) The annual report shall be delivered to the Secretary of State within two and one-half months after the expiration of the corporation’s fiscal year.

  (d) If an annual report does not contain the information required by this section, the Secretary of State shall promptly notify the reporting domestic or foreign corporation in writing and return the report to it for correction. If the report is corrected to contain the information required by this section and delivered to the Secretary of State within 30 days after the effective date of notice, it is deemed to be timely filed.

  (e) Listing the name of the registered agent and the address of the registered office does not effectuate a change in such agent or office unless the report also contains the requirements of section 5.02 of this title. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)