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Title 11B: Nonprofit Corporations

Chapter 001: GENERAL PROVISIONS

  • Subchapter 001: Short Title and Reservation of Power
  • § 1.01. Short title

    This title shall be known and may be cited as the "Vermont Nonprofit Corporation Act."  (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

  • § 1.02. Reservation of power

    Nothing contained in this title shall give the right to impair the obligation of any charter, or any amendment thereof, granted or made prior to November 19, 1851; nor shall the General Assembly enact any law that would so affect any charter or amendment passed prior to such date. Subject to the foregoing restriction, any act creating, continuing, altering, or renewing a corporation or body politic may be repealed by the General Assembly, as the public good requires; and any such act may be altered or amended by the General Assembly, as the public good requires, if within the exception specified in Vermont Constitution chapter II section 69. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)


  • Subchapter 002: Filing Documents
  • § 1.20. Filing requirements

    (a) A document must satisfy the requirements of this section, and of any other section that adds to or varies these requirements, to be entitled to filing by the Secretary of State.

    (b) The document must contain the information required by this title. It may contain other information as well.

    (c) The document must be typewritten or printed or, if electronically transmitted, it must be in a format that can be retrieved or reproduced in typewritten or printed form or in an electronic format prescribed by the Secretary of State.

    (d) The document must be in the English language. However, a corporate name need not be in English if written in English letters or Arabic or Roman numerals, and the certificate of existence required of foreign corporations need not be in English if accompanied by a reasonably authenticated English translation.

    (e) The document must be executed:

    (1) by the presiding officer of its board of directors of a domestic or foreign corporation, its president, or by another of its officers;

    (2) if directors have not been selected or the corporation has not been formed by an incorporator; or

    (3) if the corporation is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary.

    (f) The person executing a document shall sign it and state beneath or opposite the signature his or her name and the capacity in which he or she signs. The document may, but need not, contain:

    (1) the corporate seal;

    (2) an attestation by the secretary or an assistant secretary; or

    (3) an acknowledgement, verification, or proof.

    (g) If the Secretary of State has prescribed a mandatory form or electronic format for a document under section 1.21 of this title, the document must be in or on the prescribed form.

    (h) The document must be delivered to the Office of the Secretary of State for filing and must be accompanied by one exact or conformed copy (except as provided in sections 5.03 and 15.09 of this title), and the correct filing fee. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2009, No. 78 (Adj. Sess.), § 25, eff. April 15, 2010.)

  • § 1.21. Forms

    (a) The Secretary of State may prescribe the form or electronic format of and furnish on request, forms or specifications for formats for:

    (1) an application for a certificate of existence;

    (2) a foreign corporation's application for a certificate of authority to transact business in this State;

    (3) a foreign corporation's application for a certificate of withdrawal; and

    (4) the biennial report.

    (b) The Secretary of State may prescribe and furnish on request forms for other documents required or permitted to be filed by this title but their use is not mandatory. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2009, No. 78 (Adj. Sess.), § 26, eff. April 15, 2010.)

  • § 1.22. Filing; service and copying fees

    The Secretary of State shall collect the following fees when the documents described in this section are delivered to the Office of the Secretary of State for filing:

    (1) Articles of incorporation                                                   $125.00

    (2) Application for reserved name                                          $  20.00

    (3) Transfer of reserved name                                                  No fee

    (4) Application for registered name                                       $  25.00

    (5) Renewal of registered name                                              $  25.00

    (6) Statement of change of registered agents or

    registered office, or both                                            $   25.00

            and

         not to

       exceed

              $1,000.00

     per filer

    per calen-

             dar

           year.

    (7) Agent's statement of registration                                         No fee

    (8) Amendment of articles of association                               $   25.00

    (9) Restatement of articles of association                               $   25.00

    (10) Articles of merger                                                           $   50.00

    (11) Articles of dissolution                                                        No fee

    (12) Articles of revocation of dissolution                               $     5.00

    (13) Application for reinstatement following administrative

    dissolution                                                                   $   25.00

    (14) Application for certificate of authority for a foreign

    corporation                                                                  $ 100.00

    (15) Application for amended certificate of authority            $   25.00

    (16) Application for certificate of withdrawal                       $     5.00

    (17) Biennial report                                                                $   20.00

    except that a corporation which certifies to the Secretary of State, on a form  approved by the Secretary, that it did not compensate its officers, directors, or employees during the prior calendar year shall be exempt from the fee required by this subdivision.

    (18) Articles of correction                                                      $    15.00

    (19) Application for certificate of good standing                   $    25.00

    (20) Certified copy of any filed document                             $    25.00

     

    (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 1997, No. 59, § 89, eff. June 30, 1997; 2003, No. 70 (Adj. Sess.), § 16, eff. March 1, 2004; 2013, No. 72, § 10.)

  • § 1.23. Effective date of document

    (a) Except as provided in subsection (b) of this section, subsection 1.24(c) of this title, and section 2.03 of this title, a document is effective:

    (1) at the time of filing on the date it is filed, as evidenced by any means the Secretary of State may use for the purpose of recording the date and time of filing; or

    (2) at the time specified in the document as its effective time on the date it is filed.

    (b) A document may specify a delayed effective time and date, and if it does so the document becomes effective at the time and date specified. If a delayed effective date but no time is specified, the document is effective at the close of business on that date. A delayed effective date for a document may not be later than the 90th day after the date filed. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2009, No. 78 (Adj. Sess.), § 27, eff. April 15, 2010.)

  • § 1.24. Correcting filed document

    (a) A domestic or foreign corporation may correct a document filed by the Secretary of State if the document:

    (1) contains an incorrect statement; or

    (2) was defectively executed, attested, sealed, verified, or acknowledged; or

    (3) was undeliverable because the electronic transmission was defective.

    (b) A document is corrected:

    (1) by preparing articles of correction that

    (A) describe the document (including its filing date) or attach a copy of it to the articles;

    (B) specify the incorrect statement and the reason it is incorrect or the manner in which the execution was defective; and

    (C) correct the incorrect statement or defective execution; and

    (2) by delivering the articles of correction to the Secretary of State.

    (c) Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2009, No. 78 (Adj. Sess.), § 28, eff. April 15, 2010.)

  • § 1.25. Filing duty of Secretary of State

    (a) If a document delivered to the Office of the Secretary of State for filing satisfies the requirements of section 1.20 of this title, the Secretary of State shall file it.

    (b) The Secretary of State files a document by recording it as "Filed," together with the Secretary of State's name and official title on the date and the time of receipt, on both the document and on the record of the receipt for the filing fee. After filing a document, except as provided in sections 5.03 and 15.10 of this title, the Secretary of State shall deliver a copy of the document to the domestic or foreign corporation or its representative.

    (c) Upon refusing to file a document, the Secretary of State shall return it to the domestic or foreign corporation or its representative within five days after the document was delivered, together with a brief, written explanation of the reason or reasons for the refusal.

    (d) The Secretary of State's duty to file documents under this section is ministerial. Filing or refusal to file a document does not:

    (1) affect the validity or invalidity of the document in whole or in part;

    (2) relate to the correctness or incorrectness of information contained in the document; or

    (3) create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2009, No. 78 (Adj. Sess.), § 29, eff. April 15, 2010.)

  • § 1.26. Appeal from Secretary of State's refusal to file document

    (a) If the Secretary of State refuses to file a document delivered for filing to the Secretary of State's Office, the domestic or foreign corporation may appeal the refusal to the Superior Court in the county where the corporation's principal office, or if there is none in this State, its registered office, is or will be located. The appeal is commenced by petitioning the court to compel filing the document and by attaching to the petition the document and the Secretary of State's explanation of the refusal to file.

    (b) The court may summarily order the Secretary of State to file the document or take other action the court considers appropriate.

    (c) The court's final decision may be appealed as in other civil proceedings. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

  • § 1.27. Evidentiary effect of copy of filed document

    A certificate from the Secretary of State delivered with a copy of a document filed with the Secretary of State is conclusive evidence that the document is on file with the Secretary of State. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2009, No. 78 (Adj. Sess.), § 30, eff. April 15, 2010.)

  • § 1.28. Certificate of good standing

    (a) Any person may apply to the Secretary of State to furnish a certificate of good standing for a domestic or foreign corporation.

    (b) The certificate of good standing sets forth:

    (1) the domestic corporation's corporate name or the foreign corporation's corporate name used in this State;

    (2) that:

    (A) the domestic corporation is duly incorporated under the law of this State, the date of its incorporation, and the period of its duration if less than perpetual; or

    (B) the foreign corporation is authorized to transact business in this State;

    (3) that all fees and penalties owed to this State under section 1.22 of this title have been paid if:

    (A) payment is reflected in the records of the Secretary of State; and

    (B) nonpayment affects the good standing of the domestic or foreign corporation;

    (4) that its most recent biennial report required by section 16.22 of this title has been delivered to the Secretary of State; and

    (5) that articles of dissolution have not been filed.

    (c) Subject to any qualification stated in the certificate, a certificate of good standing issued by the Secretary of State may be relied upon as conclusive evidence that the domestic or foreign corporation is in existence or is authorized to transact business in this State.

    (d) Subject to any qualification stated in the certificate, a certificate of good standing issued by the Secretary of State may be taken as prima facie evidence of the facts stated therein. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

  • § 1.29. Signing false documents

    (a) No person may sign a document, knowing that the document is false in any material respect, and intending that the document be delivered to the Secretary of State for filing.

    (b) A person who violates the provisions of subsection (a) of this section shall be fined not more than $1,000.00.

    (c) A person harmed by reliance on a false document filed in violation of the provisions of subsection (a) of this section may bring an action against the person signing and filing such document for damages and such further relief as the court deems proper. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)


  • Subchapter 003: Secretary of State
  • § 1.30. Powers

    The Secretary of State has the power reasonably necessary to perform the duties required of the Secretary of State's Office by this title. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)


  • Subchapter 004: Definitions
  • § 1.40. Definitions

    As used in this title:

    (1) "Approved by (or approval by) the members" means approved or ratified when the votes cast by the members favoring the action exceed the votes cast opposing the action, at a duly held meeting at which a quorum is present or by a written ballot or written consent in conformity with this title or by the affirmative vote, written ballot or written consent of such greater proportion, including the votes of all the members of any class, unit or grouping as may be provided in the articles, bylaws or this title for any specified member action.

    (2) "Articles of incorporation" or "articles" include amended and restated articles of incorporation and articles of merger.

    (3) "Board" or "board of directors" means the board of directors except that no person or group of persons are the board of directors because of powers delegated to that person or group pursuant to section 8.01 of this title.

    (4) "Bylaws" means the code or codes of rules (other than the articles) adopted pursuant to this title for the regulation or management of the affairs of the corporation, stored or depicted in any tangible or electronic medium, and irrespective of the name or names by which such rules are designated.

    (5) "Class" refers to a group of memberships which have the same rights with respect to voting, dissolution, redemption, and transfer. For the purpose of this section, rights shall be considered the same if they are determined by a formula applied uniformly.

    (6) "Corporation" means public benefit and mutual benefit corporation.

    (7) "Delegates" means those persons elected or appointed to vote in a representative assembly for the election of a director or directors or on other matters.

    (8) "Deliver" or "delivery" means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery, and electronic transmission.

    (9) "Directors" means individuals, designated in the articles or bylaws or elected by the incorporators, and their successors and individuals elected or appointed by any other name or title to act as members of the board. The term "trustees" may be used instead of "directors" and shall have the same meaning.

    (10) "Distribution" means the payment of a dividend or any part of the income or profit of a corporation to its members, directors, or officers.

    (11) "Domestic corporation" means a corporation.

    (12) "Effective date of notice" is defined in section 1.41 of this title.

    (13) "Employee" includes an officer but not a director. A director may accept duties that make the director an employee.

    (14) "Entity" includes corporation and foreign corporation; business corporation and foreign business corporation; profit and nonprofit unincorporated association; business trust, estate, partnership, trust, and two or more persons having a joint or common economic interest; and state, United States; and foreign government.

    (15) "File," "filed," or "filing" means filed in the Office of the Secretary of State.

    (16) "Foreign corporation" means a corporation organized under a law other than the law of this State which would be a nonprofit corporation if formed under the laws of this State.

    (17) "Governmental subdivision" includes authority, county, district, and municipality.

    (18) "Includes" denotes a partial definition.

    (19) "Individual" includes the estate of an individual who is incompetent.

    (20) "Means" denotes a complete definition.

    (21) "Member" means (without regard to what a person is called in the articles or bylaws) any person or persons who on more than one occasion, pursuant to a provision of a corporation's articles or bylaws, have the right to vote for the election of a director or directors. A person is not a member by virtue of any of the following:

    (A) any rights such person has as a delegate;

    (B) any rights such person has to designate a director or directors;

    (C) any rights such person has as a director; or

    (D) any rights of association, not including the right to vote for the election of a director or directors, created in the corporation's articles of incorporation or bylaws for persons who participate in the activities of the corporation.

    (22) "Membership" refers to the rights and obligations a member or members have pursuant to a corporation's articles, bylaws, and this title.

    (23) "Mutual benefit corporation" means a domestic corporation which is required to be a mutual benefit corporation pursuant to section 17.05 of this title or is formed as a mutual benefit corporation pursuant to chapter 2 of this title.

    (24) "Notice" is defined in section 1.41 of this title.

    (25) "Person" includes any individual or entity.

    (26) "Principal office" means the office (in or outside this State) so designated in the biennial report filed pursuant to section 16.22 of this title where the principal office of a domestic or foreign corporation is located.

    (27) "Proceeding" includes civil suit and criminal, administrative, and investigatory action.

    (28) "Public benefit corporation" means a domestic corporation which is required to be a public benefit corporation pursuant to section 17.05 of this title or is formed as a public benefit corporation pursuant to chapter 2 of this title.

    (29) "Record date" means the date established under chapter 6 or 7 of this title on which a corporation determines the identity of its members for the purposes of this title.

    (30) "Secretary" means the corporate officer to whom the board of directors has delegated responsibility under subsection 8.40(b) of this title for custody of the minutes of the directors' and members' meetings and for authenticating the records of the corporation.

    (31) "State," when referring to a part of the United States, includes a state and commonwealth (and their agencies and governmental subdivisions) and a territory, and insular possession (and their agencies and governmental subdivisions) of the United States.

    (32) "United States" includes district, authority, bureau, commission, department, and any other agency of the United States.

    (33) "Vote" includes authorization by written ballot and written consent.

    (34) "Voting power" means the total number of votes entitled to be cast for the election of directors at the time the determination of voting power is made, excluding a vote which is contingent upon the happening of a condition or event that has not occurred at the time. Where a class is entitled to vote as a class for directors, the determination of voting power of the class shall be based on the percentage of the number of directors the class is entitled to elect out of the total number of authorized directors.

    (35) "Electronic transmission" or "electronically transmitted" means a process of communication not directly involving the physical transfer of paper that is suitable for the retention, retrieval, and reproduction of information by the recipient.

    (36) "Meeting" means any structured communications conducted by participants in person or through the use of an electronic or telecommunications medium permitting simultaneous or sequentially structured communications.

    (37) "Sign" or "signature" includes any manual, facsimile, conformed, or electronic signature. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2009, No. 78 (Adj. Sess.), § 31, eff. April 15, 2010; 2013, No. 96 (Adj. Sess.), § 43.)

  • § 1.41. Notice

    (a) Notice under this title must be in writing unless oral notice is authorized in the bylaws of the corporation and is reasonable under the circumstances.

    (b) Notice may be communicated in person; by telephone, voice mail, telegraph, teletype, facsimile, or other form of wire, wireless, or electronic communication; or by mail or private carrier, or other method of delivery. If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published; or by radio, television, or other form of public broadcast communication.

    (c) Notice to members. Written notice by a domestic or foreign corporation to its members, if in a comprehensible form, is effective when:

    (1) mailed first class postpaid and correctly addressed to the member's address as shown in the corporation's current record of member's; or

    (2) electronically transmitted to the member in a manner authorized by the member.

    (d) Notice to corporations. Written notice to a domestic or foreign corporation (authorized to transact business in this State) may be addressed to:

    (1) its registered agent at its registered office;

    (2) the corporation or its secretary at its principal office shown in its most recent biennial report; or

    (3) in the case of a foreign corporation that has not yet delivered a biennial report, the corporation or its secretary at its principal office shown in its application for a certificate of authority.

    (e) Except as provided in subsection (c) of this section, written notice, if in a comprehensible form, is effective at the earliest of the following:

    (1) when received;

    (2) five days after its deposit in the U.S. mail, as evidenced by the postmark, if mailed postpaid and correctly addressed;

    (3) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee.

    (f) Oral notice is effective when communicated if communicated in a comprehensible manner.

    (g) If this title prescribes notice requirements for particular circumstances, those requirements govern. If articles of incorporation or bylaws prescribe notice requirements, not inconsistent with this section or other provisions of this title, those requirements govern. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2009, No. 78 (Adj. Sess.), § 32, eff. April 15, 2010.)

  • § 1.42. Judicial relief

    (a) If for any reason it is impractical or impossible for any corporation to call or conduct a meeting of its members, delegates, or directors, or otherwise obtain their consent, in the manner prescribed by its articles, bylaws, or this title, then upon petition of a director, officer, delegate, member, or the Attorney General, the Superior Court may order that such a meeting be called or that a written ballot or other form of obtaining the vote of members, delegates, or directors be authorized, in such a manner as the court finds fair and equitable under the circumstances.

    (b) The court shall, in an order issued pursuant to this section, provide for a method of notice reasonably designed to give actual notice to all persons who would be entitled to notice of a meeting held pursuant to the articles, bylaws, and this title, whether or not the method results in actual notice to all such persons or conforms to the notice requirements that would otherwise apply. In a proceeding under this section the court may determine who the members or directors are.

    (c) The order issued pursuant to this section may dispense with any requirement relating to the holding of or voting at meetings or obtaining votes, including any requirement as to quorums or as to the number or percentage of votes needed for approval, that would otherwise be imposed by the articles, bylaws, or this title.

    (d) Whenever practical, any order issued pursuant to this section shall limit the subject matter of meetings or other forms of consent authorized to items, including amendments to the articles or bylaws, the resolution of which will or may enable the corporation to continue managing its affairs without further resort to this section; provided, however, that an order under this section may also authorize the obtaining of whatever votes and approvals are necessary for the dissolution, merger, or sale of assets.

    (e) Any meeting or other method of obtaining the vote of members, delegates, or directors conducted pursuant to an order issued under this section, and which complies with all the provisions of such order, is for all purposes a valid meeting or vote, as the case may be, and shall have the same force and effect as if it complied with every requirement imposed by the articles, bylaws, and this title. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)