The Vermont Statutes Online

Title 11B: Nonprofit Corporations

Chapter 006: Members and Membership

• Subchapter 001: Admission of Members

• § 6.01. Admission

  (a) A corporation may admit any person as a member. The articles or bylaws may establish criteria or procedures for admission.

  (b) No person shall be admitted as a member without his or her consent. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 6.02. Consideration

  Except as provided in its articles or bylaws, a corporation may admit members for no consideration or for such consideration as is determined by the board. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 6.03. No requirement of members

  A corporation is not required to have members. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• Subchapter 002: Rights and Obligations

• § 6.20. Differences in rights and obligations of members

  All members shall have the same rights and obligations with respect to voting, dissolution, redemption, and transfer, unless the articles or bylaws establish classes of membership with different rights or obligations. All members shall have the same rights and obligations with respect to any other matters, except as set forth in or authorized by the articles or bylaws. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 6.21. Transfers

  (a) Except as set forth in or authorized by the articles or bylaws, no member of a mutual benefit corporation may transfer a membership or any right arising therefrom.

  (b) No member of a public benefit corporation may transfer a membership or any right arising therefrom.

  (c) Where transfer rights have been provided, no restriction on them shall be binding with respect to a member holding a membership issued prior to the adoption of the restriction unless the restriction is approved by the members and the affected member. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 6.22. Member’s liability to third parties

  A member of a corporation is not, as such, personally liable for the acts, debts, liabilities, or obligations of the corporation. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 6.23. Member’s liability for dues, assessments, and fees

  A member may become liable to the corporation for dues, assessments, or fees; provided, however, that an article or bylaw provision or a resolution adopted by the board authorizing or imposing dues, assessments, or fees does not, of itself, create liability. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 6.24. Creditor’s action against member

  (a) No proceeding may be brought by a creditor to reach the liability, if any, of a member to the corporation unless final judgment has been rendered in favor of the creditor against the corporation and execution has been returned unsatisfied in whole or in part or unless such proceeding would be useless.

  (b) All creditors of the corporation, with or without reducing their claims to judgment, may intervene in any creditor’s proceeding brought under subsection (a) of this section to reach and apply unpaid amounts due the corporation. Any or all members who owe amounts to the corporation may be joined in such proceeding. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• Subchapter 003: Resignation; Termination

• § 6.30. Resignation

  (a) A member may resign at any time.

  (b) The resignation of a member does not relieve the member from any obligations the member may have to the corporation. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 6.31. Termination; expulsion and suspension

  (a) No member of a public benefit or mutual benefit corporation may be expelled or suspended, and no membership or memberships may be terminated or suspended except pursuant to a procedure which is fair and reasonable and is carried out in good faith.

  (b) A procedure is fair and reasonable when either:

  (1) the articles or bylaws set forth a procedure that provides:

  (A) not less than 15 days prior written notice of the expulsion, suspension or termination and the reasons therefor; and

  (B) an opportunity for the member to be heard, orally or in writing, not less than five days before the effective date of the expulsion, suspension, or termination by a person or persons authorized to decide that the proposed expulsion, termination, or suspension not take place; or

  (2) it is fair and reasonable taking into consideration all of the relevant facts and circumstances.

  (c) Any written notice given by mail must be given by first class or certified mail sent to the last address of the member shown on the corporation’s records.

  (d) Any proceeding challenging an expulsion, suspension, or termination, including a proceeding in which defective notice is alleged, must be commenced within one year after the effective date of the expulsion, suspension, or termination.

  (e) A member who has been expelled or suspended may be liable to the corporation for dues, assessments, or fees as a result of obligations incurred or commitments made prior to expulsion or suspension. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• § 6.32. Purchase of memberships

  (a) A public benefit corporation may not purchase any of its memberships or any right arising therefrom.

  (b) A mutual benefit corporation may purchase the membership of a member who resigns or whose membership is terminated for the amount and pursuant to the conditions set forth in or authorized by its articles or bylaws. No payment shall be made in violation of chapter 13 of this title.

  (c) A corporation may pay compensation in a reasonable amount to its members, directors, or officers for services rendered, may confer benefits upon its members in conformity with its purposes, and upon dissolution or final liquidation may make distributions to its members as permitted by this chapter, and no such payment, benefit, or distribution shall be deemed to be a dividend or distribution of income or profit. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• Subchapter 004: Derivative Suits

• § 6.40. Derivative suits

  (a) A proceeding may be brought in the right of a domestic or foreign corporation to procure a judgment in its favor by:

  (1) any member or members having five percent or more of the voting power or by 50 members, whichever is less; or

  (2) any director.

  (b) In any such proceeding, each complainant shall be a member or director at the time of bringing the proceeding.

  (c) A complaint in a proceeding brought in the right of a corporation must be verified and allege with particularity the demand made, if any, to obtain action by the directors and either why the complainants could not obtain the action or why they did not make the demand. If a demand for action was made and the corporation’s investigation of the demand is in progress when the proceeding is filed, the court may stay the suit until the investigation is completed.

  (d) On termination of the proceeding the court may require the complainants to pay any defendant’s reasonable expenses (including counsel fees) incurred in defending the suit if it finds that the proceeding was commenced frivolously or in bad faith.

  (e) If the proceeding on behalf of the corporation results in the corporation taking some action requested by the complainants or otherwise was successful, in whole or in part, or if anything was received by the complainants as the result of a judgment, compromise, or settlement of an action or claim, the court may award the complainants reasonable expenses (including counsel fees).

  (f) The complainants shall notify the Attorney General within ten days after commencing any proceeding under this section if the proceeding involves a public benefit corporation or assets held in charitable trust by a mutual benefit corporation. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

• Subchapter 005: Delegates

• § 6.50. Delegates

  (a) A corporation may provide in its articles or bylaws for delegates having some or all of the authority of members.

  (b) The articles or bylaws may set forth provisions relating to:

  (1) the characteristics, qualifications, rights, limitations, and obligations of delegates, including their selection and removal;

  (2) calling, noticing, holding, and conducting meetings of delegates; and

  (3) carrying on corporate activities during and between meetings of delegates. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)