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Subchapter 001: VOLUNTARY DISSOLUTION
§ 14.01. Dissolution by incorporators or directors
(a) A majority of the incorporators or directors of a corporation that has no members
may, subject to any approval required by the articles or bylaws, dissolve the corporation
by delivering to the Secretary of State articles of dissolution.
(b) The corporation shall give notice of any meeting at which dissolution will be approved.
The notice shall be in accordance with subsection 8.22(c) of this title. The notice must also state that the purpose, or one of the purposes, of the meeting
is to consider dissolution of the corporation.
(c) The incorporators or directors in approving dissolution shall adopt a plan of dissolution
indicating to whom the assets owned or held by the corporation will be distributed
after all creditors have been paid. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)
§ 14.02. Dissolution by directors, members
(a) Unless this title, the articles, bylaws, or the board of directors or members (acting
pursuant to subsection (c) of this section) require a greater vote or voting by class
dissolution is authorized if it is approved:
(1) by the board;
(2) by the members, if any, by two-thirds of the votes cast or a majority of the voting
power, whichever is less; or
(3) in writing by any person or persons whose approval is required by a provision of the
articles authorized by section 10.30 of this title for an amendment to the articles or bylaws.
(b) If the corporation does not have members, dissolution must be approved by a vote of
a majority of the directors in office at the time the transaction is approved. In
addition, the corporation shall provide notice of any directors’ meeting at which
such approval is to be obtained in accordance with subsection 8.22(c) of this title. The notice must also state that the purpose, or one of the purposes, of the meeting
is to consider dissolution of the corporation and contain or be accompanied by a copy
or summary of the plan of dissolution.
(c) The board may condition its submission of the proposed dissolution, and the members
may condition their approval of the dissolution on receipt of a higher percentage
of affirmative votes or on any other basis.
(d) If the board seeks to have dissolution approved by the members at a membership meeting,
the corporation shall give notice to its members of the proposed membership meeting
in accordance with section 7.05 of this title. The notice must also state that the purpose, or one of the purposes, of the meeting
is to consider dissolving the corporation and contain or be accompanied by a copy
or summary of the plan of dissolution.
(e) If the board seeks to have dissolution approved by the members by written consent
or written ballot, the material soliciting the approval shall contain or be accompanied
by a copy or summary of the plan of dissolution.
(f) The plan of dissolution shall indicate to whom the assets owned or held by the corporation
will be distributed after all creditors have been paid. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)
§ 14.03. Articles of dissolution
(a) At any time after dissolution is authorized, the corporation may dissolve by delivering
to the Secretary of State articles of dissolution setting forth:
(1) the name of the corporation;
(2) the date dissolution was authorized;
(3) a statement that dissolution was approved by a sufficient vote of the board;
(4) if approval of members was not required, a statement to that effect and a statement
that dissolution was approved by a sufficient vote of the board of directors or incorporators;
(5) if approval by members was required:
(A) the designation, number of memberships outstanding, number of votes entitled to be
cast by each class entitled to vote separately on dissolution, and number of votes
of each class indisputably voting on dissolution; and
(B) either the total number of votes cast for and against dissolution by each class entitled
to vote separately on dissolution or the total number of undisputed votes cast for
dissolution by each class and a statement that the number cast for dissolution by
each class was sufficient for approval by that class;
(6) if approval of dissolution by some person or persons other than the members, the board
or the incorporators is required pursuant to subdivision 14.02(a)(3) of this title, a statement that the approval was obtained.
(b) A corporation is dissolved upon the effective date of its articles of dissolution. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)
§ 14.04. Revocation of dissolution
(a) A corporation may revoke its dissolution within 120 days of its effective date.
(b) Revocation of dissolution must be authorized in the same manner as the dissolution
was authorized unless that authorization permitted revocation by action of the board
of directors alone, in which event the board of directors may revoke the dissolution
without action by the members or any other person.
(c) After the revocation of dissolution is authorized, the corporation may revoke the
dissolution by delivering to the Secretary of State for filing articles of revocation
of dissolution, together with a copy of its articles of dissolution, that set forth:
(1) the name of the corporation;
(2) the effective date of the dissolution that was revoked;
(3) the date that the revocation of dissolution was authorized;
(4) if the corporation’s board of directors (or incorporators) revoked the dissolution,
a statement to that effect;
(5) if the corporation’s board of directors revoked a dissolution authorized by the members
alone or in conjunction with another person or persons, a statement that revocation
was permitted by action by the board of directors alone pursuant to that authorization;
and
(6) if member or third person action was required to revoke the dissolution, the information
required by subdivision 14.03(a)(5) or (6) of this title.
(d) Revocation of dissolution is effective upon the effective date of the articles of
revocation of dissolution.
(e) When the revocation of dissolution is effective, it relates back to and takes effect
as of the effective date of the dissolution and the corporation resumes carrying on
its activities as if dissolution had never occurred. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)
§ 14.05. Effect of dissolution
(a) A dissolved corporation continues its corporate existence but may not carry on any
activities except those appropriate to wind up and liquidate its affairs, including:
(1) preserving and protecting its assets and minimizing its liabilities;
(2) discharging or making provision for discharging its liabilities and obligations;
(3) disposing of its properties that will not be distributed in kind;
(4) returning, transferring, or conveying assets held by the corporation upon a condition
requiring return, transfer, or conveyance, which condition occurs by reason of the
dissolution, in accordance with such condition;
(5) transferring, subject to any contractual or legal requirements, its assets as provided
in or authorized by its articles of incorporation or bylaws;
(6) if the corporation is a public benefit corporation, and no provision has been made
in its articles or bylaws for distribution of assets on dissolution, transferring,
subject to any contractual or legal requirement, its assets:
(A) to one or more persons recognized as exempt under section 501(c)(3) of the Internal Revenue Code; or
(B) if the dissolved corporation is not recognized as exempt under section 501(c)(3) of the Internal Revenue Code, to one or more public benefit corporations;
(7) if the corporation is a mutual benefit corporation and no provision has been made
in its articles or bylaws for distribution of assets on dissolution, transferring
its assets to its members or, if it has no members those persons whom the corporation
holds itself out as benefiting or serving; and
(8) doing every other act necessary to wind up and liquidate its assets and affairs.
(b) Dissolution of a corporation does not:
(1) transfer title to the corporation’s property;
(2) subject its directors or officers to standards of conduct different from those prescribed
in chapter 8 of this title;
(3) change quorum or voting requirements for its board or members; change provisions for
selection, resignation, or removal of its directors or officers or both; or change
provisions for amending its bylaws;
(4) prevent commencement of a proceeding by or against the corporation in its corporate
name;
(5) abate or suspend a proceeding pending by or against the corporation on the effective
date of dissolution; or
(6) terminate the authority of the registered agent for service of process. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2025, No. 10, § 19, eff. July 1, 2025.)
§ 14.06. Known claims against dissolved corporation
(a) A dissolved corporation may dispose of the known claims against it by following the
procedure described in this section.
(b) The dissolved corporation shall notify its known claimants in writing of the dissolution
at any time after its effective date. The written notice must:
(1) describe information that must be included in a claim;
(2) provide a mailing address where a claim may be sent;
(3) state the deadline, which may not be fewer than 120 days from the effective date of
the written notice, by which the dissolved corporation must receive the claim; and
(4) state that the claim will be barred if not received by the deadline.
(c) A claim against the dissolved corporation is barred:
(1) if a claimant who was given written notice under subsection (b) of this section does
not deliver the claim to the dissolved corporation by the deadline;
(2) if a claimant whose claim was rejected by the dissolved corporation does not commence
a proceeding to enforce the claim within 90 days from the effective date of the rejection
notice.
(d) For purposes of this section, “claim” does not include a contingent liability or a
claim based on an event occurring after the effective date of dissolution. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)
§ 14.07. Unknown claims against dissolved corporation
(a) A dissolved corporation may also publish notice of its dissolution and request that
persons with claims against the corporation present them in accordance with the notice.
(b) The notice must:
(1) be published one time in a newspaper of general circulation in the county where the
dissolved corporation’s principal office (or, if none in this State, its registered
office) is or was last located;
(2) describe the information that must be included in a claim and provide a mailing address
where the claim may be sent; and
(3) state that a claim against the corporation will be barred unless a proceeding to enforce
the claim is commenced within five years after publication of the notice.
(c) If the dissolved corporation publishes a newspaper notice in accordance with subsection
(b) of this section, the claim of each of the following claimants is barred unless
the claimant commences a proceeding to enforce the claim against the dissolved corporation
within five years after the publication date of the newspaper notice:
(1) a claimant who did not receive written notice under section 14.06 of this title;
(2) a claimant whose claim was timely sent to the dissolved corporation but not acted
on; and
(3) a claimant whose claim is contingent or based on an event occurring after the effective
date of dissolution.
(d) A claim may be enforced under this section:
(1) against the dissolved corporation, to the extent of its undistributed assets; or
(2) if the assets have been distributed in liquidation, against any person, other than
a creditor of the corporation, to whom the corporation distributed its property to
the extent of the distributee’s pro rata share of the claim or the corporate assets
distributed to such person in liquidation, whichever is less, but the distributee’s
total liability for all claims under this section may not exceed the total amount
of assets distributed to the distributee.
(e) The provisions of this section shall not apply to claimants whose claim is commenced
in a timely manner pursuant to 12 V.S.A. § 512, 518, 521, 522, 551, or 560. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)
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Subchapter 002: INVOLUNTARY TERMINATION
§ 14.20. Involuntary termination
The Secretary of State may commence a proceeding under section 14.21 of this title to administratively dissolve a corporation if:
(1) the corporation does not pay within 60 days after they are due fees imposed by this
title;
(2) the corporation does not deliver its biennial report to the Secretary of State within
60 days after it is due;
(3) the corporation is without a registered agent for service of process or registered
office in this State for 60 days or more; or
(4) the corporation does not notify the Secretary of State within 120 days that its registered
agent for service of process or registered office has been changed, that its registered
agent for service of process has resigned, or that its registered office has been
discontinued. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2025, No. 10, § 19, eff. July 1, 2025.)
§ 14.21. Procedure for and effect of involuntary termination
(a) Upon determining that one or more grounds exist under section 14.20 of this title for dissolving a corporation, the Secretary of State shall serve the corporation
with written notice of that determination under section 5.04 of this title.
(b) If the corporation does not correct each ground for dissolution or demonstrate to
the reasonable satisfaction of the Secretary of State that each ground determined
by the Secretary of State does not exist within at least 60 days after service of
the notice is perfected under section 5.04 of this title, the Secretary of State may administratively dissolve the corporation by signing
a certificate of dissolution that recites the ground or grounds for dissolution and
its effective date. The Secretary of State shall file the original of the certificate
and serve a copy on the corporation under section 5.04 of this title, and in the case of a public benefit corporation shall notify the Attorney General
in writing.
(c) A corporation involuntarily dissolved continues its corporate existence but may not
carry on any activities except those necessary to wind up and liquidate its affairs
under section 14.05 of this title and notify its claimants under sections 14.06 and 14.07 of this title.
(d) The involuntary dissolution of a corporation does not terminate the authority of its
registered agent for service of process. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2025, No. 10, § 19, eff. July 1, 2025.)
§ 14.22. Reinstatement following involuntary dissolution
(a) A corporation involuntarily dissolved that has not distributed its assets under section 14.21 of this title may apply to the Secretary of State for reinstatement upon payment of $25.00 for
each year the corporation is delinquent. The application must:
(1) recite the name of the corporation and the effective date of its involuntary dissolution;
(2) state that the ground or grounds for dissolution either did not exist or have been
eliminated; and
(3) state that the corporation’s name satisfies the requirements of section 4.01 of this title.
(b) If the Secretary of State determines that the application contains the information
required by subsection (a) of this section and that the information is correct, the
Secretary of State shall cancel the certificate of dissolution and prepare a certificate
of reinstatement reciting that determination and the effective date of reinstatement,
file the original of the certificate, and serve a copy on the corporation under section 5.04 of this title.
(c) When reinstatement is effective, it relates back to and takes effect as of the effective
date of the administrative dissolution and the corporation shall resume carrying on
its activities as if the administrative dissolution had never occurred. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2025, No. 10, § 19, eff. July 1, 2025.)
§ 14.23. Appeal from denial of reinstatement
(a) The Secretary of State, upon denying a corporation’s application for reinstatement
following involuntary dissolution, shall serve the corporation under section 5.04 of this title with a written notice that explains the reason or reasons for denial.
(b) The corporation may appeal the denial of reinstatement to the Superior Court of Washington
County within 90 days after service of the notice of denial is perfected. The corporation
appeals by petitioning the court to set aside the dissolution and attaching to the
petition copies of the Secretary of State’s certificate of dissolution, the corporation’s
application for reinstatement, and the Secretary of State’s notice of denial.
(c) The court may summarily order the Secretary of State to reinstate the dissolved corporation
or may take other action the court considers appropriate.
(d) The court’s final decision may be appealed as in other civil proceedings. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)
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Subchapter 003: JUDICIAL DISSOLUTION
§ 14.30. Grounds for judicial dissolution
(a) The Superior Court may dissolve a corporation:
(1) in a proceeding by the Attorney General if it is established that:
(A) the corporation obtained its articles of incorporation through fraud;
(B) the corporation has continued to exceed or abuse the authority conferred upon it by
law;
(C) the corporation is a public benefit corporation and the corporate assets are being
misapplied or wasted; or
(D) the corporation is a public benefit corporation and is no longer able to carry out
its purposes;
(2) in a proceeding by 50 members or members holding five percent of the voting power,
whichever is less, or by a director or any person specified in the articles, if it
is established that:
(A) the directors are deadlocked in the management of the corporate affairs, and the members,
if any, are unable to breach the deadlock;
(B) the directors or those in control of the corporation have acted, are acting or will
act in a manner that is illegal, oppressive, or fraudulent;
(C) the members are deadlocked in voting power and have failed, for a period that includes
at least two consecutive annual meeting dates, to elect successors to directors whose
terms have, or would otherwise have, expired;
(D) the corporate assets are being misapplied or wasted; or
(E) the corporation is a public benefit corporation and is no longer able to carry out
its purposes;
(3) in a proceeding by a creditor if it is established that:
(A) the creditor’s claim has been reduced to judgment, the execution on the judgment returned
unsatisfied and the corporation is insolvent; or
(B) the corporation has admitted in writing that the creditor’s claim is due and owing
and the corporation is insolvent; or
(4) in a proceeding by the corporation to have its voluntary dissolution continued under
court supervision.
(b) Prior to dissolving a corporation, the court shall consider whether:
(1) there are reasonable alternatives to dissolution;
(2) dissolution is in the public interest, if the corporation is a public benefit corporation;
(3) dissolution is the best way of protecting the interests of members, if the corporation
is a mutual benefit corporation. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)
§ 14.31. Procedure for judicial dissolution
(a) Venue for a proceeding by the Attorney General to dissolve a corporation lies in the
Superior Court of Washington County. Venue for a proceeding brought by any other party
named in section 14.30 of this title lies in the county where a corporation’s principal office (or, if none in this State,
its registered office) is or was last located.
(b) It is not necessary to make directors or members parties to a proceeding to dissolve
a corporation unless relief is sought against them individually.
(c) A court in a proceeding brought to dissolve a corporation may issue injunctions, appoint
a receiver or custodian pendente lite with all powers and duties the court directs,
take other action required to preserve the corporate assets wherever located, and
carry on the activities of the corporation until a full hearing can be held.
(d) A person other than the Attorney General who brings an involuntary dissolution proceeding
for a public benefit corporation shall forthwith give written notice of the proceeding
to the Attorney General who may intervene. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)
§ 14.32. Receivership or custodianship
(a) A court in a judicial proceeding brought to dissolve a corporation may appoint one
or more receivers to wind up and liquidate, or one or more custodians to manage, the
affairs of the corporation. The court shall hold a hearing, after notifying all parties
to the proceeding and any interested persons designated by the court, before appointing
a receiver or custodian. The court appointing a receiver or custodian has exclusive
jurisdiction over the corporation and all of its property wherever located.
(b) The court may appoint an individual, or a domestic or foreign business or nonprofit
corporation (authorized to transact business in this state) as a receiver or custodian.
The court may require the receiver or custodian to post bond, with or without sureties,
in an amount the court directs.
(c) The court shall describe the powers and duties of the receiver or custodian in its
appointing order, which may be amended from time to time. Among other powers:
(1) the receiver:
(A) may dispose of all or any part of the assets of the corporation wherever located,
at a public or private sale, if authorized by the court; provided, however, that the
receiver’s power to dispose of the assets of the corporation is subject to any trust
and other restrictions that would be applicable to the corporation; and
(B) may sue and defend in the receiver’s or custodian’s name as receiver or custodian
of the corporation in all courts of this State;
(2) the custodian may exercise all of the powers of the corporation, through or in place
of its board of directors or officers, to the extent necessary to manage the affairs
of the corporation in the best interests of its members and creditors.
(d) The court during a receivership may redesignate the receiver a custodian, and during
a custodianship may redesignate the custodian a receiver, if doing so is in the best
interests of the corporation, its members, and creditors.
(e) The court from time to time during the receivership or custodianship may order compensation
paid and expense disbursements or reimbursements made to the receiver or custodian
and the receiver’s or custodian’s counsel from the assets of the corporation or proceeds
from the sale of the assets. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)
§ 14.33. Decree of dissolution
(a) If after a hearing the court determines that one or more grounds for judicial dissolution
described in section 14.30 of this title exist, it may enter a decree dissolving the corporation and specifying the effective
date of the dissolution, and the clerk of the court shall deliver a certified copy
of the decree to the Secretary of State, who shall file it.
(b) After entering the decree of dissolution, the court shall direct the winding up and
liquidation of the corporation’s affairs in accordance with section 14.05 of this title and the notification of its claimants in accordance with sections 14.06 and 14.07 of this title. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)