The Vermont Statutes Online
The Statutes below include the actions of the 2025 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
(Cite as: 11A V.S.A. § 20.14)
-
§ 20.14. Involuntary termination of close corporation status; proceeding to prevent loss of
status
(a) A close corporation shall notify all shareholders of any event which would render
the corporation no longer eligible to organize as a close corporation under the requirements
of section 20.02 of this title. Such notification shall be made within 30 days of the discovery of the event. If
shareholders are not notified within one year of the discovery of the event, the corporation’s
status as a close corporation shall terminate. If shareholders are notified within
30 days, they shall have 120 days after discovery of the event to remedy any breach,
and if remedied, the corporation’s status as a close corporation shall be unaffected
by the breach of any conditions under section 20.02. Commencement of a proceeding
by a shareholder or by the corporation in Superior Court under subsection (b) of this
section shall suspend the provisions of this subsection.
(b) The Superior Court of the county in which the registered office of the corporation
is located, upon the suit of the corporation or any shareholder thereof, shall have
jurisdiction to issue all orders necessary to prevent the corporation from losing
its status as a close corporation, or to restore its status as a close corporation
by enjoining or setting aside any act or threatened act on the part of the corporation
or a shareholder thereof which would be inconsistent with any of the provisions or
conditions required by section 20.02 of this title to be stated in the articles of incorporation of a close corporation, unless it is
an action approved in accordance with section 20.02 of this title. The superior court shall enjoin or set aside any transfer or threatened transfer
of shares of a close corporation which is contrary to the terms of its articles of
incorporation or of any transfer restriction permitted by subdivision 20.02(5)(A)
and subsection 20.05(b) of this title.
(c) A close corporation whose status has been terminated under this section may reinstate
that status by correction of breach. Such reinstatement shall revive and validate
all actions taken by a close corporation during its termination period, if such actions
would otherwise have been legally binding on the corporation if it had never been
terminated. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)