State of the Nonprofit Regulatory Environment in VERMONT

1 Bifurcation of charitable regulatory body

Bifurcated Regulatory Structure

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

VT Code § 2473

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Charitable org not required to register, only paid solicitors to file notice of solicitation with AG; 9 V.S.A. § 2473

Registration Office

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

BIFURCD-REGIOF-NS

REGULATORY BODY: Not Specific

NOTES: Vermont Office of the Attorney General: http://ago.vermont.gov/paid-fundraisers/

2 Notice, Filing or Review of Transactions

Sale of Assets

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 12.02

REGULATORY BODY: Attorney General

STATUTE TEXT: ss 12.02. Sale of assets other than in regular course of activities (a) A corporation may sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property (with or without the good will), other than in the usual and regular course of its activities on the terms and conditions and for the consideration determined by the corporation’s board, if the proposed transaction is authorized by subsection (b) of this section. (b) Unless this title, the articles, bylaws, or the board of directors or members (acting pursuant to subsection (d) of this section) require a greater vote or voting by class, the proposed transaction to be authorized must be approved: (1) by the board; (2) by the members by two-thirds of the votes cast or a majority of the voting power, whichever is less; and (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. (c) If the corporation does not have members, the transaction 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 the sale, lease, exchange, or other disposition of all, or substantially all, of the property or assets of the corporation and contain or be accompanied by a copy or summary of a description of the transaction. (d) The board may condition its submission of the proposed transaction, and the members may condition their approval of the transaction, on receipt of a higher percentage of affirmative votes or on any other basis. (e) If the corporation seeks to have the transaction 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 the sale, lease, exchange, or other disposition of all, or substantially all, of the property or assets of the corporation and contain or be accompanied by a copy or summary of a description of the transaction. (f) If the board needs to have the transaction 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 a description of the transaction. (g) A public benefit corporation must give written notice to the Attorney General 20 days before it sells, leases, exchanges, or otherwise disposes of all, or substantially all, of its property if the transaction is not in the usual and regular course of its activities unless the Attorney General has given the corporation a written waiver of this subsection. (h) After a sale, lease, exchange, or other disposition of property is authorized, the transaction may be abandoned (subject to any contractual rights) without further action by the members or any other person who approved the transaction in accordance with the procedures set forth in the resolution proposing the transaction or, if none is set forth, in the manner determined by the board of directors. (Added 1995, No. 179 (Adj. Sess.), ss 1, eff. Jan. 1, 1997.)

NOTES: 11B V.S.A. § 12.02

REPORTS-ASSETS-OT

REGULATORY BODY: Other

NOTES: No

Mergers

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 11.02

REGULATORY BODY: Attorney General

STATUTE TEXT: ss 11.02. Limitations on mergers by public benefit corporations (a) Without the prior approval of the Superior Court of Washington County in a proceeding of which the Attorney General has been given written notice, a public benefit corporation may merge only with: (1) another public benefit corporation; (2) a foreign corporation which would qualify under this title as a public benefit corporation; (3) a wholly owned foreign or domestic business corporation, provided the public benefit corporation is the surviving corporation and continues to be a public benefit corporation after the merger; or (4) a business corporation, provided that: (A) on or prior to the effective date of the merger, assets with a value equal to the greater of the fair market value of the net tangible and intangible assets (including goodwill) of the public benefit corporation or the fair market value of the public benefit corporation if it were to be operated as a business concern are transferred or conveyed to one or more persons who would have received its assets under subdivisions 14.05(a)(5) and (6) of this title had it dissolved; (B) it shall return, transfer, or convey any assets held by it upon condition requiring return, transfer, or conveyance, which condition occurs by reason of the merger, in accordance with such condition; and (C) the merger is approved by a majority of directors of the public benefit corporation who are not and will not become shareholders in or officers, employees, agents, or consultants of the business corporation. (b) At least 20 days before consummation of any merger of a public benefit corporation, notice, including a copy of the proposed plan of merger, must be delivered to the Attorney General. (c) Without the prior written consent of the Attorney General or of the Superior Court of Washington County in a proceeding in which the Attorney General has been given notice, when a public benefit corporation merges each member of a public benefit corporation may only receive or keep a membership or memberships in the surviving public benefit corporation, if any. (Added 1995, No. 179 (Adj. Sess.), ss 1, eff. Jan. 1, 1997.)

NOTES: Pub. Benefit Corp 11 B V.S.A. § 11.02

VT Code § 11.04

REGULATORY BODY: Other

STATUTE TEXT: ss 11.04. Articles of merger After a plan of merger is approved by the board of directors, and if required by section 11.03 of this title, by the members and any other persons, the surviving or acquiring corporation shall deliver to the Secretary of State articles of merger setting forth: (1) the plan of merger; (2) if approval of members was not required, a statement to that effect and a statement that the plan was approved by a sufficient vote of the board of directors; (3) 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 the plan, and number of votes of each class indisputably voting on the plan; and (B) either the total number of votes cast for and against the plan by each class entitled to vote separately on the plan or the total number of undisputed votes cast for the plan by each class and a statement that the number cast for the plan by each class was sufficient for approval by that class; (4) if approval of the plan by some person or persons other than the members or the board is required pursuant to subdivision 11.03(a)(3) of this title, a statement that the approval was obtained. (Added 1995, No. 179 (Adj. Sess.), ss 1, eff. Jan. 1, 1997.)

NOTES: File with Sec. of State 11B V.S.A. § 11.04

Certificate of Amendments

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

REPORTS-AMMEND-AG

REGULATORY BODY: Attorney General

NOTES: No

VT Code § 10.05

REGULATORY BODY: Other

STATUTE TEXT: ss 10.05. Articles of amendment A corporation amending its articles shall deliver to the Secretary of State articles of amendment setting forth: (1) the name of the corporation; (2) the text of each amendment adopted; (3) the date of each amendment’s adoption; (4) if approval of members was not required, a statement to that effect and a statement that the amendment 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 the amendment, and number of votes of each class indisputably voting on the amendment; and (B) either the total number of votes cast for and against the amendment by each class entitled to vote separately on the amendment or the total number of undisputed votes cast for the amendment by each class and a statement that the number cast for the amendment by each class was sufficient for approval by that class; (6) if approval of the amendment by some person or persons other than the members, the board, or the incorporators is required, pursuant to section 10.30 of this title, a statement that the approval was obtained. (Added 1995, No. 179 (Adj. Sess.), ss 1, eff. Jan. 1, 1997.)

NOTES: 11B V.S.A. § 10.05

Does the state require annual financial reporting by charitable organizations in addition to filing a copy of the 990 with the regulator (if filing 990 is required)?

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

REPORTS-FINANC-NS

REGULATORY BODY: Not Specific

3 Notice or Action for Dissolutions

Voluntary Dissolutions

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

DISSOLV-VOLUNT-AG

REGULATORY BODY: Attorney General

NOTES: No

VT Code § 14.03

REGULATORY BODY: Other

STATUTE TEXT: ss 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.), ss 1, eff. Jan. 1, 1997.)

NOTES: Sec. of State 11B V.S.A. § 14.03

Judicial Dissolutions

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 14.3

REGULATORY BODY: Attorney General

STATUTE TEXT: ss 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.), ss 1, eff. Jan. 1, 1997.)

NOTES: 11B V.S.A. § 14.30

VT Code § 14.33

REGULATORY BODY: Other

STATUTE TEXT: ss 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.), ss 1, eff. Jan. 1, 1997.)

NOTES: 11B V.S.A. § 14.33

Administrative Dissolutions

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 14.21

REGULATORY BODY: Attorney General

STATUTE TEXT: ss 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 involuntarily dissolution of a corporation does not terminate the authority of its registered agent. (Added 1995, No. 179 (Adj. Sess.), ss 1, eff. Jan. 1, 1997.)

NOTES: 11B V.S.A. § 14.21

VT Code § 14.2

REGULATORY BODY: Other

STATUTE TEXT: ss 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 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 or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued. (Added 1995, No. 179 (Adj. Sess.), ss 1, eff. Jan. 1, 1997.)

NOTES: 11B V.S.A. § 14.20

4 Notice, Oversight or Filing of Hospital Conversions

Has Statute

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 9420

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Vt. Stat. Ann. tit. 18, § 9420

Requires Notice or Oversight

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 9420

REGULATORY BODY: Attorney General

STATUTE TEXT:

NOTES: Vt. Stat. Ann. tit. 18, § 9420

VT Code § 9420

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Vt. Stat. Ann. tit. 18, § 9420

Requires Filing

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 9420

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Vt. Stat. Ann. tit. 18, § 9420

5 Audits

Requires Audit

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

AUDITFI-AUDITS-NS

REGULATORY BODY: Not Specific

NOTES: No

Audit Threshold

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

AUDITFI-THRESH-NS

REGULATORY BODY: Not Specific

6 Registration Law

Registration Law

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

REGILAW-REGIST-NS

REGULATORY BODY: Not Specific

NOTES: NONE

7 Exemptions from Registering for Specific Organization Types

Religious Organizations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-RELIGI-NS

REGULATORY BODY: Not Specific

Small organizations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-SMALLO-NS

REGULATORY BODY: Not Specific

Educational Institutions

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-EDUCAT-NS

REGULATORY BODY: Not Specific

Governmental Organizations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-GOVMNT-NS

REGULATORY BODY: Not Specific

Hospitals

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-HOSPIT-NS

REGULATORY BODY: Not Specific

Veterans organizations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-VETERA-NS

REGULATORY BODY: Not Specific

Foundations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-FNDYES-NS

REGULATORY BODY: Not Specific

Foundations that don’t solicit contributions

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-FNDNOS-NS

REGULATORY BODY: Not Specific

Charitable Trusts

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-CTRUST-NS

REGULATORY BODY: Not Specific

Parent-Teacher Organizations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-PTOEDU-NS

REGULATORY BODY: Not Specific

Reports to congress

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-CONGRE-NS

REGULATORY BODY: Not Specific

Non-soliciting

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-NONSOL-NS

REGULATORY BODY: Not Specific

Fraternal/ Membership

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-MEMFRA-NS

REGULATORY BODY: Not Specific

Political Orgs

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-POLITI-NS

REGULATORY BODY: Not Specific

Other

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-OTHTYP-NS

REGULATORY BODY: Not Specific

8 Defined remedies

Dissolution

Regulatory Action: REMEDY

YES: A regulation is defined in the state

VT Code § 14.3

REGULATORY BODY: Not Specific

NOTES: 11B V.S.A. § 14.30

Removal of Board Members

Regulatory Action: REMEDY

YES: A regulation is defined in the state

VT Code § 8.1

REGULATORY BODY: Not Specific

STATUTE TEXT: ss 8.10. Removal of directors by judicial proceeding (a)(1) The Superior Court may remove any director of the corporation from office in a proceeding commenced either by the corporation, its members holding at least 10 percent of the voting power of any class, or the Attorney General in the case of a public benefit corporation if the court finds that: (A) the director engaged in fraudulent or dishonest conduct, or gross abuse of authority or discretion, with respect to the corporation, that the provisions of section 8.13 of this title have been violated, or a final judgment has been entered finding that the director has violated a duty set forth in sections 8.30 through 8.33 of this title; and (B) removal is in the best interest of the corporation. (2) The petition for removal shall be filed: (A) in the county where the corporation’s principal office is located; (B) in the county where the corporation’s registered office is located if the corporation has no principal office in this State; or (C) in the Superior Court of Washington County where the corporation has no principal office or registered office in this State. (b) The court that removes a director may bar the director from serving on the board for a period prescribed by the court. (c) If members or the Attorney General commence a proceeding under subsection (a) of this section, the corporation shall be made a party defendant. (d) If a public benefit corporation or its members commence a proceeding under subsection (a) of this section, they shall give the Attorney General written notice of the proceeding. (Added 1995, No. 179 (Adj. Sess.), ss 1, eff. Jan. 1, 1997.)

NOTES: Vt. Stat. Ann. tit. 11B, § 8.10

9 Oversight of professional fundraisers

Does the state require registration by commercial fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 2473

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Paid fundraisers must file a “notice of solicitation” with the attorney general’s office 10 days prior to solicitation Vt. Stat. Ann. tit. 9, § 2473

Does the state require registration by fundraising counsel?

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

FNDRAZE-COUNSL-NS

REGULATORY BODY: Not Specific

Does the state oversee commercial-coventuring (e.g. by requiring that the co-venture be registered or by requiring that the charitable organization files the co-venture contract)?

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

FNDRAZE-VENTUR-NS

REGULATORY BODY: Not Specific

Does the state require the fundraisers to provide notice to the regulator before any solicitation campaign (in addition to annual registration and/or filing the contract)?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 2473

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Vt. Stat. Ann. tit. 9, § 2473: paid fundraiser must file notice of solicitation

Does the state require specified disclosures to donors?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 2475

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Vt. Stat. Ann. tit. 9, § 2475

Does the state require a copy of any contract between a charitable organization and a commercial fundraiser or fundraising counsel be filed with the regulator?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 2473

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Vt. Stat. Ann. tit. 9, § 2473

Does the state require annual financial reporting by commercial fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 2477

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Must submit financial report within 90 days of end of solicitation or 90 days after the anniversary of start of campaign. Vt. Stat. Ann. tit. 9, § 2477

Does the state require bonding of professional fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

VT Code § 2473

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: The notice of solicitation shall be accompanied by a bond approved by the attorney general in the amount of $20,000. A separate notice of solicitation shall be required to be filed for each separate solicitation campaign. However, only one bond shall be required to be in effect at the same time for any fundraiser, regardless of the number of notices of solicitation filed. Vt. Stat. Ann. tit. 9, § 2473