An out-of-state ("foreign") corporation must procure a certificate of authority from our office in order to do business legally in Vermont.
The law defines "doing business" as "each act, power or privilege exercised or enjoyed" in Vermont by a foreign corporation. 11A V.S.A. 15.01(b).
This very broad definition is tempered by enumeration of a dozen types of activities that, considered alone, do not constitute "doing business" and therefore do not incur an obligation to file.
For example, selling your products through an independent contractor, merely owning real property in Vermont, or conducting an isolated transaction that is not one transaction in the course of repeated transactions of a like nature will not be considered doing business in Vermont.
If, however, your activities are not so limited, you will need to obtain a certificate of authority.
The process is not complex, and failure to register could mean more trouble than it is worth. Vermont law prohibits a foreign corporation from maintaining an action, raising a counterclaim, crossclaim or affirmative defense in any court in Vermont until the corporation obtains a certificate of authority.
There also are civil penalties for transacting business without a certificate of authority.
As with the domestic variety, foreign corporations intending to do a business regulated by a particular state agency, such as the Department of Banking, Insurance, and Securities or the Public Service Board, should contact the appropriate agency before they apply to our office.
Without having to obtain a certificate of authority, a foreign corporation may register its name with our office, as long as its name is distinguishable on the record from a previously registered corporate or business name and is not deceptively similar to or likely to be confused with any such previously authorized name.
Please note, however, that a foreign corporation may apply for and register the already-registered name of another corporation if it gains the written consent of the other corporation to use the name and the other corporation changes its name.
Name registration does not constitute doing business, nor does it satisfy the need to obtain a certificate of authority in Vermont. The purpose of registering your corporate name is to prevent the use or release of your name to another corporation or business in this state. The registration must be renewed annually.
The process of registering to do business in Vermont begins with the filing of an application for a certificate of authority. The application must contain (1) the corporation's name, (2) the state or country of incorporation, (3) the date of incorporation, (4) the period of duration (perpetual or a fixed period), (5) the street address of the principal office, (6) the address of the registered office, (7) the name of the registered agent at that office, and (8) the names and addresses of the current directors and officers.
A certificate of good standing, duly authenticated by the proper officer of the original jurisdiction, also is required.
These documents must be filed with our office, along with the filing fee.
To ensure that the certificate of good standing is current, we require that the certificate be dated no earlier than 30 days prior to the filing of the application.
Before we issue a certificate of authority to transact business, the foreign corporation's name is checked to ensure that it is distinguishable on the record from the name of any reserved or registered corporation or business entity and that it is not deceptively similar to nor likely to be confused with any such previously authorized name.
If your name does not meet the standards for registration or is not available, you may file a resolution adopted by your board of directors to use an available trade name to transact business in Vermont.
Registered Offices, Agents
The requirement for maintaining a registered office and a registered agent is a serious one. Failure to maintain a current office (which may be the same as the corporation's place of business in Vermont) or to maintain a current registered agent, could subject a foreign corporation to termination or other penalties.
The registered agent may be an individual who resides in Vermont, or a domestic or foreign corporation, profit or not-for-profit, authorized to transact business in Vermont. The corporation itself, cannot act as its own agent.
The agent must have a business office identical with the foreign corporation's registered office. The corporation must promptly notify us, by filing a statement of change, whenever it changes its registered office of agent.
Foreign corporations may continue to be organized according to the laws of their original jurisdictions.
For that reason, the Vermont law relating to foreign corporations is more circumspect than the law relating to domestic corporations.
However, when a foreign corporation changes its name, the period of its duration, or the state or country of its incorporation, it must amend its certificate of authority.
The process for amendment is identical to the process of initial application to do business in Vermont, including submittal of a current certificate of good standing from the home jurisdiction.
Each foreign corporation authorized to do business in Vermont must file an annual report with our office within two and a half months after the close of the corporate fiscal year, along with a fee.
Failure to file this form will result in the termination of your Certificate of Authority, so it is an all-important requirement. Notice will be mailed to your registered agent when the report is due. If you include a self-addressed stamped envelope and a duplicate copy of your report we will return your endorsed copy to you.
If you fail to file your report within this period, we will notify you that the corporation's authority has been involuntarily terminated; its ability to transact business lawfully in Vermont will cease on the date shown on the termination notice.
You will have to file for reinstatement before you can resume doing business in Vermont as a foreign corporation.
Reinstatement involves filing the delinquent annual report plus normal and penalty filing fees.
After five years' delinquency, the corporate name becomes available to any qualified business entity that wants to use it.
Once the corporation's authority is reinstated, however, the reinstatement relates back to and takes effect as of the effective date of the involuntary termination.
Under Vermont law, foreign corporations do not dissolve; they withdraw.
There is a form to file for withdrawal.
Special Trustee Privileges
Foreign banking and trust companies that, by the law of their states, may be appointed and may accept appointment to act as executor or trustee under the last will and testament of any deceased person in their state, may qualify for these roles in Vermont through a special process.
This process involves application to the Secretary of State in the manner already described to apply for a certificate of authority to transact business in Vermont as a foreign corporation.
The issuance of this certificate for foreign banks critically depends on whether the same privilege is accorded Vermont banking corporations and trust companies in the home jurisdiction of the applicant.
Applicants for this privilege are encouraged to attach a copy of the applicable law on the subject to their applications to speed this process along.
Copies of Documents
There is a fee for copies of corporate documents and certification of those documents.
Service of Process
Service of process on a foreign corporation may be made by serving the corporation directly or by serving the Secretary of State. There is a fee for this service.