Question 1

Do I need a tax clearance from the Vermont Department of Taxes before filing articles of dissolution?

Accepted Answer

No, and you could not get one if you tried. 11A V.S.A. Section 14.09(b) begins with the words that settle it: any corporation that has filed articles of dissolution with the Secretary of State pursuant to Section 14.03 may apply for a tax clearance from the Department of Taxes. The applicant has to be a corporation that has already filed, so the clearance cannot sit in front of the filing as a condition. A keyword scan of the whole codified dissolution chapter found nine uses of the word clearance and every one of them is inside Section 14.09, with no directive anywhere telling the Secretary of State to refuse a filing over tax. Apply after the articles are filed, not before.

Question 2

Who becomes personally liable if a Vermont corporation never obtains that tax clearance?

Accepted Answer

They lose a shield they would otherwise have. Section 14.09(c) says shareholders of a dissolved corporation are not liable for its unpaid taxes except where the corporation failed to obtain a tax clearance, and in that case they become severally liable, each for the lesser of a pro rata share of the tax liability or the corporate assets distributed to that shareholder in liquidation. Section 14.09(d) treats directors the same way: not liable in that capacity, unless they failed to use reasonable efforts to cause the corporation to obtain the clearance, failed to use reasonable efforts to have it pay or reserve for the liability, and voted for or assented to distributing assets to shareholders. Section 14.09(a) is the reason all of this matters: the corporation's own liability to the Department of Taxes survives dissolution.

Question 3

How much does it cost to file articles of dissolution in Vermont, and where does the filing go?

Accepted Answer

$35.00. The fee statute, 11A V.S.A. Section 1.22(a)(11), prints that figure for articles of dissolution, and the Secretary of State's published schedule carries $35.00 twice over, once on the Section 14.01 line and once on the Section 14.03 line. Nothing in the schedule or in Section 1.22 offers an expedited tier or adds a surcharge, and the office says online filing costs no more than paper. The filing goes to the Secretary of State's Business Services Division at 128 State Street, Montpelier, VT 05633, by phone 802-828-2386, with online submission through the Online Business Service Center. By mail, allow 7 to 10 business days, and send one exact or conformed copy with the fee as Section 1.20(i) requires.

Question 4

Who has to approve dissolving a Vermont corporation, and what vote is required?

Accepted Answer

The board starts it and the shareholders finish it. Under Section 14.02(a) the board proposes dissolution for submission to the shareholders, and under Section 14.02(b)(1) the board must recommend it unless it determines that conflict of interest or other special circumstances mean it should make no recommendation, in which case it must communicate the basis for that determination. The threshold in Section 14.02(e) is a majority of all the votes entitled to be cast on the proposal, unless the articles of incorporation or the board require a greater vote or a vote by voting groups. Read that carefully: it is all votes entitled to be cast, so abstentions and no-shows count against the proposal. Every shareholder has to get notice of the meeting whether or not entitled to vote, and the notice must say that dissolution is a purpose of the meeting (Section 14.02(d)).

Question 5

How do I notify creditors when dissolving a Vermont corporation, and what is the deadline?

Accepted Answer

Vermont gives you two optional tools and a penalty for using neither. Section 14.06(a) says a dissolved corporation may dispose of known claims by following its procedure; choose it and the written notice must describe what a claim has to contain, give a mailing address, set a deadline no fewer than 120 days from the notice's effective date, warn that a late claim is barred, and state the deadline for suing on a rejected claim, which Section 14.06(c)(2) fixes at 90 days from the rejection notice. Section 14.07 handles claimants you cannot identify: publish the notice one time in a newspaper of general circulation in the county where the principal office is or was last located and send it to the Office of the Attorney General, stating a five-year cutoff. Skip both and Section 14.08(b) makes you pay or make reasonable provision for all claims and obligations, contingent and unmatured ones included.

Question 6

Does notifying creditors protect a dissolved Vermont corporation from a tax bill?

Accepted Answer

No, and this is the trap worth knowing. Section 14.06(d) defines claim for the known-claim procedure so that it does not include a contingent liability, a claim based on an event after the effective date of dissolution, or a claim on taxes due or assessable by the State of Vermont. Taxes are carved straight out. So however carefully the 120-day notices go out and however long ago the newspaper notice ran, the Vermont tax exposure is untouched by any of it. The only instrument the statute offers for that is the Section 14.09(b) tax clearance after filing. Note too that Section 14.07's publication route caps a claimant's reach at undistributed assets plus what shareholders received, and extinguishes a claim against a shareholder at the earlier of the applicable statute of limitations or five years after the dissolution took effect.

Question 7

Do I have to tell the Vermont Department of Labor about unpaid wages when I dissolve?

Accepted Answer

Only if wages are actually owed, but the question gets asked either way. Section 14.03(a)(6) makes a statement whether the corporation owes any unpaid wages to its employees one of the six items the articles must set forth, so the answer goes on the filing whichever way it falls. Section 14.03(c) adds the second step: if a corporation owes unpaid wages to its employees, it shall also file a statement to that effect with the Department of Labor. The section heading itself flags it, reading articles of dissolution, content of notice, notice to Department of Labor regarding unpaid wages. Vermont publishes no form number or filing address for that statement, so contact the Department of Labor directly rather than relying on a third-party form.

Question 8

How long does a dissolved Vermont corporation keep existing, and can the filing be undone?

Accepted Answer

It keeps existing, on a short leash, and yes within four months. Section 14.05(a) says a dissolved corporation continues its corporate existence but may not carry on any business except what is appropriate to wind up and liquidate, which it lists as collecting assets, disposing of property not distributed in kind, discharging or providing for liabilities, distributing what remains to shareholders, and whatever else winding up takes. Section 14.05(b) confirms what dissolution does not do: it does not transfer title to property, does not abate a pending proceeding, and does not end the registered agent's authority for service of process. Section 14.04(a) allows revocation within 120 days of the effective date, authorized the same way the dissolution was, and Section 14.04(e) relates it back so the corporation resumes business as if dissolution had never happened. That filing also costs $35.00.

Vermont Articles of Dissolution

Find out where you stand in Vermont

Introduction

Key Things to Know

Key decisions before you file

Customize your Articles of Dissolution Template with DocDraft

Vermont Requirements for Articles of Dissolution

Tax Clearance Is Applied For After Filing, Not Before

Shareholder and Director Exposure for Skipping the Clearance

Six Statutory Recitals, No Published Form Number

Filing Fee $35.00, No Expedited Tier

A Majority of All Votes Entitled to Be Cast

Elective Creditor Notice: 120 Days, 90 Days, Five Years

Vermont Taxes Are Carved Out of the Claim Bar

Unpaid-Wages Statement to the Department of Labor

Frequently Asked Questions