A Foreign Nonprofit Corporation Seeking Authority in Vermont

Vermont's name for the permission is a certificate of authority. A nonprofit counts as foreign when it was incorporated by another state or a country, and that label never expires. The certificate does not touch the home charter. It adds the state's recognition that the organization may transact business in Vermont.

The rules are in chapter 15 of Title 11B. Montpelier is where applications go, to the Business Services staff of the Secretary of State, and most arrive through the Online Business Service Center. The usual online turnaround is under one business day, with no surcharge for choosing online. A mailed application can take 7 to 10 business days.

Under section 15.01, authority must come first: a foreign nonprofit may not transact business in Vermont without a certificate. The phrase is not defined. The statute says instead that some activities, along with others, do not amount to transacting business:

• Taking part in a legal proceeding, or settling one
• Board and member gatherings, and the organization's other internal housekeeping
• Having bank accounts
• Running an office for transferring memberships or securities, or appointing a trustee or depositary for them
• Selling through independent contractors
• Soliciting orders that cannot become contracts until accepted outside Vermont
• Taking on debt, along with mortgages and liens
• Collecting what is owed, and enforcing liens that back the debt
• Owning, without more, real or personal property
• A single deal completed inside 30 days and unconnected to any repeating pattern
• Interstate commerce

Because the statute says "among others," the list is open-ended, and the Secretary of State cautions that an organization whose Vermont activity merely includes these items, but extends past them, is not exempt. Delivering programs in the state, paying staff here, keeping an office or running recurring fundraising events would usually put a nonprofit on the registering side.

Property and "without more"

Item nine is worded carefully: owning, without more, real or personal property. A charity that holds a Vermont parcel as an investment, or received a building by gift and has not yet used it, fits comfortably. Running programs from that building is the "more" that changes the picture. If your activity lies in between, a Vermont attorney can help you place it.

Section 15.03 tells the applicant to state:

• Its name, or an available name for use in Vermont
• The state or country of incorporation, the incorporation date and the period of duration
• The street address of its principal office
• A Vermont registered office, with the registered agent's name and email
• Current directors and officers with addresses, and any other principals it wishes to list
• Whether it has members
• Which Vermont category it would fall into, public benefit or mutual benefit, if it had been incorporated here

The application fee is $175. A change of name, duration or home jurisdiction calls for a new, amended certificate; the fee schedule lists it at $45.

Vermont asks for it. Section 15.03(b) makes a certificate of existence part of the package, or a comparable document, authenticated by the home-state official who has the corporate records.

The Secretary of State's foreign registration page adds the age limit for nonprofits: 30 days counted back from the filing date. Limited liability companies are allowed 90 days, so an LLC's checklist will give you the wrong date. The online filing has an upload step for common image types and PDF files. Your home state decides the price, and you order the certificate there shortly before you file.

A foreign nonprofit's name is compared with the Secretary of State's records, and it must be distinguishable from granted, registered and reserved names and from other entities' names. When the home name is unavailable here, the application gives a different name for Vermont that satisfies section 15.06. The state's advice is to search its database before you file and to wait for the certificate before printing anything with the name.

The agent

The application names a Vermont registered office and a registered agent (section 15.03). Under 11 V.S.A. section 1655, the choices are an individual living in Vermont or a company that operates here lawfully and has a Vermont location. The application identifies the agent by name and email, and listing someone is a representation that the person agreed. A new agent is substituted by a statement of change, which costs $35. An agent who wishes to resign files a statement of resignation, effective 30 days later or when a replacement is named.

Nonprofits renew every second year, which is lighter than the annual cycle for for-profit corporations. The biennial report is filed between January 1 and April 1. The first falls in the calendar year following the year of authorization, and the later ones come two years apart. Expect to give the corporation's name, home state, registered office and agent, principal office address, directors and principal officers, and a short account of its activities.

The fee turns on payroll. It is $35 if any officer, director or employee received pay in the previous calendar year and nothing if no one did. An organization that falls behind can lose its certificate, and the fee schedule prices reinstatement at $45 for the application plus a $25 reinstatement fee.

Leaving Vermont requires a certificate of withdrawal, for $10 under the fee schedule. In the application the organization declares that Vermont operations have ended, withdraws the agent's authority, and points anyone with a claim from the authorized years to the Secretary of State for service. It also supplies a mailing address and a promise to report changes to it. Charitable solicitation rules and tax-exempt status are separate subjects, not part of this filing.

Section 15.02 sets out the consequences. A nonprofit conducting business without a certificate may not pursue a proceeding in a Vermont court, nor lean on a counterclaim, crossclaim or affirmative defense of its own, until it holds one. The same obstacle applies to a successor or assignee of its claims, and a court may put a case on hold while it determines whether a certificate was required.

The state may also assess a daily penalty of $50 for unauthorized activity (maximum $10,000 per year), add the fees that would have come due, and impose whatever other penalties the law provides. The Attorney General is allowed to sue for those sums and to restrain the organization. Two things stay intact: the nonprofit's acts are not undone, and it may answer a lawsuit against it. For a nonprofit that needs to enforce a pledge, a lease or a vendor contract, though, being unable to sue is the bigger cost.

The Mainstay Filing checkout for foreign qualification turns away nonprofit corporations, since it was built around LLCs and for-profit corporations. The organization, or its lawyer, completes the Vermont application. Mainstay Filing supplies the agent, at $149 per year and the same number each renewal. The Vermont address you put on the application is Mainstay Filing's, and it shows on the public record.

When a process server leaves legal papers at that address, they are scanned to your account on arrival day at no charge; up to three letters each year from government agencies receive the same free scan. Where another company is the agent of record, Mainstay Filing prepares the substitution for you and passes on the state's fee. The Vermont registered agent page explains the service. Mainstay Filing is not a law firm.