Organization and Commencing Business

V.S.A. tit. 8, ch. 203, subch. 1

in effect

8 V.S.A. § 13101 Application to organize

13101. Application to organize (a) Application. Two or more persons, all of whom shall reside in or reside proximate to the geographic area to be served by the institution, may agree in writing to associate themselves for the purpose of forming a mutual or cooperative financial institution pursuant to this chapter, and those persons shall be considered as the organizers of the applicant. The organizers shall file with the Commissioner an application for permission to organize a mutual or cooperative financial institution. The application shall contain the following: (1) The name by which the financial institution will be known. (2) The purpose for which it is to be formed, including whether a certificate of general good is sought to conduct business as a mutual financial institution or a cooperative financial institution. (3) The city or town within this State where the financial institution’s principal office is to be located. (4) The proposed minimum amount of initial capital contributions to be deposited and a statement by each organizer setting forth his or her name, address, and occupation, together with the amount of initial capital that such organizer shall deposit, which statement shall be subscribed by the organizer. (5) The names, addresses, and occupations of the organizers of the institution, together with a statement as to the character, reputation, and financial responsibility and competence of such persons. (6) Documents that set forth the proposed institution’s organizational structure and business plan, including: (A) A copy of the organizational documents. (B) The names of the organizers of the institution who are to serve until the initial meeting of the members or corporators or until their successors are elected and qualified, and the names, addresses, and occupations of the directors who will be voted on by the members or corporators at the initial meeting, together with a statement as to the character, reputation, and financial responsibility of each. A list of the names, addresses, and official positions of the persons who are to be responsible for the conduct of the affairs of the applicant, including all members of the governing body, any committees and the executive officers; a statement as to the character, reputation, financial responsibility, and competence and experience in banking and business of such persons, and such disclosure and conflict of interest statements as required. (C) A financial plan that includes a three-year projection of the initial operating results anticipated and a description of the proposed method of marketing the plan, and a statement as to the sources of initial capital as well as any other sources of funding. (7) The reasons that an institution of the type specified in subdivision (2) of this subsection is needed in the proposed location. (8) Copies of any application filed with any other supervisory agency. (9) Any additional information as the Commissioner may require. (b) Publication of notice. After determining that the application required by this section is complete, the Commissioner shall advise the organization or the organizers of the entity to publish any notice that will be required by the Commissioner under subsection 11702(c) of this title. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

8 V.S.A. § 13102 Issuance of certificate of general good; refusal to issue certificate of general good

13102. Issuance of certificate of general good; refusal to issue certificate of general good (a) Certificate of general good. The Commissioner shall determine whether or not a certificate of general good shall be granted to organize a financial institution and shall make the decision in accordance with the requirements of chapter 201, subchapter 7 of this title. (b) Conditions. A grant of a certificate of general good may include such terms and conditions as the Commissioner determines necessary. These may include conditions regarding the organizational form of the financial institution under this chapter. (c) Effect of refusal to issue certificate of general good. If the Commissioner refuses to issue a certificate of general good, a new application may be filed by the organizers after one year from the date of the refusal. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

8 V.S.A. § 13103 Requirements to commence business; minimum initial capital contribution deposits; examination; certificate of authority

13103. Requirements to commence business; minimum initial capital contribution deposits; examination; certificate of authority (a) At the time the certificate of general good is issued, the Commissioner shall issue an order granting permission to organize that shall set forth the minimum amount of capital deposits that the mutual or cooperative financial institution will be required to have to commence business, which in no event shall be less than $250,000.00. (b) The Commissioner may set different minimum capital deposit requirements for different types of financial institutions, and in determining the minimum amount of capital deposits for a financial institution, may consider such factors as the population of the area where the proposed institution is to be located, competition among financial institutions in that locale, the projected volume and type of business to be conducted, the inherent risks in the business to be conducted, and the need to protect depositors and other creditors of the institution. (c) All capital deposits shall be in the form of cash, unless otherwise approved by the Commissioner. (d) Upon receipt of a certificate of general good pursuant to section 13102 of this title, the organizers set forth in the application for permission to organize shall hold the institution’s franchise until such time as the requirements of this subchapter are met or the Commissioner determines that said requirements have not been met. (e)(1) Within 30 days of receipt of a certificate of general good pursuant to section 13102 of this title, the first meeting of the organizers of the financial institution shall be called by a notice signed by that organizer who was designated in the application for that purpose, or by a majority of the organizers. Such notice shall state the time, place, and purposes of the meeting. A copy of the notice shall be given to each organizer at least three days before the date appointed for the meeting, or left at each organizer’s residence or usual place of business, or deposited in the post office and addressed to such an organizer at that organizer’s residence or usual place of business, and another copy thereof, together with an affidavit of one of the organizers that the notice has been duly served, shall be recorded with the records of the institution. If all the organizers, in writing indorsed upon the application to organize, waive such notice and fix the time, place, and purposes of the meeting, no notice is required. (2) At the first meeting and thereafter, the organizers of a mutual financial institution shall be known as the “corporators” and the organizers of a cooperative financial institution shall be known as the “incorporators.” (3) At such meeting or at any adjournment thereof, the corporators or incorporators shall by ballot select a temporary secretary, adopt the organizational documents of the institution, and, in such manner as the internal governance document or the law provides, elect directors and officers. All persons so elected shall qualify for their offices as provided in subchapters 4 and 5 of this chapter. (4) The temporary secretary shall make and attest a record of the proceedings until the secretary has been chosen and sworn, including a record of such choice and qualification. (5) The secretary shall file copies of the organizational documents with the Commissioner within 10 days of their adoption. Within 15 business days of receipt, the Commissioner shall, after examining such organizational documents for conformance with the requirements of this title and other applicable law, approve or disapprove of the filed documents. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

8 V.S.A. § 13104 Submission to Secretary of State

13104. Submission to Secretary of State Following the meeting required under subdivision 13103(e)(1) of this title and approval by the Commissioner under subdivision 13103(e)(5) of this title, the directors so elected shall submit to the Secretary of State an attested copy of each of the institution’s organizational documents required by Title 11 or 11A, as the case may be. The Secretary of State shall determine whether such organizational documents satisfy the requirements of Title 11 or 11A. If such requirements are met, the Secretary of State shall file the organizational documents according to the provisions of law. The filing of the organizational documents by the Secretary of State shall not authorize the transaction of business by the financial institution until all conditions of this subchapter are satisfied. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

8 V.S.A. § 13105 Payment of capital deposits

13105. Payment of capital deposits (a) A financial institution organized under this chapter shall not commence business until the minimum capital deposits required in its permission to organize have been deposited to the credit of the financial institution in a depository designated by the governing body. (b) At such time as the institution has received to its credit the minimum capital deposits required in section 13103 of this title, a complete list of the capital depositors, with the name, address, occupation, and the amount of capital deposited by each, shall be filed with the Commissioner, which list shall be verified by an officer and the secretary of the institution. Such deposits shall be handled by the institution in accordance with subchapter 2 of this chapter. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

8 V.S.A. § 13106 Certificate to commence business

13106. Certificate to commence business (a) Upon receipt of the statement required in section 13105 of this title, the Commissioner shall cause an examination to be made to determine if the minimum capital deposits have been credited to the account of the institution and that all requirements of this section and other provisions of law have been met. (b) Upon completion of the examination, and if it appears to the Commissioner that the whole of the required capital deposits has been paid in, the Commissioner shall issue a certificate under seal authorizing the financial institution to commence business, and this certificate shall be filed with the Secretary of State. In the case of a violation of this provision, the officers and directors assenting to the activity shall be personally liable for all debts incurred before the certificate is issued and filed. Such certificate shall be conclusive of the facts stated in the certificate and it shall be unlawful for any such mutual or cooperative financial institution to begin transacting business until such a certificate has been granted. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2021, No. 105 (Adj. Sess.), § 291, eff. July 1, 2022.

8 V.S.A. § 13107 Failure to commence business

13107. Failure to commence business (a) As to any mutual or cooperative financial institution that fails to commence business as a financial institution within two years after receiving a certificate of general good under section 13102 of this title, its certificate of general good and its right to do business shall lapse. (b) Notwithstanding the time limitation in subsection (a) of this section, the Commissioner may extend the period in which business shall be commenced for a period not to exceed six months upon written application by the institution setting forth the reasons for the extension, filed before the expiration of the time period established by subsection (a) of this section. If an extension is granted by the Commissioner, the Commissioner shall notify the Secretary of State. (c) Upon the expiration of the time periods set forth in subsections (a) and (b) of this section, the contributors of initial capital deposits of such institution shall be entitled to the return of any amounts that they have paid to the institution and all expenses incurred in the organization shall be borne by the original organizers who were named in the application for permission to organize. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/08/203Fetched: 10/21/2026