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Form a Business

Shares

V.S.A. tit. 11A, ch. 6, subch. 1
in effect

11A V.S.A. § 6.01 Authorized shares

6.01. Authorized shares (a) The articles of incorporation must prescribe the classes of shares and the number of shares of each class that the corporation is authorized to issue. If more than one class of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class and, prior to the issuance of shares of a class, the preferences, limitations, and relative rights of that class must be described in the articles of incorporation. All shares of a class must have preferences, limitations, and relative rights identical with those of other shares of the same class except to the extent otherwise permitted by section 6.02 of this title. (b) The articles of incorporation must authorize: (1) one or more classes of shares that together have unlimited voting rights; and (2) one or more classes of shares (which may be the same class or classes as those with voting rights) that together are entitled to receive the net assets of the corporation upon dissolution: (c) The articles of incorporation may authorize one or more classes of shares that: (1) have special, conditional, or limited voting rights, or no right to vote, except to the extent prohibited by this act; (2) are redeemable or convertible as specified in the articles of incorporation; (A) at the option of the corporation, the shareholder, or another person or upon the occurrence of a designated event; (B) for cash, indebtedness, securities, or other property; (C) in a designated amount or in an amount determined in accordance with a designated formula or by reference to extrinsic data or events; (3) entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative; (4) have preference over any other class of shares with respect to distributions, including dividends and distributions upon the dissolution of the corporation. (d) Terms of shares may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with subsection 1.20(j) of this title. (e) Any of the terms of shares may vary among holders of the same class or series so long as such variations are expressly set forth in the articles of incorporation. (f) The description of the designations, preferences, limitations, and relative rights of share classes in subsection (c) of this section is not exhaustive. Added 1993, No. 85, § 2, eff. Jan. 1, 1994; amended 2007, No. 190 (Adj. Sess.), § 85, eff. June 6, 2008.

11A V.S.A. § 6.02 Terms of class or series determined by board of directors

6.02. Terms of class or series determined by board of directors (a) If the articles of incorporation so provide, the board of directors may determine, in whole or in part, the preferences, limitations, and relative rights (within the limits set forth in section 6.01 of this title) of: (1) any class of shares before the issuance of any shares of that class; or (2) one or more series within a class before the issuance of any shares of that series. (b) Each series of a class must be given a distinguishing designation. (c) All shares of a series must have preferences, limitations, and relative rights identical with those of other shares of the same series and, except to the extent otherwise provided in the description of the series, with those of other series of the same class. (d) Before issuing any shares of a class or series created under this section, the corporation must deliver to the Secretary of State for filing articles of amendment, which are effective without shareholder action, that set forth: (1) the name of the corporation; (2) the text of the amendment determining the terms of the class or series of shares; (3) the date it was adopted; and (4) a statement that the amendment was duly adopted by the board of directors. Added 1993, No. 85, § 2, eff. Jan. 1, 1994.

11A V.S.A. § 6.03 Issued and outstanding shares

6.03. Issued and outstanding shares (a) A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted, or cancelled. (b) The reacquisition, redemption, or conversion of outstanding shares is subject to the limitations of subsection (c) of this section and to section 6.40 of this title. (c) At all times that shares of the corporation are outstanding, one or more shares that together have unlimited voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding. Added 1993, No. 85, § 2, eff. Jan. 1, 1994.

11A V.S.A. § 6.04 Fractional shares

6.04. Fractional shares (a) A corporation may: (1) issue fractions of a share or pay in money the value of fractions of a share; (2) arrange for disposition of fractional shares by the shareholders; (3) issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering enough scrip to equal a full share. (b) Each certificate representing scrip must be conspicuously labeled “scrip” and must contain the information required by subsection 6.25(b) of this title. (c) The holder of a fractional share is entitled to exercise the rights of a shareholder, including the right to vote, to receive dividends, and to participate in the assets of the corporation upon liquidation. The holder of scrip is not entitled to any of these rights unless the scrip provides for them. (d) The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including: (1) that the scrip will become void if not exchanged for full shares before a specified date; and (2) that the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders. Added 1993, No. 85, § 2, eff. Jan. 1, 1994.
Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/11A/006Fetched: 10/21/2026

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