Vermont Statutes Title 11 Sec. 14-09
Terms Used In Vermont Statutes Title 11 Sec. 14-09
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Distribution: means a direct or indirect transfer of money or other property (except its own shares) or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. See
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Secretary: means the corporate officer to whom the board of directors has delegated responsibility under subsection 8. See
- Shareholder: means the person in whose name shares are registered in the records of a corporation or upon presentation for registration are entitled to be registered in the records of a corporation. See
- State: when applied to the different parts of the United States may apply to the District of Columbia and any territory and the Commonwealth of Puerto Rico. See
§ 14.09. Tax liabilities
(a) Notwithstanding any other provisions of this chapter, a corporation‘s liability to the Vermont Department of Taxes for unpaid taxes and other amounts shall not be affected by the corporation’s dissolution and winding up of its affairs except to the extent provided in subsections (b), (c), and (d) of this section.
(b) Any corporation that has filed articles of dissolution with the Secretary of State pursuant to section 14.03 of this title may apply for a tax clearance from the Department of Taxes. Upon issuance of such a tax clearance, the applicant corporation shall have no further liability to the Department of Taxes after the effective date of the clearance for a tax liability incurred up to the date stated in the clearance, subject to the right of the Department of Taxes to review and determine the accuracy of the information provided by the corporation or its representatives and used by the Department of Taxes to process such tax clearance. The corporation will continue to be liable to the Department of Taxes for any liability incurred after the date stated in the clearance.
(c) The shareholders of a dissolved corporation shall not be liable for any unpaid taxes or other amounts payable to the Department of Taxes as a result of the corporation’s dissolution and winding up of its affairs except if the corporation has failed to obtain a tax clearance as provided in subsection (b) of this section or to the extent that such liabilities arose subsequent to the date stated in such tax clearance and insufficient assets are then held by the corporation to pay its tax liabilities. In such event, the shareholders of the dissolved corporation shall be severally liable for the dissolved corporation’s unpaid taxes and other liabilities to the Department of Taxes in an amount equal to the lesser of the shareholder‘s pro rata share of the tax liability or the corporate assets distributed to him or her in liquidation, whichever is less, but a shareholder’s total liability for all claims and liabilities under this chapter, including those subject to the provisions of sections 14.06 and 14.07 of this title, may not exceed the total amount of assets distributed to the shareholder.
(d) The directors of a dissolved corporation shall not be liable, in such capacity, for any unpaid taxes and other liabilities of such corporation to the Department of Taxes as a result of its dissolution and winding up of its affairs pursuant to the provisions of this chapter. However, directors shall be liable if they fail to use reasonable efforts to cause the corporation to obtain the clearance described under subsection (b) of this section through the last date on which the corporation incurred any such liabilities and fail to use reasonable efforts to cause the corporation to pay or create sufficient reserves to pay such liabilities, to the extent of available corporate assets, and vote for or assent to the distribution of assets to the shareholders. Directors shall only be liable under this subsection to the extent that corporate assets otherwise available to pay tax liabilities are distributed to shareholders, and the corporation lacks sufficient assets to pay such liabilities.
(e) The remedies provided to the Department of Taxes in this section shall be in addition to, and not in derogation of, any other remedies provided by law. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)