Committee hears plan to standardize service-of-process and agent requirements across business types

At a March 12, 2025 hearing, the Vermont House Committee on Commerce & Economic Development heard testimony from the Secretary of State’s office that proposed H.243 would harmonize service-of-process provisions across the state’s various business-organization statutes.

David Hall, director of the Business Services Division, told the committee the bill would adopt a single, consistent set of steps for when the Secretary of State becomes the default agent for service of process. Hall said the proposal largely adopts language from a 2015 enactment of Title 11 C governing mutual benefit enterprises and would put the same “reasonable diligence” and forwarding rules into one governing section (referenced in discussion as 16 56) that all entity types would use.

Hall summarized the standard: if a registrant (or a foreign entity doing business in Vermont) has failed to designate an agent, has appointed an agent who cannot be found with reasonable diligence, or is conducting business without registering, the Secretary of State is the agent for service of process. The office would receive duplicate copies of process, file a record of service, and forward a copy by registered or certified mail to the last known address in the Secretary’s records; effectiveness dates are tied to receipt, return-receipt date, or five days after mailing. Hall stressed the proposal’s goal is uniformity across corporate forms, not a substantive change to current practice; “procedurally, probably nobody in the universe is gonna notice any difference,” he said.

Committee members asked whether the change would practically accelerate litigation or enforcement. A committee member observed the uniform language may help the Secretary’s office act more efficiently when regular agency-designation pathways fail. Hall and staff said the change will simplify staff work because one section would govern rather than multiple similar provisions scattered through different chapters.

The bill would also explicitly apply agent requirements that sometimes are missing from specific statutes (Hall pointed to an inconsistency in the nonprofit cooperative association provisions) and would clarify that changes to an agent must be filed using a statement of change rather than as part of an annual report. The committee and Legislative Counsel briefly discussed cross-referencing fees and whether the proposed consolidated language should explicitly cite the chosen governing subsection (16 56) in all places; staff agreed to refine cross references in the draft language.

Ending: Committee members signaled general support for harmonizing the service-of-process framework and asked staff to tidy cross references and return with draft report language.