Can a corporation that keeps only a registered office in Virginia serve as a deed-of-trust trustee, or does it need a true 'principal office' here to foreclose?
Plain-English summary
Senator Petersen asked the AG what counts as a corporation's "principal office" under Virginia's deed-of-trust statute, § 55-58.1(2). The statute bars a corporation from acting as a trustee on a Virginia deed of trust unless it is chartered under Virginia or federal law and its principal office is within Virginia. The practical question: could a national bank or out-of-state trustee qualify simply by maintaining a registered office address in the Commonwealth, even though no actual trustee work happens there?
Cuccinelli concluded that "principal office" carries the same meaning the Code uses elsewhere. Title 13.1 (Virginia's corporation law) defines "principal office" as "the office, in or out of the Commonwealth, where the principal executive offices of a domestic or foreign corporation are located, or, if there are no such offices, the office, in or out of the Commonwealth, so designated by the board of directors." Because the Virginia Code is a single body of law and the same phrase is used elsewhere, the AG read § 55-58.1(2) to require that definition.
A registered office is the in-state address every corporation chartered or doing business in Virginia must maintain. It can be the same as a place of business, but it need not be. Unless the registered office is also the principal office (the actual headquarters where executive business is conducted), it does not satisfy § 55-58.1(2). Whether any particular facility qualifies is a fact-specific question.
Currency note
This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Common questions
What was the practical concern behind the question?
In the wake of the 2008 mortgage crisis, large servicers were appointing as substitute trustees corporations whose only Virginia footprint was a registered-agent address (often a mailbox at a service company). The opinion targets that practice, requiring an actual operational presence here.
What is the difference between a "registered office" and a "principal office" in Virginia corporate law?
Every corporation chartered by or doing business in the Commonwealth must maintain a registered office, which may be the same as any of its places of business but need only be an address within Virginia. A principal office, under the Title 13.1 definition, is where the corporation's principal executive offices are located. The two can overlap, but they need not, and only the principal office satisfies § 55-58.1(2).
Did the AG explain how a court might evaluate whether a place qualifies as a principal office?
No. The AG said expressly that whether any particular facility or operation satisfies the criteria and so constitutes a principal office is a fact-specific determination beyond the scope of the opinion.
Background and statutory framework
Section 55-58.1(2) sets two requirements for a corporation to serve as trustee of a security trust on Virginia real property: it must be chartered under Virginia or federal law, and it must maintain its principal office in Virginia. The General Assembly did not define "principal office" within Title 55 itself.
When a statute does not define a term, the opinion applies the plain and ordinary meaning of the term, controlled by the context in which it is used. It also reasons that, because the Code of Virginia is a single body of law, a definition of the same phrase used elsewhere in the Code may be looked to as an interpretive guide.
Title 13.1, the corporation chapter, defines "principal office" as the office, in or out of the Commonwealth, where the principal executive offices are located, or, if there are no such offices, the office so designated by the board of directors. The designation of the principal office in the most recent annual report filed under § 13.1-775 is conclusive for purposes of that chapter.
Under Virginia law, every corporation chartered by or doing business in the Commonwealth must maintain a registered office within the Commonwealth. It may be the same as any of the corporation's places of business but need only be an address within Virginia.
Citations
- Va. Code § 55-58.1 (security trust trustee requirements)
- Va. Code § 13.1-775 (annual report designation of principal office)
- Title 13.1 (corporation chapter, definition of "principal office")
Source
- Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
- Original PDF: https://www.oag.state.va.us/files/Opinions/2012/11-053_Petersen.pdf
Original opinion text
COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General
September 14, 2012
The Honorable J. Chapman Petersen
Member, Senate of Virginia
Post Office Box 1066
Fairfax, Virginia 22038
900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1
Dear Senator Petersen:
I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.
Issues Presented
You ask what constitutes a "principal office" under § 55-58.1(2) of the Code of Virginia. You further inquire specifically whether a "principal office" requires more than a registered office at which none of the duties of a trustee are performed or managed in order to foreclose on homes in Virginia under a deed of trust.
Response
It is my opinion that, for purposes of § 55-58.1(2), "principal office" may be defined according to the definition of this term provided in Title 13.1 of the Code of Virginia. It is further my opinion that a corporation's registered office does not satisfy the requirements of § 55-58.1(2) unless such office also meets the definition of "principal office."
Applicable Law and Discussion
Section 55-58.1(2) provides, in pertinent part, that "[n]o corporation may be named or act as the trustee or as one of the trustees of a security trust unless it is chartered under the laws of this Commonwealth or of the United States of America, and unless its principal office is within this Commonwealth." Thus, to serve as a trustee, a corporation must meet two requirements: 1) it must be chartered either under Virginia or federal law, and 2) it must maintain its principal office within the Commonwealth.
The General Assembly does not define the term "principal office" in Title 55. In the absence of a statutory definition, the plain and ordinary meaning of a term is controlling, given the context in which it is used. The term "principal office" is defined elsewhere in the Code, and this statutory definition may be looked to as an interpretative guide for determining the plain and ordinary meaning of the phrase as it is used in § 55-58.1(2). Title 13.1, which governs corporations generally, provides that a "principal office" is
the office, in or out of the Commonwealth, where the principal executive offices of a domestic or foreign corporation are located, or, if there are no such offices, the office, in or out of the Commonwealth, so designated by the board of directors. The designation of the principal office in the most recent annual report filed pursuant to § 13.1-775 shall be conclusive for purposes of this chapter.
Because the Code of Virginia constitutes a single body of law and other sections may be looked to where the same phraseology is used, I conclude that an office in Virginia meeting this definition satisfies the requirement of § 55-58.1(2) that a corporation acting as a trustee of a security trust maintain its principal office "within this Commonwealth."
Under Virginia law, all corporations, whether chartered by or doing business in the Commonwealth, must maintain a registered office within the Commonwealth. Provided it is within the Commonwealth, a registered office "may be the same as any of its places of business[.]" To qualify as a trustee under § 55-58.1, on the other hand, a corporation must maintain its principal office in the Commonwealth. I therefore conclude that unless the corporation's registered office is also its principal office, as defined above, it would not serve to meet the requirements of § 55-58.1(2).
Nonetheless, as a final comment, I must note that whether any particular facility or operation satisfies such criteria and thereby constitutes a principal office is a fact-specific determination beyond the scope of this Opinion.
Conclusion
Accordingly, it is my opinion that, for purposes of § 55-58.1(2), "principal office" may be defined according to the definition of this term provided in Title 13.1 of the Code of Virginia. It is further my opinion that a corporation's registered office does not satisfy the requirements of § 55-58.1(2) unless such office also meets the definition of "principal office."
With kindest regards, I am,
Very truly yours,
Kenneth T. Cuccinelli, II
Attorney General