EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXIS TING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0996*
HOUSE BILL 996
C1 2lr2855
CF SB 879
By: Delegate Brooks
Introduced and read first time: February 10, 2022
Assigned to: Economic Matters
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 3, 2022
CHAPTER ______
AN ACT concerning 1
Corporations and Associations – Ratification of Defective Corporate Acts 2
FOR the purpose of establishing a process by which a defective corporate act may be ratified 3
by a board of directors of a corporation or its stockholders; requiring a corporation 4
ratifying a defective corporate act that would have required a filing with the State 5
Department of Assessments and Taxation to file articles of validation with the 6
Department; authorizing an adversely affected person or entity to file an action 7
contesting a ratification under this Act; applying this Act to real estate investment 8
trusts; and generally relating to the ratification of defective corporate acts. 9
BY repealing and reenacting, with amendments, 10
Article – Corporations and Associations 11
Section 1–101(f), 1–203(b)(1), 1–301, and 8–601.1 12
Annotated Code of Maryland 13
(2014 Replacement Volume and 2021 Supplement) 14
BY repealing and reenacting, without amendments, 15
Article – Corporations and Associations 16
Section 1–101(g) 17
Annotated Code of Maryland 18
(2014 Replacement Volume and 2021 Supplement) 19
BY adding to 20
Article – Corporations and Associations 21 2 HOUSE BILL 996
Section 2–701 through 2–707 to be under the new subtitle “Subtitle 7. Ratification of 1
Defective Corporate Acts” 2
Annotated Code of Maryland 3
(2014 Replacement Volume and 2021 Supplement) 4
SECTION 1. BE IT ENACTED BY THE GENER AL ASSEMBLY OF MARYLAND, 5
That the Laws of Maryland read as follows: 6
Article – Corporations and Associations 7
1–101. 8
(f) (1) “Charter” includes: 9
(i) A charter granted by special act of the General Assembly; 10
(ii) Articles or certificate of incorporation; 11
(iii) Amended articles or certificate of incorporation; 12
(iv) Articles of restatement, if approved as described in § 2–609 of 13
this article; 14
(v) Articles of amendment and restatement; and 15
(vi) Articles or agreements of consolidation. 16
(2) “Charter” includes the documents referred to in paragraph (1) of this 17
subsection, either as: 18
(i) Originally passed or accepted for record; or 19
(ii) Amended, corrected, or supplemented by special act of the 20
General Assembly, articles of amendment, articles of amendment and reduction, articles of 21
extension, articles supplementary, articles or agreements of merger, articles of revival, [or] 22
a certificate of correction, OR ARTICLES OF VALID ATION. 23
(g) “Charter document” means any: 24
(1) Document enumerated in subsection (f) of this section; and 25
(2) Articles of reduction, articles of transfer, articles of merger, articles of 26
share exchange, articles of conversion, articles of dissolution, and stock issuance 27
statements. 28
1–203. 29
HOUSE BILL 996 3
(b) (1) Except as provided in paragraph (10) of this subsection, for each of the 1
following documents, the nonrefundable processing fee is $100: 2
Document 3
Articles of incorporation 4
Articles of amendment 5
Articles of extension 6
Articles of restatement of charter 7
Articles of amendment and restatement 8
Articles supplementary 9
Articles of share exchange 10
Articles of consolidation or merger 11
Articles of revival for stock corporation 12
Articles of revival for nonstock corporation 13
Articles of conversion 14
ARTICLES OF VALIDATION 15
1–301. 16
(a) Articles supplementary and articles of amendment, restatement, amendment 17
and restatement, consolidation, merger, share exchange, conversion, [and] extension, AND 18
VALIDATION and, except as provided in § 3–406(b) of this article, articles of dissolution 19
shall be executed as follows: 20
(1) They shall be signed and acknowledged for each corporation, statutory 21
trust, or real estate investment trust party to the articles, by its chairman or vice chairman 22
of the board of directors or board of trustees, by its chief executive officer, chief operating 23
officer, chief financial officer, president, or one of its vice presidents, or, if authorized by the 24
bylaws or resolution of the board of directors or board of trustees, by any other officer or 25
agent of the corporation, statutory trust, or real estate investment trust; 26
(2) They shall be witnessed or attested by the secretary, treasurer, chief 27
financial officer, assistant treasurer, or assistant secretary of each corporation, statutory 28
trust, or real estate investment trust party to the articles, or, if authorized by the bylaws 29
or resolution of the board of directors or board of trustees, by any other officer or agent of 30
the corporation, statutory trust, or real estate investment trust; 31
(3) They shall be signed and acknowledged for each other entity party to 32
the articles by a person authorized to act for the entity by law or by the governing document; 33
and 34
(4) The matters and facts set forth in the articles with respect to 35
authorization and approval shall be verified under oath as follows: 36
(i) With respect to any Maryland corporation, statutory trust, or 37
real estate investment trust party to the articles, by the chairman or the secretary of the 38
meeting at which the articles or transaction were approved, by the chairman or vice 39 4 HOUSE BILL 996
chairman of the board of directors or board of trustees, by the chief executive officer, chief 1
operating officer, chief financial officer, president, vice president, secretary, or assistant 2
secretary of the corporation, statutory trust, or real estate investment trust, or, if 3
authorized in accordance with item (1) of this subsection, by any other officer or agent of 4
the corporation, statutory trust, or real estate investment trust; 5
(ii) With respect to any foreign corporation party to articles of 6
consolidation, merger, or share exchange, by the chief executive officer, chief operating 7
officer, chief financial officer, president, vice president, secretary, or assistant secretary of 8
the corporation; and 9
(iii) With respect to any other Maryland or foreign entity party to the 10
articles, by a person authorized by law or by the governing document to act for the entity. 11
(b) All other instruments required to be filed with the Department may be signed: 12
(1) By the chairman or vice chairman of the board of directors, the chief 13
executive officer, chief operating officer, president, or any vice president and witnessed or 14
attested by the secretary or any assistant secretary, or by any other officer or agent of the 15
corporation who is authorized by the bylaws or resolution of the board of directors to 16
perform the duties usually performed by the secretary; 17
(2) If it appears from the instrument that there are no such officers, by a 18
majority of the directors or by such directors as may be designated by the board and the 19
instrument so states; or 20
(3) If it appears from the instrument that there are no officers or directors, 21
by the holders of a majority of outstanding stock. 22
SUBTITLE 7. RATIFICATION OF DEFECTIVE CORPORATE ACTS. 23
2–701. 24
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 25
INDICATED. 26
(B) “CORPORATE ACT ” MEANS ANY ACT TAKEN BY OR ON BEHALF OF A 27
CORPORATION BY THE B OARD OF DIRECTORS , A COMMITTEE OF THE B OARD OF 28
DIRECTORS, OR THE STOCKHOLDERS OF THE CORPORATION . 29
(C) “DATE OF THE DEFECTIVE CORPORATE ACT ” MEANS: 30
(1) THE DATE AND THE TIME A DEFECTIVE CORPORAT E ACT WAS 31
PURPORTEDLY TAKEN ; OR 32
HOUSE BILL 996 5
(2) IF THE EXACT TIME IS UNKNOWN, THE DATE AND APPROXI MATE 1
TIME A DEFECTIVE COR PORATE ACT WAS PURPO RTEDLY TAKEN. 2
(C) (D) “DEFECTIVE CORPORATE A CT” MEANS: 3
(1) ANY CORPORATE ACT PUR PORTEDLY TAKEN THAT , AT THE DATE 4
OF THE DEFECTIVE COR PORATE ACT, WOULD HAVE BEEN WITH IN THE POWER OF 5
THE CORPORATION BUT IS VOID OR VOIDABLE DUE TO A FAILURE OF 6
AUTHORIZATION ; OR 7
(2) AN OVERISSUE. 8
(D) (E) “FAILURE OF AUTHORIZAT ION” MEANS A CORPORATE ACT THAT : 9
(1) THE CORPORATION FAILE D TO AUTHORIZE OR AP PROVE; AND 10
(2) IS VOID OR VOIDABLE THE FAILURE OF A COR PORATION TO 11
AUTHORIZE, APPROVE, OR OTHERWISE EFFECT A CORPORATE ACT IN COMPLIANCE 12
WITH THE MARYLAND GENERAL CORPORATION LAW, ITS CHARTERS OR BYLA WS, 13
ANY ACTION TAKEN BY ITS BOARD OF DIRECTO RS, A COMMITTEE OF ITS B OARD OF 14
DIRECTORS, OR ITS STOCKHOLDERS , OR ANY PLAN OR AGREE MENT TO WHICH THE 15
CORPORATION IS A PAR TY, IF AND TO THE EXTENT THA T THE FAILURE WOULD 16
RENDER THE CORPORATE ACT VOID OR VOIDABLE . 17
(E) (F) “OVERISSUE” MEANS THE PURPORTED ISSUANCE BY A 18
CORPORATION OF STOCK OF: 19
(1) A CLASS OR SERIES IN E XCESS OF THE NUMBER OF SHARES OF 20
THE CLASS OR SERIES THAT THE CORPORATION HAS THE P OWER TO ISSUE UNDER § 21
2–201(A) OF THIS TITLE OR THE CORPORATION ’S CHARTER AT THE TIM E OF 22
ISSUANCE; OR 23
(2) ANY CLASS OR SERIES T HAT IS NOT AUTHORIZE D FOR ISSUANCE 24
BY THE CORPORATION ’S CHARTER. 25
(F) (G) (1) “PUTATIVE STOCK ” MEANS STOCK THAT CANNOT BE 26
DETERMINED BY THE BOARD OF DIRE CTORS TO BE VALID ST OCK. 27
(2) “PUTATIVE STOCK ” INCLUDES STOCK ISSUE D UPON EXERCISE OF 28
RIGHTS, OPTIONS, WARRANTS, OR THEIR SECURITIES CONVERTIBLE INTO OR 29
EXERCISABLE FOR STOC K, PURPORTEDLY CREATED OR ISSUED AS A RESUL T OF A 30
DEFECTIVE CORPORATE ACT, INCLUDING STOCK REIS SUED UPON EXERCISE O F 31
RIGHTS, OPTIONS, WARRANTS, OR OTHER SECURITIES CONVERTIBLE INTO OR 32
EXERCISABLE FOR STOC K: 33 6 HOUSE BILL 996
(1) PURPORTEDLY CREATED O R ISSUED AS A RESULT OF A 1
DEFECTIVE CORPORATE ACT, THAT BUT FOR THE FAI LURE OF AUTHORIZATIO N 2
WOULD CONSTITUTE VAL ID STOCK; AND 3
(2) THAT CANNOT BE DETERM INED BY THE BOARD OF DIRECTORS TO 4
BE VALID STOCK. 5
(G) (H) “VALID STOCK ” MEANS STOCK THAT HAS BEEN DULY 6
AUTHORIZED AND VALID LY ISSUED IN ACCORDA NCE WITH THE PROVISI ONS OF THIS 7
TITLE. 8
2–702. 9
(A) THE BOARD OF DIRECTOR S OF A CORPORATION M AY RATIFY A 10
DEFECTIVE CORPORATE ACT BY ADOPTING A RE SOLUTION STATING : 11
(1) (I) THE DEFECTIVE CORPORA TE ACT TO BE RATIFIE D; AND 12
(II) IF THE DEFECTIVE CORPOR ATE ACT INVOLVED THE 13
ISSUANCE OF PUTATIVE STOCK, THE NUMBER OF SHARES AND THE CLASS OR SER IES 14
OF PUTATIVE STOCK IS SUED; 15
(2) THE DATE OF THE DEFEC TIVE CORPORATE ACT ; 16
(3) THE NATURE OF THE FAI LURE OF AUTHORIZATIO N OF THE 17
DEFECTIVE C ORPORATE ACT ; AND 18
(4) (I) IF THE BOARD OF DIREC TORS COULD HAVE AUTH ORIZED OR 19
APPROVED THE DEFECTIVE CORPOR ATE ACT WITHOUT STOC KHOLDER ACTION 20
APPROVAL AT THE DATE OF THE DEFECTIVE CORPOR ATE ACT AND STOCKHOLDER 21
ACTION IS NOT REQUIR ED AS OF THE DATE OF RATIFICATION, THAT THE BOARD OF 22
DIRECTORS RATIFIES T HE DEFECTIVE CORPORA TE ACT; OR 23
(II) IF STOCKHOLDER APPROVAL IS REQUIRED AT THE T IME OF 24
RATIFICATION OR IF THE BOARD OF DIRECTO RS COULD NOT HAVE AU THORIZED OR 25
APPROVED THE DEFECTIVE CORPOR ATE ACT WITHOUT STOCKHOLDER ACTION 26
APPROVAL AT THE DATE OF THE D EFECTIVE CORPORATE A CT OR STOCKHOLDER 27
ACTION IS REQUIRED A S OF THE DATE OF RAT IFICATION, THAT THE BOARD OF 28
DIRECTORS SUBMITS DIRECTS THAT THE RATIFICATION BE SUBMITTED FOR 29
CONSIDERATION AT A M EETING OF THE STOCKHOLDERS . 30
(B) IF A RATIFICATION IS SUBMITTED FOR CONSID ERATION AT A MEETING 31
OF THE STOCKHOLDERS UNDER SUBSECTION (A)(4)(II) OF THIS SECTION , THE 32 HOUSE BILL 996 7
STOCKHOLDERS MAY RAT IFY THE DEFECTIVE CO RPORATE ACT BY ADOPT ING A 1
RESOLUTION STATING : 2
(1) (I) THE DEFECTIVE CORPORATE ACT TO BE RATIFIED; AND 3
(II) IF THE DEFECTIVE CORP ORATE ACT INVOLVED T HE 4
ISSUANCE OF PUTATIVE STOCK, THE NUMBER OF SHARES AND THE CLASS OR SER IES 5
OF PUTATIVE STOCK IS SUED; 6
(2) THE DATE OF THE DEFEC TIVE CORPORATE ACT ; AND 7
(3) THAT THE STOCKHOLDERS RAT IFY THE DEFECTIVE CO RPORATE 8
ACT. 9
(C) (1) THE QUORUM AND VOTING REQUIREMENTS APPLICA BLE TO 10
RATIFICATION UNDER T HIS SECTION SHALL BE THE APPROVAL STANDAR D 11
REQUIRING THE GREATE R OF PORTION OF VOTES UND ER: 12
(I) THE REQUIREMENTS THAT WOULD BE APPLICABLE TO THE 13
DEFECTIVE CORPORATE ACT PROPOSED TO BE R ATIFIED AT THE TIME OF 14
RATIFICATION; OR 15
(II) THE REQUIREMENTS THAT WOULD HAVE BEEN APPL ICABLE 16
TO THE DEFECTIVE COR PORATE ACT ON THE DA TE OF THE DEFECTIVE CORPORATE 17
ACT. 18
(2) (I) UNLESS OTHERWISE REQU IRED BY THE CHARTER OR 19
BYLAWS OF A CORPORAT ION THEN IN EFFECT OR IN EFFECT AT THE TIM E OF A 20
DEFECTIVE CORPORATE ACT, IF THE DEFECTIVE COR PORATE ACT IS THE EL ECTION 21
OF A DIRECTOR , RATIFICATION OF THE DEFECTIVE CORPORATE ACT SHALL 22
REQUIRE A MAJORITY OF THE VOTES CAST AT A MEET ING AT WHICH A QUORU M IS 23
PRESENT. 24
(II) THE PRESENCE OR APPRO VAL OF HOLDERS OF ST OCK OF 25
ANY CLASS OR SERIES OF WHICH NO STOCK IS THEN OUTSTANDING OR OF ANY 26
PERSON THAT IS NO LO NGER A STOCKHOLDER M AY NOT BE REQUIRE D. 27
(3) HOLDERS OF PUTATIVE S TOCK ON THE RECORD D ATE FOR 28
DETERMINING WHICH ST OCKHOLDERS ARE ENTIT LED TO VOTE ON A RAT IFICATION 29
SUBMITTED TO STOCKHO LDERS UNDER THIS SEC TION SHALL NOT BE EN TITLED TO 30
VOTE OR BE COUNTED F OR QUORUM PURPOSES I N ANY VOTE TO CO NSIDER 31
RATIFICATION. 32
8 HOUSE BILL 996
(D) RATIFICATION OF A DEF ECTIVE CORPORATE ACT UNDER THIS SECTION 1
SHALL MAKE THE RATIF IED DEFECTIVE CORPOR ATE ACT BINDING ON T HE 2
CORPORATION IN ACCOR DANCE WITH § 2–703 OF THIS SUBTITLE . 3
2–703. 4
(A) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 5
RATIFICATION OF A DE FECTIVE CORPORATE AC T BECOMES EFFECTIVE ON THE 6
DATE THAT THE BOARD OF DIRECTORS ADOPTS A RESOLUTION UNDER § 2–702(A) 7
OF THIS SUBTITLE OR , IF REQUIRED BY THIS SUBTITLE, THE DATE THAT 8
STOCKHOLDERS ADOPT A RESOLUTION UNDER § 2–702(B) OF THIS SUBTITLE. 9
(2) IF THE DEFECTIVE CORP ORATE ACT WOULD HAVE REQUIRED A 10
FILING WITH THE DEPARTMENT , RATIFICATION OF THE DEFECTIVE CORPORATE 11
ACT BECOMES EFFECTIV E ON THE LATER OF : 12
(I) THE DATE THAT ARTICLE S OF VALIDATION FIL ED IN 13
ACCORDANCE WITH § 2–705 OF THIS SUBTITLE ARE ACCEPTED FOR RECORD BY THE 14
DEPARTMENT ; OR 15
(II) THE DATE ESTABLISHED IN THE ARTICLES OF V ALIDATION, 16
NOT TO EXCEED 30 DAYS AFTER THE ARTIC LES ARE ACCEPTED FOR RECORD. 17
(B) A DEFECTIVE CORPORATE ACT RATIFIED IN ACCORDAN CE WITH THIS 18
SUBTITLE SHALL NOT B E VOID OR VOIDABLE A S A RESULT OF THE FA ILURE OF 19
AUTHORIZATION IDENTI FIED BY THE BOARD OF DIRECTORS IN A STATE MENT UNDER 20
§ 2–702(A). BEGINNING AT THE TIME RATIFICATION IS EFFE CTIVE AND WITHOUT 21
REGARD TO THE 120–DAY PERIOD DURING WH ICH A CLAIM MAY BE B ROUGHT UNDER 22
§ 2–707(B) OF THIS SUBTITLE: 23
(1) A DEFECTIVE CORPORATE ACT RATIFIED IN ACCO RDANCE WITH 24
THIS SUBTITLE IS NOT VOID OR VOIDABLE AS A RESULT OF THE FAIL URE OF 25
AUTHORIZATION IDENTI FIED IN A BOARD A CTION UNDER § 2–702(A) OF THIS 26
SUBTITLE AND SHALL B E DEEMED A VALID COR PORATE ACT EFFECTIVE AS OF THE 27
DATE OF THE DEFECTIV E CORPORATE ACT ; 28
(2) THE ISSUANCE OF PUTAT IVE STOCK PURPORTEDL Y ISSUED 29
PURSUANT TO A DEFECT IVE CORPORATE ACT ID ENTIFIED IN A BOARD ACTION 30
UNDER § 2–702(A) IS NOT VOID OR VOIDA BLE AND SHALL BE DEE MED VALID STOCK 31
AS OF THE TIME IT WA S PURPORTEDLY ISSUED ; AND 32
(3) ANY CORPORATE ACT TAK EN AFTER A DEFECTIVE CORPORATE 33
ACT RATIFIED IN ACCO RDANCE WITH THIS SUB TITLE IN RELIANCE ON THE 34
DEFECTIVE CORPORATE ACT H AVING BEEN VALIDLY E FFECTED, AND ANY 35 HOUSE BILL 996 9
SUBSEQUENT DEFECTIVE CORPORATE ACT RESULT ING FROM THE ORIGINA L 1
DEFECTIVE CORPORATE ACT, SHALL BE VALID AS OF THE TIME THE ACT WAS TAKEN. 2
2–704. 3
(A) IF RATIFICATION OF A DEFECTIVE CORPORATE ACT REQUIRES 4
APPROVAL BY STOCKHOL DERS, THE SECRETARY OF THE CORPORATION SHALL GI VE 5
NOTICE OF THE PROPOS ED RATIFICATION TO A LL STOCKHOLDERS ENTI TLED TO 6
NOTICE OF THE MEETIN G IN ACCORDANCE WITH § 2–504 OF THIS TITLE , 7
STOCKHOLDERS AS OF T HE DATE OF THE DEFEC TIVE CORPORATE ACT , AND 8
HOLDERS OF PUTATIVE STOCK AS OF THE DATE OF THE DEFECTIVE CORPOR ATE ACT 9
IN ACCORDANCE WITH § 2–504 OF THIS TITLE. 10
(B) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , IF 11
RATIFICATION OF A DE FECTIVE CORPORATE AC T DOES NOT REQUIRE A PPROVAL BY 12
STOCKHOLDERS , NOTICE TO STOCKHOLDERS OF THE RATIFICATION SHALL BE 13
DEEMED TO MAY BE GIVEN TO STOCKHOLDERS AS O F THE RATIFICATION A ND AS OF 14
THE DATE OF THE DEFE CTIVE CORPORATE ACT AND HOLDERS OF PUTATIVE STO CK 15
WHEN THE BOARD OF DI RECTORS ADOPTS A RES OLUTION IN ACCORDANC E WITH § 16
2–702(A) OF THIS SUBTITLE. 17
(2) IN THE CASE OF A CORP ORATION WITH A CLASS OF EQUITY 18
SECURITIES REGISTERE D UNDER THE SECURITIES EXCHANGE ACT OF 1934, 19
NOTICE TO STOCKHOLDERS OF A RATIFICATION THAT DOES NOT REQUIR E 20
APPROVAL OF STOCKHOL DERS SHALL BE DEEMED TO B E GIVEN WHEN THE 21
RATIFICATION HAS BEE N DISCLOSED IN A DOC UMENT PUBLICLY FILED WITH THE 22
SECURITIES AND EXCHANGE COMMISSION. 23
(C) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 24
THE NOTICE REQUIRED BY GIVEN TO HOLDERS OF PUTATIVE STOCK IN 25
ACCORDANCE WITH THIS SECTION SHALL B E PROVIDED TO: 26
(I) HOLDERS OF PUTATIVE S TOCK AS OF THE DATE OF THE 27
DEFECTIVE CORPORATE ACT; 28
(II) WHERE NOTICE IS REQUI RED UNDER SUBSECTION (A) OF 29
THIS SECTION, HOLDERS OF PUTATIVE STOCK AS OF THE RECO RD DATE OF THE 30
MEETING; AND 31
(III) WHERE NOTICE IS REQUIRED GIVEN UNDER SUBSECTION 32
(B) OF THIS SECTION, HOLDERS OF PUTATIVE STOCK AS OF THE DATE ON WHICH THE 33
BOARD OF DIRECTOR S ADOPTED A RESOLUTI ON RATIFYING THE DEF ECTIVE 34
CORPORATE ACT . 35
10 HOUSE BILL 996
(2) NOTICE IS NOT REQUIRE D TO BE GIVEN TO HOL DERS OF 1
PUTATIVE STOCK WHOSE IDENTITIES OR ADDRES SES CANNOT BE REASON ABLY 2
DETERMINED FROM THE RECORDS OF THE CORPO RATION. 3
2–705. 4
(A) (1) IF A DEFECTIVE CORPORATE ACT RATIFIED UNDER T HIS 5
SUBTITLE WOULD HAVE REQUIRED THE FILING OF A CHARTER DOCUMEN T WITH THE 6
DEPARTMENT UNDER ANY PROVISION OF THIS AR TICLE, THE CORPORATION SHAL L 7
FILE ARTICLES OF VAL IDATION IN ACCORDANC E WITH THIS SECTION . 8
(2) IF A CHARTER DOCUMENT T HAT WAS REQUIRED TO BE FILED 9
WITH RESPECT TO THE DEFECTIVE CORPORATE ACT WAS NOT FILED , THE ARTICLES 10
OF VALIDATION REQUIR ED BY THIS SECTION S HALL BE FILED IN LIE U OF THE 11
CHARTER DOCUMENT THA T WAS NOT FILED. 12
(B) THE ARTICLES OF VALID ATION REQUIRED BY THIS SECTION SHALL 13
INCLUDE: 14
(1) THE TITLE AND DATE OF FILING OF ANY CHARTER DOCUM ENT 15
PREVIOUSLY FILED WIT H RESPECT TO THE DEF ECTIVE CORPORATE ACT AND ANY 16
CHARTER DOCUMENT THA T AMENDED , SUPPLEMENTED , OR CORRECTED THAT 17
CHARTER DOCUMENT ; 18
(2) A STATEMENT DESCRIBING THE DEFECTIVE CORPOR ATE ACT; 19
(3) THE DATE OF THE DEFEC TIVE CORPORATE ACT ; 20
(4) A STATEMENT THAT THE D EFECTIVE CORPORATE A CT WAS 21
RATIFIED IN ACCORDAN CE WITH THIS SUBTITL E AND A DESCRIPTION OF THE 22
RATIFICATION; 23
(5) THE TIME THAT THE RATIFICAT ION IS TO BECOME EFF ECTIVE, 24
PROVIDED THAT THE TI ME IS NOT MORE THAN 30 DAYS AFTER THE ARTIC LES OF 25
VALIDATION ARE ACCEP TED FOR RECORD ; AND 26
(6) (I) A STATEMENT THAT A CHA RTER DOCUMENT WAS 27
PREVIOUSLY FILED WIT H RESPECT TO THE DEF ECTIVE CORPORATE ACT , AND NO 28
CHANGE TO THE CHARTE R DOCUMENT IS REQUIR ED; 29
(II) 1. A STATEMENT THAT A CHA RTER DOCUMENT WAS 30
PREVIOUSLY FILED WIT H RESPECT TO THE DEF ECTIVE CORPORATE ACT ; 31
HOUSE BILL 996 11
2. A STATEMENT DESCRIBING THE CHANGES BEING 1
MADE TO THE CHARTER DOCUMENT; AND 2
3. ANY OTHER INFORMATION REQUIRED BY THIS 3
ARTICLE; OR 4
(III) 1. A STATEMENT THAT A CHA RTER DOCUMENT WAS NO T 5
PREVIOUSLY FILED WIT H RESPECT TO THE DEF ECTIVE CORPORATE ACT AND THAT 6
A CHARTER DOCUMENT W AS REQUIRED TO BE FI LED; 7
2. A CITATION TO THE PROVISION OF THIS ARTICLE 8
UNDER WHICH THE CHAR TER DOCUMENT WAS REQ UIRED TO BE FILED ; AND 9
3. ANY OTHER INFORMATION REQUIRED BY THIS 10
ARTICLE. 11
2–706. 12
(A) UPON APPLICATION BY THE CORPORATION , ANY SUCCESSOR ENTITY TO 13
THE CORPORATION , ANY DIREC TOR OF THE CORPORATI ON, ANY RECORD OR 14
BENEFICIAL HOLDER OF VALID STOCK OR PUTAT IVE STOCK, ANY RECORD OR 15
BENEFICIAL HOLDER OF PUTATIVE STOCK AS OF THE DATE OF THE DEFE CTIVE 16
CORPORATE ACT , ANY HOLDER OF A VOTI NG TRUST CERTIFICATE , ANY HOLDER OF 17
A VOTING TRUS T CERTIFICATE AS OF THE DATE OF THE DEFE CTIVE CORPORATE 18
ACT, OR ANY OTHER PERSON OR ENTITY CLAIMING TO BE SUBST ANTIALLY AND 19
ADVERSELY AFFECTED B Y A RATIFICATION UND ER THIS SUBTITLE, A COURT MAY: 20
(1) DETERMINE THE VALIDIT Y OF ANY RATIFICATIO N UNDER THIS 21
SUBTITLE; OR 22
(2) MODIFY OR WAIVE ANY O F THE PROCEDURES REQ UIRED BY THIS 23
SUBTITLE TO RATIFY A DEFECTIVE CORPORATE ACT. 24
(B) AN ACTION UNDER THIS SECTION SHALL BE BRO UGHT WITHIN 120 DAYS 25
AFTER: 26
(1) IF THE RATIFICATION W AS APPROVED BY STOCK HOLDERS, THE 27
DATE ON WHICH RATIFI CATION OCCURRED ; OR 28
(2) IF NOTICE WAS GIVEN O R DEEMED GIVEN WITHI N 60 DAYS AFTER 29
THE RATIFICATION , THE DATE ON WHICH NO TICE WAS GIVEN OR DE EMED GIVEN TO 30
STOCKHOLDERS AND ANY HOLDERS OF P UTATIVE STOCK IN ACCORDANCE WITH 31
THIS SUBTITLE. 32
12 HOUSE BILL 996
2–707. 1
(A) NOTHING IN THIS SUBTI TLE MAY BE CONSTRUED TO REQUIRE THAT 2
RATIFICATION OF A DE FECTIVE CORPORATE AC T UNDER THIS SUBTITL E BE THE 3
EXCLUSIVE MEANS OF RATIFYING OR VALIDATING A DEFECTI VE CORPORATE ACT OR 4
TO LIMIT THE ABILITY OF A CORPORATION TO FILE CERTIFICATES OR CHARTER 5
DOCUMENTS IN ACCORDA NCE WITH ANY OTHER P ROVISION OF THIS ART ICLE. 6
(B) THE ABSENCE OR FAILUR E OF RATIFICATION IN ACCORDANCE WITH 7
THIS SUBTITLE SHALL NOT, OF ITSELF, AFFECT THE VALIDITY OR EFFECTIVENESS 8
OF ANY CORPORATE ACT OTHERWISE LAWFULLY RA TIFIED, NOR MAY IT CREATE A 9
PRESUMPTION THAT ANY CORPORATE ACT IS OR WAS A DEFECTIVE CORP ORATE ACT 10
OR VOID OR VOIDABLE . 11
8–601.1. 12
Sections 2–113, 2–201(c), 2–309(a) and (e), 2–313, 2–502(e), 2–503(b), [and] 2–504(f), 13
AND 2–701 THROUGH 2–707 of this article and, except as otherwise provided in § 8–601 14
of this subtitle or in the declaration of trust, § 2–405.1 of this article shall apply to real 15
estate investment trusts. 16
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 17
October 1, 2022. 18
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.