MD
Maryland House Bill HB999

Maryland 2022 Regular Session

Maryland House Bill HB999 Compare Versions

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1- LAWRENCE J. HOGAN, JR., Governor Ch. 292
21
3-– 1 –
4-Chapter 292
5-(House Bill 999)
62
7-AN ACT concerning
3+EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4+ [Brackets] indicate matter deleted from existing law.
5+ Underlining indicates amendments to bill.
6+ Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7+amendment.
8+ *hb0999*
89
9-Corporations and Associations – Revisions
10+HOUSE BILL 999
11+C1 2lr1800
12+ CF SB 431
13+By: Delegate Brooks
14+Introduced and read first time: February 10, 2022
15+Assigned to: Economic Matters
16+Committee Report: Favorable
17+House action: Adopted
18+Read second time: February 26, 2022
1019
11-FOR the purpose of revising laws relating to the formation, organization, and operation of
12-corporations; repealing certain redundant and obsolete provisions; correcting certain
13-references; authorizing a certain dissent to be submitted by electronic transmission;
14-adding limited liability companies to the list of entity types that certain persons may
15-serve in certain capacities and be eligible for insurance provided by certain other
16-corporations; clarifying certain procedures relating to the abandonment of certain
17-proposed consolidations, mergers, or share exchanges; allowing a corporation to
18-dissolve, subject to a certain limitation, at the time established under the articles of
19-dissolution; and generally relating to corporations and associations.
20+CHAPTER ______
2021
21-BY repealing and reenacting, with amendments,
22- Article – Corporations and Associations
23-Section 1–101(f)(1)(iv) and (p)(1) and (4), 2–103(1), 2–104(b)(9) and (10), 2–208(a)(2),
24-2–208.1(a)(2), 2–410, 2–411(a)(2), 2–418(k)(1), 2–503(b) and (c), 2–509(b),
25-2–606.1(a), 3–105(a), 3–106.1(e)(1), 3–108(a) and (b), 3–109(b)(8), 3–408(a),
26-and 8–501(h)(1)
27- Annotated Code of Maryland
28- (2014 Replacement Volume and 2021 Supplement)
22+AN ACT concerning 1
2923
30-BY adding to
31- Article – Corporations and Associations
32-Section 2–104(b)(11)
33- Annotated Code of Maryland
34- (2014 Replacement Volume and 2021 Supplement)
24+Corporations and Associations – Revisions 2
3525
36-BY repealing
37- Article – Corporations and Associations
38-Section 2–502.1
39- Annotated Code of Maryland
40- (2014 Replacement Volume and 2021 Supplement)
26+FOR the purpose of revising laws relating to the formation, organization, and operation of 3
27+corporations; repealing certain redundant and obsolete provisions; correcting certain 4
28+references; authorizing a certain dissent to be submitted by electronic transmission; 5
29+adding limited liability companies to the list of entity types that certain persons may 6
30+serve in certain capacities and be eligible for insurance provided by certain other 7
31+corporations; clarifying certain procedures relating to the abandonment of certain 8
32+proposed consolidations, mergers, or share exchanges; allowing a corporation to 9
33+dissolve, subject to a certain limitation, at the time established under the articles of 10
34+dissolution; and generally relating to corporations and associations. 11
4135
42- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
43-That the Laws of Maryland read as follows:
36+BY repealing and reenacting, with amendments, 12
37+ Article – Corporations and Associations 13
38+Section 1–101(f)(1)(iv) and (p)(1) and (4), 2–103(1), 2–104(b)(9) and (10), 2–208(a)(2), 14
39+2–208.1(a)(2), 2–410, 2–411(a)(2), 2–418(k)(1), 2–503(b) and (c), 2–509(b), 15
40+2–606.1(a), 3–105(a), 3–106.1(e)(1), 3–108(a) and (b), 3–109(b)(8), 3–408(a), 16
41+and 8–501(h)(1) 17
42+ Annotated Code of Maryland 18
43+ (2014 Replacement Volume and 2021 Supplement) 19
4444
45-Article – Corporations and Associations
45+BY adding to 20
46+ Article – Corporations and Associations 21
47+Section 2–104(b)(11) 22
48+ Annotated Code of Maryland 23 2 HOUSE BILL 999
4649
47-1–101.
4850
49- (f) (1) “Charter” includes: Ch. 292 2022 LAWS OF MARYLAND
51+ (2014 Replacement Volume and 2021 Supplement) 1
5052
51-– 2 –
53+BY repealing 2
54+ Article – Corporations and Associations 3
55+Section 2–502.1 4
56+ Annotated Code of Maryland 5
57+ (2014 Replacement Volume and 2021 Supplement) 6
5258
53- (iv) Articles of restatement[, if approved as described in § 2–609 of
54-this article];
59+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 7
60+That the Laws of Maryland read as follows: 8
5561
56- (p) “Governing document” means:
62+Article – Corporations and Associations 9
5763
58- (1) The [articles or certificate of incorporation] CHARTER and the bylaws
59-of a Maryland corporation or a foreign corporation;
64+1–101. 10
6065
61- (4) The declaration of trust or governing instrument of a business trust OR
62-A REAL ESTATE INVEST MENT TRUST ; or
66+ (f) (1) “Charter” includes: 11
6367
64-2–103.
68+ (iv) Articles of restatement[, if approved as described in § 2–609 of 12
69+this article]; 13
6570
66- Unless otherwise provided by law or its charter, a Maryland corporation has the
67-general powers, whether or not they are set forth in its charter, to:
71+ (p) “Governing document” means: 14
6872
69- (1) Have perpetual existence[, although existence may be limited to a
70-specified period if the limitation is stated in a charter provision adopted after May 31,
71-1908];
73+ (1) The [articles or certificate of incorporation] CHARTER and the bylaws 15
74+of a Maryland corporation or a foreign corporation; 16
7275
73-2–104.
76+ (4) The declaration of trust or governing instrument of a business trust OR 17
77+A REAL ESTATE INVEST MENT TRUST ; or 18
7478
75- (b) The articles of incorporation may include:
79+2–103. 19
7680
77- (9) A provision that allows the board of directors, in considering a potential
78-acquisition of control of the corporation, to consider the effect of the potential acquisition of
79-control on:
81+ Unless otherwise provided by law or its charter, a Maryland corporation has the 20
82+general powers, whether or not they are set forth in its charter, to: 21
8083
81- (i) Stockholders, employees, suppliers, customers, and creditors of
82-the corporation; and
84+ (1) Have perpetual existence[, although existence may be limited to a 22
85+specified period if the limitation is stated in a charter provision adopted after May 31, 23
86+1908]; 24
8387
84- (ii) Communities in which offices or other establishments of the
85-corporation are located; [and]
88+2–104. 25
8689
87- (10) A provision that contains a future effective date for the articles of
88-incorporation that is not later than 30 days after the articles are accepted by the
89-Department for record; AND
90+ (b) The articles of incorporation may include: 26
9091
91- (11) IF ADOPTED AFTER MAY 31, 1908, A PROVISION STATING THAT:
92+ (9) A provision that allows the board of directors, in considering a potential 27
93+acquisition of control of the corporation, to consider the effect of the potential acquisition of 28
94+control on: 29
95+ HOUSE BILL 999 3
9296
93- (I) THE EXISTENCE OF THE CORPORATION IS LIMIT ED TO A
94-SPECIFIC PERIOD; OR
95- LAWRENCE J. HOGAN, JR., Governor Ch. 292
9697
97-– 3 –
98- (II) THE EXISTENCE OF THE CORPORATION SHALL BE LIMITED
99-TO A SPECIFIC PERIOD THAT SHALL BE CONTIN UED, EXTENDED, OR TERMINATED ON
100-THE OCCURRENCE OF AN EVENT, AN ACTION, OR A DETERMINATION S ET FORTH IN
101-THE CHARTER .
98+ (i) Stockholders, employees, suppliers, customers, and creditors of 1
99+the corporation; and 2
102100
103-2–208.
101+ (ii) Communities in which offices or other establishments of the 3
102+corporation are located; [and] 4
104103
105- (a) (2) The [board] CORPORATION may not issue any of the stock that is
106-classified or reclassified prior to the time the articles supplementary are effective, as
107-provided in this section.
104+ (10) A provision that contains a future effective date for the articles of 5
105+incorporation that is not later than 30 days after the articles are accepted by the 6
106+Department for record; AND 7
108107
109-2–208.1.
108+ (11) IF ADOPTED AFTER MAY 31, 1908, A PROVISION STATING THAT: 8
110109
111- (a) (2) The [board] CORPORATION may not issue any of the newly authorized
112-stock prior to the time the articles supplementary are effective, as provided in this section.
110+ (I) THE EXISTENCE OF THE CORPORATION IS LIMIT ED TO A 9
111+SPECIFIC PERIOD ; OR 10
113112
114-2–410.
113+ (II) THE EXISTENCE OF THE CORPORATION SHALL BE LIMITED 11
114+TO A SPECIFIC PERIOD THAT SHALL BE CONTIN UED, EXTENDED, OR TERMINATED ON 12
115+THE OCCURRENCE OF AN EVENT, AN ACTION, OR A DETERMINATION S ET FORTH IN 13
116+THE CHARTER . 14
115117
116- (a) A director of a corporation who is present at a meeting of its board of directors
117-at which action on any corporate matter is taken is presumed to have assented to the action
118-unless:
118+2–208. 15
119119
120- (1) [He] THE DIRECTOR announces [his] THE DIRECTOR ’S dissent at the
121-meeting; and
120+ (a) (2) The [board] CORPORATION may not issue any of the stock that is 16
121+classified or reclassified prior to the time the articles supplementary are effective, as 17
122+provided in this section. 18
122123
123- (2) (i) [His] THE dissent is entered in the minutes of the meeting;
124+2–208.1. 19
124125
125- (ii) [He] THE DIRECTOR files [his written] THE dissent to the
126-action IN WRITING with OR BY ELECTRONIC TRA NSMISSION TO the secretary of the
127-meeting before the meeting is adjourned; or
126+ (a) (2) The [board] CORPORATION may not issue any of the newly authorized 20
127+stock prior to the time the articles supplementary are effective, as provided in this section. 21
128128
129- (iii) [He] THE DIRECTOR forwards [his written] THE dissent within
130-24 hours after the meeting is adjourned[,] TO THE SECRETARY OF THE MEETING OR THE
131-SECRETARY OF THE COR PORATION by [certified]:
129+2–410. 22
132130
133- 1. CERTIFIED mail, return receipt requested, bearing a
134-postmark from the United States Postal Service[, to the secretary of the meeting or the
135-secretary of the corporation]; OR
131+ (a) A director of a corporation who is present at a meeting of its board of directors 23
132+at which action on any corporate matter is taken is presumed to have assented to the action 24
133+unless: 25
136134
137- 2. ELECTRONIC TRANSMISSI ON.
135+ (1) [He] THE DIRECTOR announces [his] THE DIRECTOR ’S dissent at the 26
136+meeting; and 27
138137
139- (b) The right to dissent does not apply to a director who:
138+ (2) (i) [His] THE dissent is entered in the minutes of the meeting; 28
140139
141- (1) Voted in favor of the action; or
142- Ch. 292 2022 LAWS OF MARYLAND
140+ (ii) [He] THE DIRECTOR files [his written] THE dissent to the 29
141+action IN WRITING with OR BY ELECTRONIC TRA NSMISSION TO the secretary of the 30
142+meeting before the meeting is adjourned; or 31
143+ 4 HOUSE BILL 999
143144
144-– 4 –
145- (2) Failed to make [his] THE DIRECTOR ’S dissent known at the meeting.
146145
147-2–411.
146+ (iii) [He] THE DIRECTOR forwards [his written] THE dissent within 1
147+24 hours after the meeting is adjourned[,] TO THE SECRETARY OF THE MEETING OR THE 2
148+SECRETARY OF THE COR PORATION by [certified]: 3
148149
149- (a) The board of directors of a corporation may:
150+ 1. CERTIFIED mail, return receipt requested, bearing a 4
151+postmark from the United States Postal Service[, to the secretary of the meeting or the 5
152+secretary of the corporation]; OR 6
150153
151- (2) Delegate to these committees any of the powers of the board of directors,
152-except the power to:
154+ 2. ELECTRONIC TRANSMISSI ON. 7
153155
154- (i) [Issue] AUTHORIZE THE ISSUANC E OF stock other than as
155-provided in subsection (b) of this section;
156+ (b) The right to dissent does not apply to a director who: 8
156157
157- (ii) Recommend to the stockholders any action which requires
158-stockholder approval, other than the election of directors;
158+ (1) Voted in favor of the action; or 9
159159
160- (iii) Amend the bylaws; or
160+ (2) Failed to make [his] THE DIRECTOR ’S dissent known at the meeting. 10
161161
162- (iv) Approve any merger or share exchange which does not require
163-stockholder approval.
162+2–411. 11
164163
165-2–418.
164+ (a) The board of directors of a corporation may: 12
166165
167- (k) (1) A corporation may purchase and maintain insurance on behalf of any
168-person who is or was a director, officer, employee, or agent of the corporation, or who, while
169-a director, officer, employee, or agent of the corporation, is or was serving at the request of
170-the corporation as a director, officer, partner, trustee, employee, or agent of another foreign
171-or domestic corporation, partnership, joint venture, trust, LIMITED LIABILITY CO MPANY,
172-other enterprise, or employee benefit plan against any liability asserted against and
173-incurred by such person in any such capacity or arising out of such person’s position,
174-whether or not the corporation would have the power to indemnify against liability under
175-the provisions of this section.
166+ (2) Delegate to these committees any of the powers of the board of directors, 13
167+except the power to: 14
176168
177-[2–502.1.
169+ (i) [Issue] AUTHORIZE THE ISSUANC E OF stock other than as 15
170+provided in subsection (b) of this section; 16
178171
179- (a) Unless restricted by the charter or bylaws of the corporation, a corporation
180-may allow stockholders to participate in a meeting by means of a conference telephone or
181-other communications equipment if all persons participating in the meeting can read or
182-hear the proceedings of the meeting substantially concurrently with the proceedings.
172+ (ii) Recommend to the stockholders any action which requires 17
173+stockholder approval, other than the election of directors; 18
183174
184- (b) Participation in a meeting by the means authorized by subsection (a) of this
185-section constitutes presence in person at the meeting.]
175+ (iii) Amend the bylaws; or 19
186176
187-2–503.
177+ (iv) Approve any merger or share exchange which does not require 20
178+stockholder approval. 21
188179
189- (b) If the board of directors is authorized to determine the place of a meeting of
190-the stockholders, the board OF DIRECTORS may determine that the meeting not be held at LAWRENCE J. HOGAN, JR., Governor Ch. 292
180+2–418. 22
191181
192-– 5 –
193-any place, but instead may be held partially or solely by [means of] remote communication,
194-as authorized by subsection (c) of this section.
182+ (k) (1) A corporation may purchase and maintain insurance on behalf of any 23
183+person who is or was a director, officer, employee, or agent of the corporation, or who, while 24
184+a director, officer, employee, or agent of the corporation, is or was serving at the request of 25
185+the corporation as a director, officer, partner, trustee, employee, or agent of another foreign 26
186+or domestic corporation, partnership, joint venture, trust, LIMITED LIABILITY CO MPANY, 27
187+other enterprise, or employee benefit plan against any liability asserted against and 28
188+incurred by such person in any such capacity or arising out of such person’s position, 29
189+whether or not the corporation would have the power to indemnify against liability under 30
190+the provisions of this section. 31
191+ HOUSE BILL 999 5
195192
196- (c) If authorized by the board of directors and subject to any guidelines and
197-procedures that the board adopts, stockholders and proxy holders not physically present at
198-[a] THE meeting of the stockholders, MAY, by [means of] remote communication:
199193
200- (1) [May participate] PARTICIPATE in the meeting of the stockholders;
201-and
194+[2–502.1. 1
202195
203- (2) [May be] BE considered present in person and may vote at the meeting
204-of the stockholders, whether the meeting is held at a designated place or solely by [means
205-of] remote communication, if:
196+ (a) Unless restricted by the charter or bylaws of the corporation, a corporation 2
197+may allow stockholders to participate in a meeting by means of a conference telephone or 3
198+other communications equipment if all persons participating in the meeting can read or 4
199+hear the proceedings of the meeting substantially concurrently with the proceedings. 5
206200
207- (i) The corporation implements reasonable measures to verify that
208-each person considered present and authorized to vote at the meeting by [means of] remote
209-communication is a stockholder or proxy holder;
201+ (b) Participation in a meeting by the means authorized by subsection (a) of this 6
202+section constitutes presence in person at the meeting.] 7
210203
211- (ii) The corporation implements reasonable measures to provide the
212-stockholders and proxy holders a reasonable opportunity to participate in the meeting and
213-to vote on matters submitted to the stockholders, including an opportunity to read or hear
214-the proceedings of the meeting substantially concurrently with the proceedings; and
204+2–503. 8
215205
216- (iii) In the event any stockholder or proxy holder votes or takes other
217-action at the meeting by [means of] remote communication, a record of the vote or other
218-action is maintained by the corporation.
206+ (b) If the board of directors is authorized to determine the place of a meeting of 9
207+the stockholders, the board OF DIRECTORS may determine that the meeting not be held at 10
208+any place, but instead may be held partially or solely by [means of] remote communication, 11
209+as authorized by subsection (c) of this section. 12
219210
220-2–509.
211+ (c) If authorized by the board of directors and subject to any guidelines and 13
212+procedures that the board adopts, stockholders and proxy holders not physically present at 14
213+[a] THE meeting of the stockholders, MAY, by [means of] remote communication: 15
221214
222- (b) (1) Shares of a corporation’s own stock owned directly or indirectly by it
223-may not be voted at any meeting and may not be counted in determining the total number
224-of outstanding shares entitled to be voted at any given time unless they are held by it in a
225-fiduciary capacity, in which case they may be voted and shall be counted in determining
226-the total number of outstanding shares at any given time.
215+ (1) [May participate] PARTICIPATE in the meeting of the stockholders; 16
216+and 17
227217
228- (2) Shares of its own stock are considered owned indirectly by the
229-corporation if owned by another corporation OR ENTITY in which the corporation owns
230-shares OR INTERESTS entitled to cast a majority of all the votes entitled to be cast by
231-HOLDERS OF all shares OR INTERESTS outstanding and entitled to vote.
218+ (2) [May be] BE considered present in person and may vote at the meeting 18
219+of the stockholders, whether the meeting is held at a designated place or solely by [means 19
220+of] remote communication, if: 20
232221
233-2–606.1.
222+ (i) The corporation implements reasonable measures to verify that 21
223+each person considered present and authorized to vote at the meeting by [means of] remote 22
224+communication is a stockholder or proxy holder; 23
234225
235- (a) A [board] CORPORATION may not issue any of the stock that is classified,
236-reclassified, or newly authorized by an amendment before the time the amendment is
237-effective, as provided in § 2–610.1 of this subtitle. Ch. 292 2022 LAWS OF MARYLAND
226+ (ii) The corporation implements reasonable measures to provide the 24
227+stockholders and proxy holders a reasonable opportunity to participate in the meeting and 25
228+to vote on matters submitted to the stockholders, including an opportunity to read or hear 26
229+the proceedings of the meeting substantially concurrently with the proceedings; and 27
238230
239-– 6 –
231+ (iii) In the event any stockholder or proxy holder votes or takes other 28
232+action at the meeting by [means of] remote communication, a record of the vote or other 29
233+action is maintained by the corporation. 30
240234
241-3–105.
235+2–509. 31
242236
243- (a) A consolidation, merger, share exchange, or transfer of assets shall be
244-approved in the manner provided by this section, except that:
237+ (b) (1) Shares of a corporation’s own stock owned directly or indirectly by it 32
238+may not be voted at any meeting and may not be counted in determining the total number 33
239+of outstanding shares entitled to be voted at any given time unless they are held by it in a 34 6 HOUSE BILL 999
245240
246- (1) A merger of a 90% or more owned subsidiary with or into its parent
247-need be approved only in accordance with the provisions of § 3–106 of this subtitle;
248241
249- (2) A merger of a Maryland corporation in accordance with § 3–106.1 of this
250-subtitle need be approved only in the manner provided in § 3–106.1 of this subtitle;
242+fiduciary capacity, in which case they may be voted and shall be counted in determining 1
243+the total number of outstanding shares at any given time. 2
251244
252- (3) A MERGER OF A MARYLAND CORPORATION IN ACCORDANCE WITH
253-§ 3–106.2 OF THIS SUBTITLE NEE D ONLY BE APPROVED IN THE MANNER PROVIDED
254-IN § 3–106.2 OF THIS SUBTITLE;
245+ (2) Shares of its own stock are considered owned indirectly by the 3
246+corporation if owned by another corporation OR ENTITY in which the corporation owns 4
247+shares OR INTERESTS entitled to cast a majority of all the votes entitled to be cast by 5
248+HOLDERS OF all shares OR INTERESTS outstanding and entitled to vote. 6
255249
256- [(3)] (4) A share exchange need be approved by a Maryland successor only
257-by its board of directors and by any other action required by its charter;
250+2–606.1. 7
258251
259- [(4)] (5) A transfer of assets need be approved by a Maryland transferee
260-corporation only by its board of directors and by any other action required by its charter;
252+ (a) A [board] CORPORATION may not issue any of the stock that is classified, 8
253+reclassified, or newly authorized by an amendment before the time the amendment is 9
254+effective, as provided in § 2–610.1 of this subtitle. 10
261255
262- [(5)] (6) A foreign corporation party to the transaction shall have the
263-transaction advised, authorized, and approved in the manner and by the vote required by
264-its charter and the laws of the place where it is organized;
256+3–105. 11
265257
266- [(6)] (7) A merger need be approved by a Maryland successor corporation
267-only by a majority of its entire board of directors if:
258+ (a) A consolidation, merger, share exchange, or transfer of assets shall be 12
259+approved in the manner provided by this section, except that: 13
268260
269- (i) The merger does not reclassify or change the terms of any class
270-or series of its stock that is outstanding immediately before the merger becomes effective
271-or otherwise amend its charter and the number of its shares of stock of such class or series
272-outstanding immediately after the effective time of the merger does not increase by more
273-than 20% of the number of its shares of the class or series of stock that is outstanding
274-immediately before the merger becomes effective; or
261+ (1) A merger of a 90% or more owned subsidiary with or into its parent 14
262+need be approved only in accordance with the provisions of § 3–106 of this subtitle; 15
275263
276- (ii) There is no stock outstanding or subscribed for and entitled to be
277-voted on the merger;
264+ (2) A merger of a Maryland corporation in accordance with § 3–106.1 of this 16
265+subtitle need be approved only in the manner provided in § 3–106.1 of this subtitle; 17
278266
279- [(7)] (8) A business trust party to a merger shall have the merger advised,
280-authorized, and approved in the manner and by the vote required by its declaration of trust
281-and the laws of the place where it is organized; and
267+ (3) A MERGER OF A MARYLAND CORPORATION IN ACCORDANCE WITH 18
268+§ 3–106.2 OF THIS SUBTITLE NEE D ONLY BE APPROVED IN THE MANN ER PROVIDED 19
269+IN § 3–106.2 OF THIS SUBTITLE; 20
282270
283- [(8)] (9) A consolidation, merger, or share exchange shall be approved by
284-a Maryland corporation registered as an open–end investment company under the LAWRENCE J. HOGAN, JR., Governor Ch. 292
271+ [(3)] (4) A share exchange need be approved by a Maryland successor only 21
272+by its board of directors and by any other action required by its charter; 22
285273
286-– 7 –
287-Investment Company Act of 1940 only by a majority of the entire board of directors and in
288-the manner and by the vote required under the Investment Company Act of 1940.
274+ [(4)] (5) A transfer of assets need be approved by a Maryland transferee 23
275+corporation only by its board of directors and by any other action required by its charter; 24
289276
290-3–106.1.
277+ [(5)] (6) A foreign corporation party to the transaction shall have the 25
278+transaction advised, authorized, and approved in the manner and by the vote required by 26
279+its charter and the laws of the place where it is organized; 27
291280
292- (e) (1) Unless waived by all stockholders who, except for the application of this
293-section, would be entitled to vote on the merger, at least 20 business days before the articles
294-are filed with the Department[,] an acquiring entity that owns less than all of the
295-outstanding shares of the subject corporation as of immediately before the effective time of
296-the merger must have given notice of the transaction to each of the subject corporation’s
297-stockholders of record who, except for the application of this section, would be entitled to
298-vote on the merger on the date that notice is given or on a record date fixed for that purpose
299-that is not more than 10 days before the date that notice is given.
281+ [(6)] (7) A merger need be approved by a Maryland successor corporation 28
282+only by a majority of its entire board of directors if: 29
300283
301-3–108.
284+ (i) The merger does not reclassify or change the terms of any class 30
285+or series of its stock that is outstanding immediately before the merger becomes effective 31
286+or otherwise amend its charter and the number of its shares of stock of such class or series 32
287+outstanding immediately after the effective time of the merger does not increase by more 33 HOUSE BILL 999 7
302288
303- (a) A proposed consolidation, merger, or share exchange may be abandoned before
304-the effective date of the articles:
305289
306- (1) If the articles so provide, by majority vote of the entire board of directors
307-of any one corporation party to the articles [or of], the entire board of trustees of any one
308-business trust party to the articles, OR THE GOVERNING BOD Y OF ANY OTHER ENTIT Y
309-PARTY TO THE ARTICLE S; or
290+than 20% of the number of its shares of the class or series of stock that is outstanding 1
291+immediately before the merger becomes effective; or 2
310292
311- (2) Unless the articles provide otherwise, by majority vote of the entire
312-board of directors of each Maryland corporation party to the articles [and of], the entire
313-board of trustees of each Maryland business trust party to the articles, AND THE
314-GOVERNING BODY OF EA CH OTHER MARYLAND ENTITY PARTY TO THE ARTICLES .
293+ (ii) There is no stock outstanding or subscribed for and entitled to be 3
294+voted on the merger; 4
315295
316- (b) If the articles have been filed with the Department, notice of the abandonment
317-shall be given promptly to the Department BY:
296+ [(7)] (8) A business trust party to a merger shall have the merger advised, 5
297+authorized, and approved in the manner and by the vote required by its declaration of trust 6
298+and the laws of the place where it is organized; and 7
318299
319- (1) IF ABANDONED PURSUANT TO SUBSECTION (A)(1) OF THIS
320-SECTION, ANY ONE PARTY TO THE ARTICLES; OR
300+ [(8)] (9) A consolidation, merger, or share exchange shall be approved by 8
301+a Maryland corporation registered as an open–end investment company under the 9
302+Investment Company Act of 1940 only by a majority of the entire board of directors and in 10
303+the manner and by the vote required under the Investment Company Act of 1940. 11
321304
322- (2) IF ABANDONED PURSUANT TO SUBSE CTION (A)(2) OF THIS
323-SECTION, EACH PARTY TO THE AR TICLES.
305+3–106.1. 12
324306
325-3–109.
307+ (e) (1) Unless waived by all stockholders who, except for the application of this 13
308+section, would be entitled to vote on the merger, at least 20 business days before the articles 14
309+are filed with the Department[,] an acquiring entity that owns less than all of the 15
310+outstanding shares of the subject corporation as of immediately before the effective time of 16
311+the merger must have given notice of the transaction to each of the subject corporation’s 17
312+stockholders of record who, except for the application of this section, would be entitled to 18
313+vote on the merger on the date that notice is given or on a record date fixed for that purpose 19
314+that is not more than 10 days before the date that notice is given. 20
326315
327- (b) Articles of consolidation, merger, or share exchange shall contain the terms
328-and conditions of the transaction and the manner of carrying it into effect, including:
316+3–108. 21
329317
330- (8) A statement that the terms and conditions of the transaction set forth
331-in the articles were advised, authorized, and approved by each corporation, partnership, Ch. 292 2022 LAWS OF MARYLAND
318+ (a) A proposed consolidation, merger, or share exchange may be abandoned before 22
319+the effective date of the articles: 23
332320
333-– 8 –
334-limited partnership, limited liability company, or business trust party to the articles in the
335-manner and by the vote required by its charter [or], declaration of trust, OR OTHER
336-GOVERNING DOCUMENT and the laws of the place where it is organized, and a statement
337-of the manner of approval; and
321+ (1) If the articles so provide, by majority vote of the entire board of directors 24
322+of any one corporation party to the articles [or of], the entire board of trustees of any one 25
323+business trust party to the articles, OR THE GOVERNING BOD Y OF ANY OTHER ENTIT Y 26
324+PARTY TO THE ARTICLES ; or 27
338325
339-3–408.
326+ (2) Unless the articles provide otherwise, by majority vote of the entire 28
327+board of directors of each Maryland corporation party to the articles [and of], the entire 29
328+board of trustees of each Maryland business trust party to the articles, AND THE 30
329+GOVERNING BODY OF EA CH OTHER MARYLAND ENTITY PARTY TO THE ARTICLES . 31
340330
341- (a) Except as provided in subsection (b) of this section, the corporation is dissolved
342-[when the Department accepts its articles of dissolution for record] ON THE LATER OF :
331+ (b) If the articles have been filed with the Department, notice of the abandonment 32
332+shall be given promptly to the Department BY: 33
343333
344- (1) THE TIME THE DEPARTMENT ACCEPTS TH E ARTICLES OF
345-DISSOLUTION FOR RECO RD; OR
334+ (1) IF ABANDONED PURSUANT TO SUBSECTION (A)(1) OF THIS 34
335+SECTION, ANY ONE PARTY TO THE ARTICLES; OR 35 8 HOUSE BILL 999
346336
347- (2) THE TIME ESTABLISHED UNDER THE ARTICLES , NOT TO EXCEED
348-30 DAYS AFTER THE ARTIC LES ARE ACCEPTED FOR RECORD.
349337
350-8–501.
351338
352- (h) (1) The [board of trustees] REAL ESTATE INVESTME NT TRUST may not
353-issue any of the shares that are classified, reclassified, or newly authorized by an
354-amendment to the declaration of trust before the time the amendment is filed with the
355-Department.
339+ (2) IF ABANDONED PURSUANT TO SUBSECTION (A)(2) OF THIS 1
340+SECTION, EACH PARTY TO THE AR TICLES. 2
356341
357- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
358-October 1, 2022.
342+3–109. 3
359343
360-Approved by the Governor, May 12, 2022.
344+ (b) Articles of consolidation, merger, or share exchange shall contain the terms 4
345+and conditions of the transaction and the manner of carrying it into effect, including: 5
346+
347+ (8) A statement that the terms and conditions of the transaction set forth 6
348+in the articles were advised, authorized, and approved by each corporation, partnership, 7
349+limited partnership, limited liability company, or business trust party to the articles in the 8
350+manner and by the vote required by its charter [or], declaration of trust, OR OTHER 9
351+GOVERNING D OCUMENT and the laws of the place where it is organized, and a statement 10
352+of the manner of approval; and 11
353+
354+3–408. 12
355+
356+ (a) Except as provided in subsection (b) of this section, the corporation is dissolved 13
357+[when the Department accepts its articles of dissolution for record] ON THE LATER OF : 14
358+
359+ (1) THE TIME THE DEPARTMENT ACCEPTS TH E ARTICLES OF 15
360+DISSOLUTION FOR RECO RD; OR 16
361+
362+ (2) THE TIME ESTABLISHED UNDER THE ARTICLES , NOT TO EXCEED 17
363+30 DAYS AFTER THE ARTIC LES ARE ACCEPTED FOR RECORD. 18
364+
365+8–501. 19
366+
367+ (h) (1) The [board of trustees] REAL ESTATE INVESTME NT TRUST may not 20
368+issue any of the shares that are classified, reclassified, or newly authorized by an 21
369+amendment to the declaration of trust before the time the amendment is filed with the 22
370+Department. 23
371+
372+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 24
373+October 1, 2022. 25
374+