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Statutes Text

Article - Corporations and Associations


    (a)    In this subtitle the following words have the meanings indicated.

    (b)    “Corporate act” means any act taken by or on behalf of a corporation by the board of directors, a committee of the board of directors, or the stockholders of the corporation.

    (c)    “Date of the defective corporate act” means:

        (1)    The date and the time a defective corporate act was purportedly taken; or

        (2)    If the exact time is unknown, the date and approximate time a defective corporate act was purportedly taken.

    (d)    “Defective corporate act” means:

        (1)    Any corporate act purportedly taken that, at the date of the defective corporate act, would have been within the power of the corporation but is void or voidable due to a failure of authorization; or

        (2)    An overissue.

    (e)    “Failure of authorization” means the failure of a corporation to authorize, approve, or otherwise effect a corporate act in compliance with the Maryland General Corporation Law, its charter or bylaws, any action taken by its board of directors, a committee of its board of directors, or its stockholders, or any plan or agreement to which the corporation is a party, if and to the extent that the failure would render the corporate act void or voidable.

    (f)    “Overissue” means the purported issuance by a corporation of stock of:

        (1)    A class or series in excess of the number of shares of the class or series that the corporation has the power to issue under § 2–201(a) of this title or the corporation’s charter at the time of issuance; or

        (2)    Any class or series that is not authorized for issuance by the corporation’s charter.

    (g)    “Putative stock” means stock, including stock issued upon exercise of rights, options, warrants, or other securities convertible into or exercisable for stock:

        (1)    Purportedly created or issued as a result of a defective corporate act, that but for the failure of authorization would constitute valid stock; and

        (2)    That cannot be determined by the board of directors to be valid stock.

    (h)    “Valid stock” means stock that has been duly authorized and validly issued in accordance with the provisions of this title.

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