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§ 2-206. Types of consideration

West's Annotated Code of MarylandCorporations and Associations

West's Annotated Code of Maryland
Corporations and Associations
Title 2. Corporations in General--Formation, Organization, and Operation (Refs & Annos)
Subtitle 2. Issuance of Securities
MD Code, Corporations and Associations, § 2-206
§ 2-206. Types of consideration
Consideration
(a) The consideration for the issuance of stock, convertible securities, warrants, or options may consist in whole or in part of:
(1) Money;
(2) Tangible or intangible property;
(3) Labor or services actually performed for the corporation;
(4) A promissory note or other obligation for future payment in money; or
(5) Contracts for labor or services to be performed.
Escrow
(b) The corporation may place in escrow shares issued for a contract for future labor or services or a promissory note or other obligation for future payment in money, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the labor or services are performed or the note or other obligation for future payment in money is paid. If the labor or services are not performed or the note or other obligation for future payment in money is not paid, the shares escrowed or restricted and the distributions credited may be canceled in whole or in part.
Receipt of consideration
(c) When the corporation receives the consideration for which stock or convertible securities are to be issued, the stock or convertible securities are fully paid and nonassessable.
Real estate investment trusts
(d) Notwithstanding any other provision of the Maryland General Corporation Law,1 a corporation may issue shares of its stock without consideration for the purpose of qualifying the corporation as a real estate investment trust under the Internal Revenue Code.

Credits

Added by Acts 1975, c. 311, § 2, eff. July 1, 1975. Amended by Acts 1976, c. 567, § 2; Acts 1993, c. 624; Acts 2000, c. 642, § 1, eff. June 1, 2000; Acts 2005, c. 586, § 1, eff. June 1, 2005.
Formerly Art. 23, §§ 19, 22.

Footnotes

Corporations and Associations § 1-101 et seq.
MD Code, Corporations and Associations, § 2-206, MD CORP & ASSNS § 2-206
Current through legislation effective through May 9, 2024, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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