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§ 2-303. Computation of stated capital and capital surplus

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 3. Capital Accounts, Dividends, and Retirement of Shares (Refs & Annos)
MD Code, Corporations and Associations, § 2-303
§ 2-303. Computation of stated capital and capital surplus
Capital and capital surplus
(a)(1) The entire consideration received by a corporation for issuing stock with par value constitutes stated capital to the extent of the aggregate par value of the stock.
(2) Any consideration received in excess of the aggregate par value constitutes capital surplus.
Stated capital; stock without par value
(b)(1) Except as permitted by paragraph (2) of this subsection, the entire consideration received by a corporation for issuing stock without par value constitutes stated capital.
(2) Before issuing stock without par value, the board of directors may allocate any portion of the consideration to capital surplus. However, if the stock has a preference in the assets of the corporation in the event of involuntary liquidation, the board may allocate to capital surplus only a portion which does not exceed the amount by which the consideration exceeds the aggregate amount of the preference.
Good faith allocation
(c) Subsections (a)(2) and (b) of this section do not affect a good faith allocation of amounts to retained earnings, earned surplus, or a similar account if:
(1) Stock is issued in a consolidation, merger, or acquisition of all or substantially all of the stock or assets of another corporation; and
(2) Immediately after the transaction, the aggregate retained earnings, earned surplus, or similar account of the corporation which issued the stock does not exceed the aggregate of the corresponding accounts of the corporations parties to the transaction as they existed immediately before the transaction.

Credits

Added by Acts 1975, c. 311, § 2, eff. July 1, 1975.
Formerly Art. 23, § 24.
MD Code, Corporations and Associations, § 2-303, MD CORP & ASSNS § 2-303
Current with all legislation from the 2023 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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