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§ 2-702. Ratification of defective corporate acts

West's Annotated Code of MarylandCorporations and AssociationsEffective: October 1, 2022

West's Annotated Code of Maryland
Corporations and Associations
Title 2. Corporations in General--Formation, Organization, and Operation (Refs & Annos)
Subtitle 7. Ratification of Defective Corporate Acts (Refs & Annos)
Effective: October 1, 2022
MD Code, Corporations and Associations, § 2-702
§ 2-702. Ratification of defective corporate acts
In general
(a) The board of directors of a corporation may ratify a defective corporate act by adopting a resolution stating:
(1)(i) The defective corporate act to be ratified; and
(ii) If the defective corporate act involved the issuance of putative stock, the number of shares and the class or series of putative stock issued;
(2) The date of the defective corporate act;
(3) The nature of the failure of authorization of the defective corporate act; and
(4)(i) If the board of directors could have authorized or approved the defective corporate act without stockholder approval at the date of the defective corporate act and stockholder action is not required as of the date of ratification, that the board of directors ratifies the defective corporate act; or
(ii) If stockholder approval is required at the time of ratification or if the board of directors could not have authorized or approved the defective corporate act without stockholder approval at the date of the defective corporate act or stockholder action is required as of the date of ratification, that the board of directors directs that the ratification be submitted for consideration at a meeting of the stockholders.
Ratification submitted at stockholders meeting
(b) If a ratification is submitted for consideration at a meeting of the stockholders under subsection (a)(4)(ii) of this section, the stockholders may ratify the defective corporate act by adopting a resolution stating:
(1)(i) The defective corporate act to be ratified; and
(ii) If the defective corporate act involved the issuance of putative stock, the number of shares and the class or series of putative stock issued;
(2) The date of the defective corporate act; and
(3) That the stockholders ratify the defective corporate act.
Quorum and voting requirements applicable to ratification
(c)(1) The quorum and voting requirements applicable to ratification under this section shall be the approval standard requiring the greater portion of votes under:
(i) The requirements that would be applicable to the defective corporate act proposed to be ratified at the time of ratification; or
(ii) The requirements that would have been applicable to the defective corporate act on the date of the defective corporate act.
(2)(i) Unless otherwise required by the charter or bylaws of a corporation then in effect or in effect at the time of a defective corporate act, if the defective corporate act is the election of a director, ratification of the defective corporate act shall require a majority of the votes cast at a meeting at which a quorum is present.
(ii) The presence or approval of holders of stock of any class or series of which no stock is then outstanding or of any person that is no longer a stockholder may not be required.
(3) Holders of putative stock on the record date for determining which stockholders are entitled to vote on a ratification submitted to stockholders under this section shall not be entitled to vote or be counted for quorum purposes in any vote to consider ratification.
Ratified defective corporate act binding on corporation
(d) Ratification of a defective corporate act under this section shall make the ratified defective corporate act binding on the corporation in accordance with § 2-703 of this subtitle.

Credits

Added by Acts 2022, c. 289, § 1, eff. Oct. 1, 2022; Acts 2022, c. 290, § 1, eff. Oct. 1, 2022.
MD Code, Corporations and Associations, § 2-702, MD CORP & ASSNS § 2-702
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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