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§ 2-214. Fractional share; scrip

West's Annotated Code of MarylandCorporations and AssociationsEffective: October 1, 2023

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
Effective: October 1, 2023
MD Code, Corporations and Associations, § 2-214
§ 2-214. Fractional share; scrip
Fractional shares and scrip authorized
(a) A corporation may, but is not obliged to:
(1) Issue fractional shares of stock;
(2) Eliminate a fractional interest by rounding up to a full share of stock;
(3) Arrange for the disposition of a fractional interest by the person entitled to it;
(4) Pay cash for the fair value of a fractional share of stock determined as of the time when the person entitled to receive it is determined; or
(5) Issue scrip or other evidence of ownership which:
(i) Entitles its holder to exchange scrip or other evidence of ownership aggregating a full share for a certificate which represents the share; and
(ii) Unless otherwise provided, does not entitle its holder to exercise voting rights, receive dividends, or participate in the assets of the corporation in the event of liquidation.
Conditions
(b) The board of directors may impose any reasonable condition on the issuance of the scrip or other evidence of ownership, including a condition that:
(1) It becomes void if not exchanged for a certificate representing a full share of stock before a specified date;
(2) The corporation may sell the stock for which the scrip or other evidence of ownership is exchangeable and distribute the proceeds to the holders; or
(3) The proceeds of a sale under paragraph (2) of this subsection are forfeited to the corporation if not claimed within a specified period not less than three years from the date the scrip or other evidence of ownership was originally issued.
Certificate representing scrip in bearer form
(c) A corporation may not issue a certificate representing scrip in bearer form.
Scrip without certificate
(d) For scrip issued without a certificate, on request by a scripholder, the corporation shall deliver to the scripholder, without charge, a statement in writing or by electronic transmission of the information required to be on a certificate under § 2-211 of this subtitle.

Credits

Added by Acts 1975, c. 311, § 2, eff. July 1, 1975. Amended by Acts 1985, c. 10, § 3; Acts 2009, c. 295, § 1, eff. Oct. 1, 2009; Acts 2009, c. 296, § 1, eff. Oct. 1, 2009; Acts 2023, c. 560, § 1, eff. Oct. 1, 2023.
Formerly Art. 23, § 28.
MD Code, Corporations and Associations, § 2-214, MD CORP & ASSNS § 2-214
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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