Lawmakers in Maryland and the District of Columbia approved changes to the jurisdictions’ business entity statutes during their 2020 sessions.
In Maryland, made a number of updates to the Maryland General Corporation Law and the Maryland REIT Law that took effect on of October 1, 2020. Key provisions of the corporation law legislation included:
- A later effective time for articles of incorporation.
- Increased flexibility in when determining whether a director should be indemnified by the corporation.
- A limit on the statutory inspection rights of stockholders.
- Clarification that articles of merger may include not only amendments to the charter but also a complete amendment and restatement of the charter.
Key provisions of the state’s Registered Open-End Investment Companies law legislation included:
- Facilitating the operations and transactions of registered open-end investment companies by limiting the voting rights of stockholders of open-end funds to the election of directors and those matters requiring a vote of security holders.
- A requirement that a charter amendment by a Maryland corporation registered as an open-end fund be approved by a majority of the entire board of directors.
- Clarification that, unless a corporation’s charter or bylaws provide otherwise, transfers between or among classes or series of stock of an open-end fund do not require stockholder approval.
- A new provision stating that a statutory merger, consolidation or share exchange by an open-end fund must be approved by a majority of the entire board of directors.
- A provision that a majority of the entire board of directors must approve the dissolution of an open-end fund.
Key provisions of the state’s REIT law legislation included:
- New language that defines “shareholder” as a shareholder of record, thus excluding beneficial holders of shares of beneficial interest of a real estate investment trust formed under the MRL.
- A new provision that expressly permits a real estate investment trust to reverse-split its shares without shareholder action.
In addition, the Corporations and Associations Article of the Annotated Code of Maryland was amended to modernize certain provisions relating to the governance of nonstock corporations. These amendments provide that the charter or bylaws of a nonstock corporation may regulate the management of the business and affairs of the nonstock corporation and regulate the exercise or allocation of voting power between or among the directors and members. Another amendment allows for voting via electronic transmission.
In the District of Columbia, the “Fiscal Year 2020 Budget Support Clarification Amendment Act of 2019” became effective in March of this year after mayoral review and review by the U.S. Congress. The new legislation amended entity filing requirements and biennial report for mayor requirements of the District of Columbia Business Corporation Act.
A comprehensive resource
These and other changes to Maryland and District of Columbia business law are captured in the 2020 Edition of Maryland & DC Laws Governing Business Entities Annotated. This resource contains up-to-date annotated business entity legislation for both Maryland and the District of Columbia, as well as other valuable features that make legal research faster and more efficient.
The 2020 Edition includes the latest amendments to the Maryland General Corporation Law and the District of Columbia Business Corporation Act. In addition, the latest case notes have been added from decisions of Maryland and D.C. courts, and from federal courts sitting in those jurisdictions.
Also included are in-depth analyses of the 2020 legislative and judicial developments for both jurisdictions prepared by noted Maryland attorney James J. Hanks, Jr., a partner at Venable LLP.
Other features include fee tables for business filings for both jurisdictions, and online access to over 100 forms for incorporation/formation, qualification, mergers, dissolution, and name reservation for all business entity types in Maryland and the District of Columbia via the Lexis Store download center. A listing of forms and contact information for the jurisdictions can be found in the book’s appendix.
Maryland & The District of Columbia Laws Governing Business Entities is available as a softbound book or as an ebook, compatible with dedicated e-reader devices, computers, tablets and smartphones that use e-reader software or applications. It is also available on the LexisNexis Digital Library.
To learn more about the 2020 Edition of Maryland & The District of Columbia Laws Governing Business Entities, call 1.800.533.1637 or visit us online at www.lexisnexis.com/csc.
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