§ 2-702

Maryland § 2-702

• Jurisdiction: Maryland
• Article gca: Corporations and Associations
• Title: 2

Text

(a) The board of directors of a corporation may ratify a defective corporate act under this subtitle 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;

(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 stockholder action is not required under subsection (b) of this section, that the board of directors ratifies the defective corporate act; or

(ii) If stockholder action is required under subsection (b) of this section, that the board of directors approves the ratification of the defective corporate act and directs that the ratification be submitted for consideration at a meeting of the stockholders.

(b) (1) Ratification of a defective corporate act approved in a resolution adopted under subsection (a) of this section shall be submitted for consideration at a meeting of the stockholders if stockholder approval is required or would have been required on the date of the defective corporate act by any provision of:

(i) The Maryland General Corporation Law;

(ii) The charter or bylaws of the corporation;

(iii) Any action taken by the board of directors, a committee of the board of directors, or the stockholders; or

(iv) Any plan or agreement to which the corporation is a party in effect at the time a resolution was adopted under subsection (a) of this section.

(2) To ratify a defective corporate act under this subsection, the stockholders shall adopt a resolution stating:

(i) The defective corporate act to be ratified;

(ii) If the defective corporate act involved the issuance of putative stock, the number of shares and the class or series of putative stock;

(iii) The date of the defective corporate act; and

(iv) That the stockholders ratify the defective corporate act.

(c) (1) The quorum and voting requirements applicable to action by the board of directors or the stockholders to ratify a defective corporate act under this section shall be the approval standard requiring the larger number or 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) Except as provided in subparagraph (ii) of this paragraph, approval by stockholders of the ratification of the election of a director shall require a majority of the votes cast at a meeting at which a quorum is present.

(ii) If the charter or bylaws of the corporation in effect at the time of the ratification of the defective corporate act or in effect at the time of the defective corporate act requires or required a larger number or portion of votes cast by stockholders, by holders of any class or series of stock, or by any specified stockholders to elect the director, then the affirmative vote of the larger number or portion of votes cast shall be required to ratify election of the director.

(3) The presence or approval of holders of stock of any class or series of which no stock is outstanding at the time of ratification or of any person that is no longer a stockholder may not be required.

(4) 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.

(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.