§ 2-703

Maryland § 2-703

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

Text

(a) (1) Except as provided in paragraph (2) of this subsection, ratification of a defective corporate act becomes effective on the date that the board of directors adopts a resolution under § 2–702(a) of this subtitle or, if required by this subtitle, the date that stockholders adopt a resolution under § 2–702(b) of this subtitle.

(2) If the defective corporate act would have required a filing with the Department, ratification of the defective corporate act becomes effective on the later of:

(i) The time that articles of validation filed in accordance with § 2–705 of this subtitle are accepted for record by the Department; or

(ii) The time established in the articles of validation, not to exceed 30 days after the articles are accepted for record.

(b) Beginning at the time ratification is effective and without regard to the 120–day period during which a claim may be brought under § 2–706(b) of this subtitle:

(1) A defective corporate act ratified in accordance with this subtitle is not void or voidable as a result of the failure of authorization identified in a board action under § 2–702(a) of this subtitle and shall be deemed a valid corporate act effective as of the date of the defective corporate act;

(2) Putative stock purportedly issued pursuant to a defective corporate act identified in a board action under § 2–702(a) of this subtitle is not void or voidable and shall be deemed valid stock as of the time it was purportedly issued; and

(3) Any corporate act taken after a defective corporate act ratified in accordance with this subtitle in reliance on the defective corporate act having been validly effected, and any subsequent defective corporate act resulting from the original defective corporate act, shall be valid as of the time the act was taken.