October 1, 2022
Corporate Compliance
Defective Corporate Acts Ratification
Effective October 1st, House Bill 996 and Senate Bill 879 establishes a process by which a defective corporate act may be ratified by a board of directors of a corporation and applying this act to real estate investment trusts.
"House Bill 996
By: Delegate Brooks Introduced and read first time: February 10, 2022
Assigned to: Economic Matters Committee Report:
Favorable with amendments House action: Adopted Read second time: March 3, 2022
AN ACT concerning 2 Corporations and Associations – Ratification of Defective Corporate Acts
FOR the purpose of establishing a process by which a defective corporate act may be ratified by a board of directors of a corporation or its stockholders; requiring a corporation ratifying a defective corporate act that would have required a filing with the State Department of Assessments and Taxation to file articles of validation with the Department; authorizing an adversely affected person or entity to file an action contesting a ratification under this Act; applying this Act to real estate investment trusts; and generally relating to the ratification of defective corporate acts.
BY repealing and reenacting, with amendments, Article – Corporations and Associations Section 1–101(f), 1–203(b)(1), 1–301, and 8–601.1 Annotated Code of Maryland (2014 Replacement Volume and 2021 Supplement) BY repealing and reenacting, without amendments, Article – Corporations and Associations Section 1–101(g) Annotated Code of Maryland (2014 Replacement Volume and 2021 Supplement) BY adding to 21 Article – Corporations and Associations."
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"House Bill 996
By: Delegate Brooks Introduced and read first time: February 10, 2022
Assigned to: Economic Matters Committee Report:
Favorable with amendments House action: Adopted Read second time: March 3, 2022
AN ACT concerning 2 Corporations and Associations – Ratification of Defective Corporate Acts
FOR the purpose of establishing a process by which a defective corporate act may be ratified by a board of directors of a corporation or its stockholders; requiring a corporation ratifying a defective corporate act that would have required a filing with the State Department of Assessments and Taxation to file articles of validation with the Department; authorizing an adversely affected person or entity to file an action contesting a ratification under this Act; applying this Act to real estate investment trusts; and generally relating to the ratification of defective corporate acts.
BY repealing and reenacting, with amendments, Article – Corporations and Associations Section 1–101(f), 1–203(b)(1), 1–301, and 8–601.1 Annotated Code of Maryland (2014 Replacement Volume and 2021 Supplement) BY repealing and reenacting, without amendments, Article – Corporations and Associations Section 1–101(g) Annotated Code of Maryland (2014 Replacement Volume and 2021 Supplement) BY adding to 21 Article – Corporations and Associations."
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