Maryland clarifies forum selection clauses for internal corporate claims

Maryland lawmakers approved an amendment that permits entities to bring an internal corporate claim in specified circuit courts of Maryland or a federal court sitting in Maryland, or in courts sitting in one or more jurisdictions outside the state. The purpose of this amendment, effective October 1, 2021, is to clarify that an entity’s charter or bylaw provision may determine the specific venue in Maryland in which an internal corporate claim must be brought, and not just generally limit internal corporate claims to Maryland state courts or federal courts sitting in Maryland.

Other updates to the Maryland General Corporation Law and the Maryland REIT Law that took effect on of October 1, 2021 include the following:

• The application of the reverse-split provisions of Section 2-309(e) to open-end investment companies registered under the Investment Company Act of 1940 (the “1940 Act”) was deleted.
• The requirement of board judgment in the removal of an officer or agent was eliminated.
• A provision was added requiring all participants to be able to read or hear meeting proceedings in real time in remote stockholders’ meetings.
• Boards may not issue stock before the effective time of authorization.
• The Maryland Control Share Acquisition Act was amended to clarify that that a “control share acquisition” doesn’t include an “acquisition of shares” that occurs when the corporation isn’t subject to the MCSAA, or that occurs per a contract entered into when the corporation isn’t subject to the MCSAA.

The state’s Real Estate Investment Trusts (REIT) law included the following updates:

• The section regarding the issuance of shares before the effective time of authorization was amended to align the treatment of such shares with that of Maryland corporations.
• REIT boards of trustees are authorized to hold remote shareholders’ meetings.

A comprehensive resource

These and other changes to Maryland and District of Columbia business law are captured in the 2021 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 2021 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 2021 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.