Skip to main content
Find a Lawyer

U.S. Federal and State Cases, Codes, and Articles

Select a tab to search United States Cases, Codes, or Articles

Search for cases

Indicates required field

Search by keyword or citation

Indicates required field

Search blogs, article pages, and cases and codes

Indicates required field

Maryland Code, Corporations and Associations § 3-701

Current as of December 31, 2021 | Updated by FindLaw Staff

(a) In this subtitle the following words have the meanings indicated.

(b) “Acquiring person” means a person who makes or proposes to make a control share acquisition.

(c) “Associate”, when used to indicate a relationship with any person, means:

(1) An “associate” as defined in § 3-601(c) of this title;  or

(2) A person that:

(i) Directly or indirectly controls, or is controlled by, or is under common control with, the person specified;  or

(ii) Is acting or intends to act jointly or in concert with the person specified.

(d)(1) “Control share acquisition” means the acquisition, directly or indirectly, by any person, of ownership of, or the power to direct the exercise of voting power with respect to, issued and outstanding control shares.

(2) “Control share acquisition” does not include the acquisition of shares:

(i) Before November 4, 1988;

(ii) Under a contract made before November 4, 1988;

(iii) Under the laws of descent and distribution;

(iv) Under the satisfaction of a pledge or other security interest created in good faith and not for the purpose of circumventing this subtitle;

(v) Under a merger, consolidation, or share exchange effected under Subtitle 1 of this title if the corporation is a party to the merger, consolidation, or share exchange;  or

(vi) Within one-tenth or more but less than one-fifth of all voting power of outstanding shares of stock of the corporation before June 1, 2000.

(3) Unless the acquisition entitles any person, directly or indirectly, to exercise or direct the exercise of voting power in the election of directors in excess of the range of voting power previously authorized or attained under an acquisition that is exempt under paragraph (2) of this subsection, “control share acquisition” does not include the acquisition of shares of a corporation in good faith and not for the purpose of circumventing this subtitle by or from:

(i) Any person whose voting rights have previously been authorized by stockholders in compliance with this subtitle;  or

(ii) Any person whose previous acquisition of shares of stock of the corporation would have constituted a control share acquisition but for paragraph (2) of this subsection.

(e)(1) “Control shares” means shares of stock that, except for this subtitle, would, if aggregated with all other shares of stock of the corporation (including shares the acquisition of which is excluded from “control share acquisition” in subsection (d)(2) of this section) owned by a person or in respect of which that person is entitled to exercise or direct the exercise of voting power, except solely by virtue of a revocable proxy, entitle that person, directly or indirectly, to exercise or direct the exercise of the voting power of shares of stock of the corporation in the election of directors within any of the following ranges of voting power:

(i) One-tenth or more, but less than one-third of all voting power;

(ii) One-third or more, but less than a majority of all voting power;  or

(iii) A majority or more of all voting power.

(2) “Control shares” includes shares of stock of a corporation only to the extent that the acquiring person, following the acquisition of the shares, is entitled, directly or indirectly, to exercise or direct the exercise of voting power within any level of voting power set forth in this section for which approval has not been obtained previously under § 3-702 of this subtitle.

(f) “Corporation” includes a real estate investment trust, as defined in Title 8 of this article.

(g) “Interested shares” means shares of a corporation in respect of which any of the following persons is entitled to exercise or direct the exercise of the voting power of shares of stock of the corporation in the election of directors:

(1) An acquiring person;

(2) An officer of the corporation;  or

(3) An employee of the corporation who is also a director of the corporation.

(h) “Person” includes an associate of the person.

Back to chapter list
Previous part of code Next part of code
Back to chapter list

Cite this article: FindLaw.com - Maryland Code, Corporations and Associations § 3-701 - last updated December 31, 2021 | https://codes.findlaw.com/md/corporations-and-associations/md-code-corp-and-assns-sect-3-701.html

Read this complete Maryland Code, Corporations and Associations § 3-701 on Westlaw

FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.

Was this helpful?

Response sent, thank you

Welcome to FindLaw's Cases & Codes

A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw's Learn About the Law.

Go to Learn About the Law

Latest Blog Posts

For Legal Professionals

Learn About the Law

Get help with your legal needs

FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.

Go to Learn About the Law

Need to find an attorney?

Search our directory by legal issue

Enter information in one or both fields (Required)

    More Options
    Copied to clipboard