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2017 Maryland Code
Corporations and Associations
Title 2 - Corporations in General -- Formation, Organization, and Operation
Subtitle 3 - Capital Accounts, Dividends, and Retirement of Shares
§ 2-310.1. Redemption of own stock -- Open-end investment companies
Universal Citation: MD Corp & Assn Code § 2-310.1 (2017)
- (a) Applicability. -- This section applies only to a corporation registered as an open-end company under the Investment Company Act of 1940.
- (b) In general. -- Subject to the provisions of ยง 2-311 of this subtitle, a corporation may redeem shares of its stock from any stockholder if:
- (1) The corporation's charter expressly provides for the redemption of shares of its stock from any stockholder and the board of directors authorizes the redemption; or
- (2)
- (i) The corporation's charter does not expressly prohibit the redemption of shares of its stock;
- (ii) The aggregate net asset value of the shares to be redeemed from the stockholder is, as of the date of the redemption, $ 2,000 or less; and
- (iii) Written notice of the redemption to the stockholder of record:
- 1. Is mailed first-class to the stockholder's last known address of record;
- 2. States that all of the shares will be redeemed; and
- 3. Establishes a date for the redemption which is at least 45 days from the date of the notice.
- (c) Price. -- The price to be paid for shares redeemed under subsection (b)(2) of this section shall be the aggregate net asset value of the shares at the close of business on the date of the redemption.
- (d) Shares not surrendered for cancellation on date of redemption. -- If certificates representing the shares to be redeemed under subsection (b)(2) of this section have been issued and are not surrendered for cancellation on the date of redemption:
- (1) The corporation may withhold payment for the redeemed shares until the certificates are surrendered for cancellation; and
- (2) Except for the right to receive payment of the redemption price, the stockholder shall cease to have any rights as a stockholder of the corporation on the date of redemption.
- (e) Where value increases above limit for redemption after notice of redemption. -- If the aggregate net asset value of the shares to be redeemed under subsection (b)(2) of this section should increase to an amount greater than $ 2,000 between the date of the notice of redemption and the date of the redemption, then the notice of redemption shall have no further force or effect.
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