On April 30, 2019, Governor Hogan signed Senate Bill 136, which amends the Maryland General Corporation Law to permit certain corporate records (including a company’s stock ledger) to be maintained on electronic networks or databases, including through the use of distributed ledgers and blockchain technology. This legislation welcomes and facilitates the use of groundbreaking and innovative blockchain technology and provides Maryland companies with the statutory framework to migrate to a blockchain platform. These important amendments to the Maryland General Corporation Law will be effective October 1, 2019.
The amendments also permit a company to transmit communications (such as annual statements and stockholder notices) by means of a distributed electronic network or database, which includes by means of blockchain technology.
The amendments further permit a company to have its records “maintained by or on [the company’s] behalf” (rather than requiring the company itself to maintain its records, as was previously required by the statute), recognizing that a stock ledger does not need to be administered directly by an individual (i.e., a corporate officer or a transfer agent), thus enabling the use of blockchain technology for the creation and administration of corporate records.
Other amendments were enacted to clarify that written consents and requests required or permitted by the Maryland General Corporation Law may be given by “electronic transmission,” which includes through the use of blockchain technology.
Morrison & Foerster partner Tracy A. Bacigalupo is a member of the Maryland State Bar Association (MSBA) Committee on Corporation Law and, together with the Morrison & Foerster Blockchain & Smart Contracts Group, co-chaired by Dario de Martino and Susan Gault-Brown, is pleased to have played a significant role in the drafting and implementation of these historic statutory amendments.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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