United States · Maryland

How to issue shares in Maryland corporations

Maryland is a distinctive state of incorporation for real estate investment trusts (REITs) due to favorable REIT-specific corporate law. The Maryland General Corporation Law (Md. Code, Corps. & Ass'ns) is the controlling statute, with Maryland-specific provisions on REIT structures making Maryland the dominant REIT-formation jurisdiction.

Governing statute
Maryland General Corporation Law, Md. Code, Corps. & Ass'ns
Md. Code § 2-203Issuance of stock
Md. Code § 2-204Consideration for stock
Md. Code § 2-211Stock certificates
Md. Code § 2-512Corporate records
Md. Code § 2-513Inspection of records
Md. Code § 11-101Maryland Securities Act
At a glance
  • Authorized by the board under Md. Code § 2-203
  • Future services and promissory notes permitted as consideration (§ 2-204)
  • Uncertificated shares permitted under § 2-212
  • Inspection rights under § 2-513
  • Maryland's REIT framework draws many REIT incorporations

Board authorization under § 2-203

Stock issuance is authorized by the board under Maryland General Corporation Law § 2-203. The board determines consideration under § 2-204. Maryland's regime is generally MBCA-pattern on issuance matters.

Consideration: standard pattern

Maryland permits broad consideration: cash, property, services rendered, contracts for services to be performed, promissory notes. The board's value determination is conclusive absent fraud.

Uncertificated shares

Md. Code § 2-212 permits uncertificated shares by board resolution.

Corporate records and inspection

§ 2-512 requires the standard MBCA-pattern records. § 2-513 grants inspection rights on written demand.

Maryland's REIT-friendly corporate law

Maryland is the dominant state of incorporation for US REITs (real estate investment trusts) due to a body of Maryland law that is favorable to REIT structures, including: clear provisions on REIT-specific shareholder rights, established case law on REIT governance disputes, and a well-developed practitioner ecosystem. Most major publicly-traded REITs are Maryland-incorporated regardless of their operational location. The Maryland Securities Act (§ 11-101 et seq.) governs state-level offerings.

Common mistakes

Common Maryland-specific failure points in share issuance:

  • Choosing Maryland for a non-REIT corporation without an operational reason (Delaware is typically more appropriate)
  • Missing Maryland Securities Act notice filings
  • Not maintaining § 2-512 corporate records
  • For REITs: failing to address REIT-specific Maryland governance provisions in the charter
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FAQ

Common questions in Maryland

Maryland law is the most developed in the US on REIT-specific governance matters: shareholder voting on REIT-specific actions, board composition rules for REITs, and REIT-specific case law on fiduciary duties. The practitioner ecosystem (Maryland REIT counsel) is correspondingly deep. For non-REIT corporations, Maryland is less commonly chosen than Delaware.

Maryland has a Business and Technology Case Management Program in the Circuit Court for major counties (Baltimore City, Baltimore County, Montgomery County, Prince George's County). The program handles complex commercial disputes including REIT-specific matters. Maryland-incorporated REITs typically litigate REIT-specific issues in Maryland courts.

Maryland's corporate law for non-REIT corporations is competent but unremarkable. Most non-REIT institutional-investor-backed corporations choose Delaware. Maryland-incorporated non-REITs benefit from the same MBCA-pattern operational provisions but don't access REIT-specific advantages.
Records that comply with MGCL
Issue shares the right way in Maryland.

Octelligence handles MGCL-specific share issuance: register, certificates, resolutions, and beneficial-ownership records aligned with statute.

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